It's more important than ever to understand how credit cards work, especially the interest rates they charge. Millions of Americans use credit cards for everyday spending, emergencies, and even financing major purchases. But many may not realize just how much they’re paying in interest if they carry a balance.

The average credit card interest rate in America is a key indicator of consumer borrowing costs. This rate reflects broader economic trends and directly impacts how much people pay when they use credit but don’t pay their balances in full. With rates rising in recent years, consumers need to stay informed and proactive about managing their credit wisely.

Current Average Credit Card Interest Rate in America

As of 2025, the average credit card interest rate in the United States stands at approximately 24.1% APR. This figure is based on aggregated data from banks and credit unions, covering a wide variety of credit card products, including both consumer and business accounts.

This average represents a significant increase compared to previous years, and it reflects the broader tightening of monetary policy in response to inflationary pressures in the economy. In early 2020, for instance, the average APR hovered closer to 16%, meaning rates have risen by more than 8 percentage points over five years.

How the Average Interest Rate Is Calculated?

The average credit card interest rate is not based on a single figure from one bank or lender. Instead, it is calculated using data from thousands of credit cards issued by various financial institutions across the country. Research firms, government agencies like the Federal Reserve, and financial publications regularly analyze this data to determine the national average.

To find the average APR, these organizations consider:

• Standard variable APRs on newly issued cards
• Promotional rates and introductory offers (though these are often excluded from long-term averages)
• Weighted data based on the number of accounts and total balances carried

The reported number is a blended average, reflecting all types of cardholders, from those with excellent credit to those with fair or poor credit.

Trends in Credit Card Interest Rates Over Time

Credit card interest rates have not remained static. Over the past two decades, the average APR has fluctuated significantly in response to economic conditions and central bank policy.

In the early 2000s, the average APR ranged between 12% and 14%, gradually rising in response to economic growth and inflation. During the Great Recession in 2008–2009, interest rates were pushed down in an effort to stimulate the economy. The average APR dipped to around 12.7% in 2010.

However, rates began rising again in the mid-2010s, and the pandemic created new volatility. Initially, rates dropped as the Federal Reserve slashed interest rates to support the economy. But as inflation surged in 2022 and 2023, the Fed responded with aggressive rate hikes, which have pushed the average credit card APR to record highs by 2025.

Different Types of Credit Card APRs

It’s also important to understand that credit cards often apply different APRs depending on the type of transaction. A cardholder may face multiple interest rates on a single account, and knowing which rate applies in each situation can prevent confusion and unnecessary charges.

• Purchase APR: This is the most common interest rate and applies to regular purchases made using the card. If a cardholder doesn’t pay off their balance in full by the due date, interest is charged based on this rate, often on a daily basis.
• Balance Transfer APR: When an amount is moved from one card to another, this rate is used. For a limited time, some cards give 0% APRs as a bonus, but once the intro period ends, a much higher standard rate can apply to any remaining balance.
• Cash Advance APR: Using a credit card to withdraw cash usually comes with a higher APR and begins accruing interest immediately. There’s no grace period, and additional fees are often charged on top of the high interest rate.
• Penalty APR: This rate may be applied if a cardholder makes late payments or violates other terms. It is often the highest rate a card can charge, sometimes exceeding 30%, and can remain in effect for months or even indefinitely if the account isn’t brought back into good standing.
• Introductory APR: Some credit cards offer an introductory (or promotional) APR, which is a lower interest rate — often 0% — for a set period, typically on purchases, balance transfers, or both. After the promotional period ends, the standard purchase or balance transfer APR kicks in, so it’s important to plan to avoid unexpected interest charges.

Understanding these categories helps cardholders avoid surprises and manage their accounts more effectively. Being aware of the type of APR that applies to each transaction can save money and reduce the risk of falling deeper into debt.

How do Credit Scores Affect Interest Rates?

A person's credit score is a big part of what interest rate they will be given. Issuers use credit scores to gauge risk—lower scores typically mean higher risk and, therefore, higher interest rates.

Here’s a general idea of how credit scores affect APR:

• Individuals with excellent credit (750 and above) may qualify for rates around 17–19%.
• Those with good credit (700–749) can expect rates closer to 20–22%.
• People with fair to poor credit (below 700) may be offered APRs ranging from 24% to over 30%.

Improving a credit score through consistent payments, reducing debt, and maintaining low credit utilization can significantly reduce borrowing costs over time.

Conclusion

The average credit card interest rate in America is more than just a statistic—it’s a clear indicator of how much it costs to use credit today. At over 24% in 2025, the current average APR reflects a challenging environment for borrowers.

Whether someone is applying for a new card or managing existing debt, knowing where national rates stand helps put personal credit terms into perspective. In a rising-rate environment, awareness is the first step toward making more informed, financially sound decisions.