The average credit card interest rate is 16.12%
The national average credit card APR rose again this week, according to the CreditCards.com Weekly Credit Card Rate Report.
The average APR for brand-new cards ticked up to 16.12% after the retailer L.L. Bean increased the minimum APR on its co-branded card, the L.L. Bean Mastercard, by a full percentage point. The lowest rate that outdoor recreation enthusiasts can get on L.L. Beanâs retail rewards card is now 14.99%.
L.L. Bean also increased the cardâs maximum APR by four percentage points, causing the range of possible APRs that L.L. Bean fans can expect to substantially expand. For example, qualifying applicants with the lowest credit scores may be assigned an APR as high as 23.99%, which is nine points higher than the cardâs minimum rate. Previously, the difference between the L.L. Bean cardâs lowest possible rate and its highest rate was just six percentage points.
L.L. Beanâs rate hike also caused the average maximum card APR to rise this week. According to CreditCards.comâs latest rate calculation, for example, the average U.S. credit card now advertises a maximum APR of 23.62%, up from an average of 23.58% last week.
Every week, CreditCards.com tracks APR advertisements for a representative sample of 100 U.S. credit cards.
To calculate the national average credit card APR, we only consider a cardâs lowest possible interest rate. However, most U.S. credit cards advertise a wide range of possible rates, including maximum interest rates that are often 5 to 10 points higher than a cardâs minimum rate.
Credit card lenders donât typically advertise how many of their applicants qualify for a cardâs lowest rate. But generally, lenders typically reserve their lowest rates for just a small fraction of applicants. Meanwhile, others are assigned APRs that are far higher than the advertised minimum.
For example, credit card applicants may be assigned a cardâs lowest advertised rate or its highest. Or they may be assigned an APR that falls somewhere in the middle of a cardâs lowest and highest interest rates. As a result, even cardholders with good to excellent credit may be assigned an APR that is several points higher than the national average.
According to CreditCards.comâs data, for example, the average median card APR â which is the middle rate that many new cardholders are assigned â is currently 19.87%. Thatâs nearly four points higher than the average minimum credit card APR.
Despite rate hikes, average card APRs are still near a three-year low
Average rates on new card offers are higher now than they have been in months. However, compared to a year ago, average card APRs are still unusually low â particularly compared to the past three years.
The average minimum credit card APR, for example, is currently down by 1.19 percentage points compared to a year ago when the average new card offer advertised a 17.31% interest rate. In February 2018, the average new card APR advertised a 16.41% interest rate.
The last time average minimum card APRs hovered closer to 16% was in 2017.
This yearâs lower interest rates are largely due to rate cuts by the Federal Reserve. When the Federal Reserve revises its benchmark interest rate, the federal funds rate, most credit card issuers eventually match the Fedâs rate change by revising new card APRs by the same amount.
In March 2020, the Fed slashed its benchmark interest rate, the federal funds rate, to near zero effectively erasing several years of gradual rate increases that the Fed had implemented between 2015 and 2016. As a result, the national average card APR tumbled dramatically last spring as the majority of lenders tracked by CreditCards.com matched the Fedâs rate cuts.
Since then, average card APRs have remained near a three-year low, staying within rounding distance of 16% for 10 straight months.
See related:Â How do credit card APRs work?
CreditCards.com’s Weekly Rate Report
||6 months ago
|Methodology: The national average credit card APR is comprised of 100 of the most popular credit cards in the country, including cards from dozens of leading U.S. issuers and representing every card category listed above. (Introductory, or teaser, rates are not included in the calculation.)
|Updated: February 3, 2021
Historic interest rates by card type
Some credit cards charge even higher rates, on average. The type of rate you get will depend in part on the category of credit card you own. For example, even the best travel credit cards often charge higher rates than basic, low interest credit cards.
CreditCards.com has been calculating average rates for a wide variety of credit card categories, including student cards, balance transfer cards, cash back cards and more, since 2007.
How to get a low credit card interest rate
Your odds of getting approved for a cardâs lowest rate will increase the more you improve your credit score. Some factors that influence your credit card APR will be out of your control, such as the length of time youâve been handling credit.
However, even if youâre new to credit or are rebuilding your score, there are steps you can take to ensure a lower APR. For example:
- Pay your bills on time. The single most important factor influencing your credit score â and your ability to win a lower rate â is your track record of making on-time payments. Lenders are more likely to trust you with a competitive APR â and other positive terms, such as a big credit limit â if you have a lengthy history of paying your bills on time.
- Keep your balances low.Â Lenders also want to see that you are responsible with your credit and donât overcharge. As a result, credit scores take into account the amount of credit youâre using, compared to how much credit youâve been given. This is known as your credit utilization ratio. Typically, the lower your ratio, the better. For example, personal finance experts often recommend that you keep your balances well below 30% of your total credit limit.
- Build a lengthy and diverse credit history. Lenders also like to see that youâve been successfully using credit for a long time and have experience with different types of credit, including revolving credit and installment loans. As a result, credit scores, such as the FICO score and VantageScore, factor in the average length of your credit history and the types of loans youâve handled (which is known as your credit mix). To keep your credit history as long as possible, continue to use your oldest credit card so your lender doesnât close it.
- Call your lender. If youâve successfully owned a credit card for a long time, you may be able to convince your lender to lower your interest rate â especially if you have excellent credit. Reach out to your lender and ask if theyâd be willing to negotiate a lower APR.
- Monitor your credit report. Check your credit reports regularly to make sure youâre being accurately scored. The last thing you want is for a mistake or unauthorized account to drag down your credit score. You have the right to check your credit reports from each major credit bureau (Equifax, Experian and TransUnion) once per year for free through AnnualCreditReport.com.
Ten months into the COVID-19 pandemic, many consumers have settled into new routines and developed new spending patterns. One of the spending categories that hasnât lost its popularity is groceries, as many people are cooking more at home and eating out less frequently.
See related: Grocery shopping and COVID-19: Whatâs changed and how to save money
Credit card issuers are adapting to these new patterns as well.
On Oct. 20, 2020, Chase announced it would be temporarily adding grocery rewards to the Chase Sapphire Preferred® Card* and Chase Sapphire Reserve®. This comes on top of other limited time offers the issuer has recently added, such as limited time redemption options through Pay Yourself Back and gas and grocery store purchases counting toward the Reserve cardâs $300 travel credit.
See related: Guide to Chase Pay Yourself Back
âThroughout this very unique year, weâve provided our cardmembers flexibility and options to get the most out of their cards â¦ Â as well as limited time opportunities to earn more points on certain spending,â Chase said in a statement. âWe want to continue to give our cardmembers ways to maximize value where they are spending today.â
On top of that, on Jan. 28, 2021, Chase added an offer for new Chase Sapphire Preferred cardholders: a one-time automatic $50 statement credit on grocery store purchases.
How the limited time grocery rewards work
Starting Nov. 1, 2020 and running through April 30, 2021, Sapphire Reserve cardmembers will earn 3 points per dollar on grocery store purchases, and Preferred cardmembers will earn 2 points per dollar, up to $1,000 in purchases per month. According to Chase, this will be automatic for existing and new cardmembers.
See related: Best credit cards for grocery shopping
This provides cardholders with an excellent opportunity to earn some of the most valuable travel points while travel is still limited.
The new offer also makes Sapphire cards more competitive when compared with the recently updated Chase Freedom card suite. In August, the issuer replaced the Chase Freedom with the Chase Freedom Flex and added three new valuable rewards categories to both the Freedom Flex and Chase Freedom Unlimited, namely bonus cash back on travel purchased through Chase Ultimate Rewards and on dining and drugstore purchases.
Considering neither Freedom card charges an annual fee and both earn Chase Ultimate Rewards points, some cardholders may be wondering if the Chase Sapphire Reserve is worth keeping during a time when most of its premium travel perks might go unused.
Fortunately, all the limited time offers coupled with temporary grocery rewards make it much easier to get value of these popular travel cards â even when youâre not traveling.
How the grocery statement credit works
Another incentive to apply for the Chase Sapphire Preferred card now is the new one-time $50 statement credit on grocery purchases.
New cardmembers will get access to the statement credit automatically and be able to use it for 12 months from the time of account opening. Eligible purchases include purchases made at merchants coded as grocery stores. Warehouse club purchases wonât qualify.
Chase hasnât announced the offerâs expiration date yet.
Chase Sapphire cards value at a glance
Chase Sapphire Reserve®
Chase Sapphire Preferred® Card
|Newly added limited-time benefits
||Cardmembers earn more on grocery store purchases: Nov. 1, 2020 â April 30, 2021
- 3 points per $1 spent
- Up to $1,000 in grocery store spend per month
Gas and grocery purchases count toward Sapphire Reserve $300 travel credit:Â
- Gas and groceries have been added as qualifying purchases, through June 30, 2021
|New cardmembers receive an automatic statement credit:
- One-time $50 statement credit on eligible grocery store purchases available for 12 months from the account opening
Cardmembers earn more on grocery store purchases: Nov. 1, 2020 â April 30, 2021
- 2 points per $1 spent
- Up to $1,000 in grocery store spend per month
- 3 points per dollar on dining purchases with restaurants â including delivery and pick-up
- 3 points per dollar on travel â including tolls and parking
- Complimentary DashPass Subscription from DoorDash, valued at over $100 per year
- Up to $120 in statement credits on DoorDash purchases â $60 in statement credits through 2020 and another $60 in statement credits through 2021
- 10 points per dollar on Lyft rides
- Complimentary Lyft Pink membership, worth a minimum of $199 in value when you activate by March 21, 2022
- Pay Yourself Back:Â Points are worth 50% more now through April 20, 2021 when redeemed for purchases in current categories of grocery, dining, home improvement and contributions to select charities
- Chase Dining:Â Points are worth 50% more when redeemed through the new Chase Dining hub in Ultimate Rewards, now through April 30, 2021
- 2 points per dollar on dining purchases with restaurants â including delivery and pick-up
- 2 points per dollar on travel â including tolls and parking
- Complimentary DashPass Subscription from DoorDash, valued at over $100 per year
- 5 points on per dollar on Lyft rides
- Pay Yourself Back: Points are worth 25% more now through April 20, 2021 when redeemed for purchases in current categories of grocery, dining, home improvement and contributions to select charities
- Chase Dining: Points are worth 25% more when redeemed through the new Chase Dining hub in Ultimate Rewards, now through April 30, 2021
While travel isnât the most lucrative rewards category at the moment, your Chase Sapphire card can still bring you plenty of value, especially given the temporary rewards categories and other limited time offers.
*All information about the Chase Sapphire Preferred Card has been collected independently by CreditCards.com and has not been reviewed by the issuer. This offer is no longer available on our site.
In response to the coronavirus pandemic, major credit card issuers are offering relief to their customers.
Even though many places around the country are open, the pandemic continues to impact the U.S. economy. Workers are still at risk of being laid off or facing reduced hours or pay.
“This is a rapidly evolving situation and we want our customers to know we are here to provide assistance should they need it,â Anand Selva, chief executive officer of Citiâs consumer bank, said in a statement in Spring 2020.
At the same time, scammers are now trying to take advantage of coronavirus concerns by sending out fake emails about the virus that are designed to steal consumersâ personal and financial information or to infect their computers with malware.
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What to do if youâre struggling to pay your credit card bills
Many credit card issuers are allowing customers to opt into financial relief programs online. These programs are a convenient way to access short-term relief. But it could come with a long-term cost as many cardholders will continue to see interest accrue. With the average credit card interest rate sitting at 16.05%, cardholders might find more cost-effective relief through other options.
Here’s what issuers are currently offering:
Cardholders who are having difficulties can get assistance through American Express’s financial hardship program. Eligible cardholders have the option to enroll in a short-term payment plan, which provides relief for 12 months, or a long-term plan, which can provide relief for either 36 or 60 months.
Under both options, you will receive lower interest rates, plus waived late payment fees and annual fees. But you might not have access to certain card benefits and features.
If you enroll in the short-term plan, you might be able to continue putting new purchases on the card but with a reduced spending limit. If you are participating in the long-term plan, you will not be able to use the card.
Amex will report participating cardholders to the credit bureaus as current, assuming they comply with the program’s rules. But the program’s terms do offer some important caveats: Amex will inform the credit bureaus that you are enrolled in a payment assistance program (if you’re in the long-term plan). And under both plans, Amex will report that you have a lower credit limit.
While these factors do not have as much of an impact on your credit score as a delinquent account does, it could still signal to other lenders that you might be having some financial hardship.
Bank of America
Bank of America cardholders who have trouble paying credit card bills can request a credit card payment deferral by calling the number on the back of their card.
To qualify for payment assistance, cardholders must be carrying a balance, according to the website.
Bank of America sent an email to Preferred Rewards members in May 2020 stating that the company had temporarily suspended the annual program review process. Members whose assets dropped below the regular threshold to keep their status would continue to qualify for program benefits. It is unclear if Bank of America is still suspending this program.
Barclays urges credit card account holders to request payment relief online. As of May 4, 2020, the bank is granting payment relief for two statements, but interest will continue to accrue.
âWe understand that this is a time of uncertainty for many people, and we know that there may be instances where customers find themselves facing financial difficulties. Capital One is here to help and we encourage customers who may be impacted to reach out to discuss how we might be of assistance,â the bank said in a statement.
In a March 26, 2020 update, Chairman and CEO Rich Fairbank confirmed that they are offering waived fees and deferred payments on credit cards for some cardholders.
Because each customerâs situation is different, the bank encourages customers to contact it directly. To contact Capital One customer service about an existing account, call (800) 227-4825.
See related: How to clean your credit card
Previously, Chase Bank stated that customers will be able to “delay up to three payments on your personal or business credit card” if needed, with interest continuing to accrue. The website currently does not specify how many payments cardholders can defer.
It also stated that active duty military members who are responding to a disaster might have access to additional benefits. Servicemembers can call the bank for more information.
In a letter to shareholders, the company’s CEO, Jamie Dimon, also promised to not report late payments to the credit bureaus for “up-to-date clients.”
See related: Chase offering limited-time bonus on food delivery for some cardholders
Citi customers who have been impacted by the coronavirus pandemic might be eligible for assistance. Previously, the bank was waiving payments and late fees for two consecutive billing cycles. However, Citi has ended its pandemic assistance program.
“Due to a significant and steady decline in enrollments, our formal COVID-19 assistance program has concluded and we will focus on providing assistance options to those customers financially affected by COVID-19 on a case-by-case basis. We continue to closely monitor the situation and will evaluate additional actions to support our customers and communities as needs arise,” a spokesperson for Citi said in an email.
During the bank’s pandemic assistance program, interest continued to accrue, but accounts that were current at the time of enrollment were not be reported as delinquent.
Discover will be extending relief to qualified customers who are experiencing financial difficulty caused by the spread of COVID-19.
“We encourage them to contact us by calling and are directing them to www.discover.com/coronavirus for phone numbers for each product line and other FAQs,” Discover said in a statement earlier this year. “We also can provide relief through our mobile text app, which connects a customer directly with an agent.”
Discover it Miles cardmembers can also put their miles towards their bill â including their minimum payment.
See related: What to do if you can’t pay your business credit card bill
Apple Card customers can enroll in an assistance program. Previously, cardholders could waive payments without accruing any interest. The website currently doesn’t specify if this is still the case.
Cardholders can defer payments for three billing cycles. Though interest will continue to accrue, enrolled cardholders will not receive late fees, and their accounts will be reported as current, as long as accounts were not delinquent at the time of enrollment.
Synchrony is extending relief to customers experiencing financial hardship. The company’s website previously stated that this could include payment relief for up to three statement cycles, while interest would continue to accrue. The website currently offers no specifics about what the issuer is prepared to offer.
Truist (formerly SunTrust and BB&T)
Previously, Truist offered payment relief assistance to customers with personal and business credit cards, among other products. As of April 14, it was willing to delay payments for up to 90 days. The website currently offers no specifics about what the issuer is prepared to offer.
Previously, impacted cardholders could defer monthly payments for two consecutive billing cycles. The company’s website currently does not specify what assistance cardholders can expect to receive.
See related: Coronavirus stimulus legislation doesnât suspend negative credit reporting
ultimate guide to coronavirus limited-time promotions for more offers designed to help cardholders maximize rewards amid the coronavirus pandemic.