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Average Credit Card Interest Rate Was 20.28% in April 2021

Stack of multicolored credit cards close-up view with selective focus.
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The average credit card interest rate was 20.28% in April 2021, according to data collected by The Balance. 

A few online-offer changes and the addition of one new card to our database nudged the average down by just a fraction of a percentage point to the same place it was in January 2021. The average credit card interest rate has changed little this year, despite occasional online-offer adjustments and the introduction of new cards by banks. 

Key Takeaways

  • The average APR on credit card purchases was 20.28%, up slightly from a 2020 low of 20.18% but still below its pre-pandemic peak.
  • Store credit cards had the highest average interest rate.
  • Business credit cards had the lowest average interest rate overall.
  • Student credit cards had the lowest average interest rate among consumer cards.

Average Credit Card Interest Rates (APR) on Purchases by Card Category

Card type is just one factor that influences a credit card’s interest rate. To learn how The Balance categorizes card types, see the methodology at the bottom of this report. Other determining factors include your credit standing and the type of transaction your card is used for (more on that later in the “Average Interest Rates by Credit Card Transaction Type” section).

Average Credit Card Interest Rates Based on Card Type
  April 2021 Average APR March 2021 October 2020 April 2020
All Credit Cards 20.28% 20.29% 20.23% 20.19%
Business Credit Cards 17.96% 17.92% 17.78% 17.93%
Student Credit Cards 18.83% 18.83% 18.83% 18.87%
Cash-Back Credit Cards 19.18% 19.12% 19.09% 19.18%
Travel Rewards Credit Cards 19.29% 19.28% 19.20% 20.11%
Secured Credit Cards 20.29% 20.29% 20.14% 20.23%
Other 22.18% 22.31% 22.39% 20.66%
Store Credit Cards 24.26% 24.24% 24.18% 24.38%

A credit card issuer often has a range of APRs it might charge on a certain card, such as 15.99% to 25.99%. The better your credit score, the more likely you are to get approved for an interest rate on the lower end of the range.

What Happened in April 2021

The Balance observed a little bit of interest rate activity in April, just as we did in March. We added the pricing details for the new United Quest Card from Chase (more on that below), and recorded a few other purchase and cash advance APR adjustments across the rest of our online-offer database.

For example, U.S. Bank relaunched its State Farm credit card lineup. The new offers featured slightly higher variable APR ranges than before (14.99%-24.99% compared to 14.24%-24.24%, for example) and advertised different no-interest periods for new cardholders. The Bank of America Travel Rewards Credit Card variable APR range also widened by two full percentage points, from 14.99%-22.99% to 13.99%-23.99%, based on applicant creditworthiness.

None of the rate changes recorded in April were based on industry-wide rate changes, which has been the norm for several months. It’s been more than one year since the Federal Reserve made two emergency rate changes in response to economic uncertainty at the start of the coronavirus pandemic, which sent credit card interest rates tumbling for several months before leveling out. 

New Airline Rewards Card Added to Data Pool

A few new credit cards entered the market in April 2021, one of which was added to The Balance’s database to track interest rates and other pricing details: the United Quest Card from Chase. 

The variable interest rate range of this new airline rewards credit card (16.49%-23.49%) was slightly higher than the range offered by similar cards, which was enough to nudge up the travel rewards card category average. This card also charged interest on cash advance transactions and may apply a penalty rate to seriously past-due accounts, so we factored that data into this report.

Cardholders Were Charging To Credit Cards Again

Consumers really took advantage of the lower interest rates and reined in credit card debt last year, but that trend ended shortly after the new year began. The national revolving debt balance, which is largely composed of credit card debt, increased by about $8.1 billion in February to $974.4 billion, according to the Fed’s latest G.19 consumer credit report. The nation's revolving debt balance is essentially back to where it was in December 2020, but still $123.1 billion less than the all-time high of $1.098 trillion reached in February 2020.

Average Interest Rates by Credit Card Transaction Type

You can use credit cards for three main types of transactions: purchases, balance transfers, and cash advances. APRs often vary depending on the type of transaction, and some issuers give new cardholders a break by offering low or 0% interest rates on some of those types of transactions for a limited time.  

Purchase APR Deals

Applying for a new credit card to get a promotional purchase APR can be a good idea if you want to finance a large purchase without paying interest. Nearly one-quarter of the cards tracked for this report offer introductory purchase APRs to new cardholders, which is expected based on the past year of offer data.

  • Typical offer length: On average, these offers lasted 12 months, which was the norm. It was rare to find purchase APR deals longer than 15 months: Only five cards in our database offer longer 0% new-cardholder deals in April 2021.
  • Best 0% purchase APR deal: The U.S. Bank Visa Platinum Card offered 20 months of 0% on purchases. 
  • Credit score qualifications: Nearly 95% of such card offers in our database recommend that applicants have good or excellent credit. 
  • Rate after no-interest period ends: Cards with promotional purchase APRs charged an average ongoing rate of 18.38%, the highest average recorded since interest rates plummeted a year prior.

Balance Transfer APR Deals

Moving debt from a high-APR credit card to one with a lower or limited-time 0% APR on balance transfers can reduce interest costs and help you pay down debt faster. Fewer promotional balance transfer rates were available in April 2021 compared to before the pandemic, but about 26% of the cards tracked by The Balance offered deals to new cardholders. 

  • Typical offer length: The average length of balance transfer rate promotions was about 14 months, which was consistent with March averages.
  • Longest balance transfer deal: The SunTrust Prime Rewards Credit Card gave new cardholders 36 months to pay off transferred debt at a reduced interest rate of 3.25%. 
  • Best 0% balance transfer offer: The longest 0% balance transfer APR period was 20 months, once again offered by the U.S. Bank Visa Platinum Card.
  • Credit score qualifications: Nearly 92% of the cards in our database with such offers recommended applicants have a good or excellent credit score. 
  • Rate after intro period ends: The average ongoing APR of balance transfer transactions was 18.11%, up slightly from March.

Cash Advance Rates

Most cards allow you to tap your available credit by using the card to withdraw cash at an ATM. Nearly 90%% of the cards we tracked in April allowed cash advances. 

  • Average cash advance APR: 25.47%, up slightly compared to prior months, but still below the pre-pandemic average. 
  • Highest cash advance APR: A steep 36%, charged by both the Fortiva Credit Card and First PREMIER Bank Gold Mastercard.

Penalty Interest Rates

If you fall seriously behind on your monthly credit card payments, exceed your credit limit, or have a payment returned by your bank, your standard purchase APR may be raised to a penalty interest rate. The penalty rate (also called the “default rate”) is the highest interest rate card issuers charge. While not all credit cards charge penalty rates, 108 of the cards surveyed for this report (about 34%) did. 

  • Average penalty APR: Based on our card sample, the average default rate was 28.59% in April 2021. That’s 8.31 percentage points higher than the average purchase APR, but lower than it was a year prior.
  • Highest penalty APR: 29.99% was a popular penalty rate, charged by 54 cards in our database. The highest penalty rate once exceeded 30%, but some issuers dialed back the steepest rates starting in August 2020.

Average APR Based on Recommended Credit Score

Based on the card offer data collected by The Balance, credit cards marketed to consumers with bad and fair credit scores (below 670, according to FICO) had an average purchase APR of 23.87%, 4.55 percentage points above the average APR of cards marketed to people with good or excellent credit (19.32%).

A good credit score indicates to lenders that you can manage credit cards, loans, and debt repayment. Cards that accept applicants with lower credit scores generally charge higher interest rates to make up for the risk of default.

Methodology

This monthly report was based on credit card offer data collected and monitored on a rolling basis by The Balance for 320 U.S. credit cards in April 2021. Our data pool included offers from 43 issuers, including the largest national banks. We track average interest rates on both a weekly and monthly basis for each card category, plus the overall average rate for all cards.

In July 2020 we updated our data collection and analysis to better represent how and where consumers use their credit cards. These changes are reflected in the monthly change chart above, and the average card interest rate table above. Rates published prior to August 2020 in other articles may not reflect these changes.

How We Calculate APR Averages

We gather purchase and transaction APR information from current credit card terms and conditions. If a credit card APR is posted as a range, we first determine the average of that range, then use that number in our overall average rate calculations, so the statistics are true averages, not skewed toward the low or high end of a spectrum.

The overall average APR in this report is an average of the average APR in each category we track: travel, cash back, secured, business, student, and store cards.

How We Calculate Average Rates vs. How the Fed Does

We look at interest rates by card category and transaction type to give a clearer view of the interest rate you can expect to pay based on the kind of card you're using or how you plan to use it. By comparison, February 2021 data from the Federal Reserve put the average credit card APR at 14.75%. However, the Fed calculates its rate based on voluntary reporting from 50 credit-card-issuing banks, and it's unclear what goes into those averages or which types of cards make up those averages.

The Fed also reports an average rate on accounts charged interest (meaning those that carry balances month-to-month), though its calculation gives more weight to accounts with high balances. In February 2021, the average interest rate on credit cards accruing finance charges was 15.91%, down from a record high of 17.14% reported in the second quarter of 2019.

How We Categorize Cards

We assign a category to each credit card in our database, and a card can go in only one category. Here's how we define them:

  • Business credit cards: Cards that small business owners can apply for and use to make purchases for their companies. 
  • Cash-back credit cards: Cards that accrue a cash balance on most purchases you make, then allow you to apply that balance as a statement credit or deposit it into a bank account.
  • Travel rewards credit cards: Cards that allow you to earn extra points or miles on travel purchases, either with specific travel brands or on a variety of travel-related expenses. Cards that offer high-value travel redemption options are also part of this group.
  • Student credit cards: Cards for college or graduate students who are starting to build credit or want to earn some rewards.
  • Secured credit cards: Cards that require a security deposit that’s usually the same amount as the credit limit you’ll be given. These cards are designed to help people with poor credit or no credit history to build credit.
  • Store credit cards: Cards issued by particular retail stores that often offer discounts or rewards for purchases made at that store (or a chain of affiliated stores).
  • Other: Cards that do not fit any of the following categories: business, cash back, student, travel, secured, and store. This includes cards that offer very few—if any—features.