Average Credit Card Interest Rate in February 2020

Stack of multicolored credit cards close-up view with selective focus.
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This post is for historical reference. Specific product rates may have changed since publication. Please see banks' sites for current rates. For current rates and analysis, see Average Credit Card Interest Rates.

The average credit card interest rate was 21.21% in February 2020, according to data collected by The Balance.

In July 2020 we updated our data collection and analysis to better reflect how and where consumers use their credit cards. These changes affected how we calculate average credit card rates and may not be reflected in the average rates published prior to August, 2020.

For six months, The Balance watched credit card annual percentage rates (APRs) fall in response to interest rate cuts made by the Federal Reserve, and then inch back up as some issuers raised the cost of borrowing. In February, the credit card APR environment was very quiet. The average interest rate was impacted mostly by The Balance database updates rather than credit card issuer actions. 

Key Takeaways

  • The average APR on credit card purchases was 21.21%.
  • Store credit cards had the highest average interest rate.
  • Business credit cards had the lowest average interest rate.
  • 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 determines a credit card interest rate. To learn how The Balance categorized cards based on type for this report, check out the methodology at the bottom of this page. Other deciding factors include your credit standing and the type of transaction you use the card for (more on that later in the “Average Interest Rates by Credit Card Transaction Type” section).

Seasonal Rate Focus: Travel Rewards Card APRs

A travel rewards credit card (which earns extra points or miles on travel purchases and/or offers high-value travel redemption options) can help you save money on a family trip or international getaway if it comes with a hefty new cardholder bonus or elevated reward earning rates. Some travel cards offer perks that may even improve the quality of your trips, such as airport lounge access or free checked bags. 

However, travel credit card issuers often tack on high interest rates to counter the cost of extending generous rewards and travel perks to cardholders. The average travel card APR in February 2020 was 21.14%, based on our calculations. Even if you qualified for the lowest APR one of these credit cards offered, that was still 17.50% on average.

The best travel rewards credit cards often come with high annual fees, too—up to $550 per year, depending on the card. Be mindful of that added cost, along with higher-than-average interest rates, when applying for and using a travel rewards card.

Average Interest Rates by Credit Card Transaction Type

Purchase APR Deals

The Balance found purchase APR deals were still popular in February 2020: More than one-quarter of the cards we track for this report offered new cardholders introductory purchase APRs. 

  • On average, the offers lasted about 12 months.
  • The longest introductory purchase rate offer was 18 months, offered by three cards in our database: Wells Fargo Platinum Card, U.S. Bank Visa Platinum Card, and the HSBC Gold Mastercard. 
  • Cards with promotional purchase APRs charged an average ongoing rate of 19.17%.

Balance Transfer APR Deals

Promotional balance transfer rates were more common than purchase APR deals in February 2020. More than a quarter of all our tracked cards offered introductory balance transfer rates.

  • The average length of balance transfer rate promotions was about 14 months.
  • The longest offer, touted by the SunTrust Prime Rewards Credit Card, gave new applicants 36 months to pay off transferred debt at a reduced interest rate of 4.75%. The best 0% balance transfer APR offer was 21 months long, offered by the Citi Simplicity card and Citi Diamond Preferred Credit Card.
  • When promotional rate offers ended, the average APR of balance transfer transactions was 19.17%.

Cash Advance Rates

Nearly 88% of the cards allowed cash advances in February 2020.

  • The average APR on cash advances was 26.25%.
  • The highest cash advance APR we found was 36%, charged by both the Fortiva Credit Card and First PREMIER Bank Gold Mastercard.

Penalty Interest Rates

While not all credit cards charge penalty rates, 105 of the cards surveyed for this report (about 34%) did. The average penalty APR in our card sample was a steep 29.04%—7.83 percentage points higher than the average purchase APR in February 2020. The Balance found penalty rates as high as 31.49%, too.

What Changed: Pace of APR Changes Slowed Dramatically

February was a very quiet month for credit card interest rates. Outside of average APR adjustments resulting from new cards being added to our database, The Balance observed only a two small credit card APR changes in February 2020: The Capital One VentureOne Rewards card APR increase mentioned earlier in the travel rewards credit card section and a 1 percentage point APR increase on the Bank of America Business Advantage Travel Rewards card. That’s a stark change from prior months.

In 2019, credit card issuers lowered APRs in response to three consecutive federal funds rate cuts from the Federal Reserve. Then in December, The Balance watched several major card issuers, including Capital One, Chase, Citi, and U.S. Bank start raising interest rates again amid concerns about high card balances and growing delinquency rates among cardholders with poor credit. 

Methodology

This monthly report was based on credit card offer data collected and monitored on a rolling basis by The Balance for 307 U.S. credit cards in February 2020. Our data pool included offers from 42 issuers, including the largest national banks. We tracked average interest rates on both a weekly and monthly basis for each card category, plus the overall average rate for all cards. 

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 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 small business owners can apply for and use to make purchases for their companies. 
  • Cash-back credit cards: Cards that offer you a little rebate on most purchases you make with the card.
  • 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 at least 18 years old.
  • 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 aimed at helping people with poor credit or no credit history to build credit.
  • Store credit cards: Cards you can use at particular retail stores, and sometimes other places as well. They often offer discounts or rewards for purchases made at the associated store (or chain of 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.