Average Credit Card Interest Rate in June 2020

APR cuts subsided, card offer changes continued during pandemic

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This post is for historical reference.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 20.09% in June 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.

That’s a tad lower than May 2020's average rate of 20.14%, but the decrease was driven by new card additions in our database, unlike prior month changes that were largely in response to emergency Federal Reserve actions. 

In early spring The Balance watched annual percentage rate (APR) cuts roll in as credit card issuers caught up with emergency rate changes issued by the Fed in March. There were a few more rate cuts in May, but none in June. Average APRs were largely unchanged, but issuers still made card offer changes by squashing balance transfer APR promotions and by raising a few ongoing interest rates during the pandemic. 

Key Takeaways

  • The average APR on credit card purchases was 20.09% in June 2020, down 1.19 percentage points since January 2020 
  • 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 categorizes 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).

Average Credit Card Interest Rates Based on Card Type
  Current Average APR Last Month 6 Months Ago
All Credit Cards 20.09% 20.14% 21.28%
Business Credit Cards 17.99% 17.99% 19.14%
Student Credit Cards 18.78% 18.78% 20.61%
Cash-Back Credit Cards 19.12% 19.08% 20.25%
Secured Credit Cards 19.96% 20.28% 20.97%
Travel Rewards Credit Cards 20.07% 20.06% 21.23%
Other 20.61% 20.58% 21.61%
Store Credit Cards 24.15% 24.20% 25.25%

What Happened: Issuers Slashed Balance Transfer Deals 

There were no rate cuts, but a few new cards (such as the U.S. Bank Altitude Go Visa Signature Card and the Verizon Visa Card) entered the market in June 2020 and were added to the average rate calculations. 

Here's what else changed that month:

More 0% Balance Transfer APR Offer Changes

In March 2020, 95 cards in our database advertised promotional balance transfer rate offers for new cardholders, and in June 2020 there were 78.

A handful of American Express cash-back cards that once consistently offered competitive 0% balance transfer APRs ditched the deals entirely in June: Amex EveryDay Credit Card, Amex EveryDay Preferred Credit Card, Blue Cash Everyday Card from American Express, Blue Cash Preferred Card from American Express, and the Cash Magnet Card.

Another notable balance transfer offer change in June came from Citi. The Citi Diamond Preferred and Citi Simplicity cards advertised 21-months-long 0% balance transfer APR offers for months, which made them the best cards for consumers wanting to make debt transfers from other high-interest cards. In June, the balance transfer APR offers on both cards were dialed back to 18 months long, which were still considered generous, but not stand-out.

Small Purchase APR Increases 

The Balance observed several small credit card interest rate increases in June 2020: 

  • HSBC Cash Rewards Mastercard: Variable APR range increased by 1% (was 12.99%-22.99%, is now 13.99-23.99%)
  • HSBC Gold Mastercard: Variable APR range increased by 1% (was 12.99%-22.99%, is now 13.99-23.99%)
  • Citi Simplicity: Variable APR range increased by 1% (was 13.74%-23.74%, is now 14.74%-24.74%)
  • Citi Diamond Preferred Credit Card: Variable APR range increased by 1% (was 13.74%-23.74%, is now 14.74%-24.74%)
  • Blue Cash Everyday Card from American Express: Low end of variable APR range increased by 1% (was 12.99%-23.99%, is now 13.99%-23.99%)
  • Blue Cash Preferred Card from American Express: Low end of variable APR range increased by 1% (was 12.99%-23.99%, is now 13.99%-23.99%)
  • American Express Cash Magnet Card: Low end of variable APR range increased by 1% (was 12.99%-23.99%, is now 13.99%-23.99%)

Average Interest Rates by Credit Card Transaction Type

Credit card APRs can vary based on what type of transaction you make, and some issuers give new cardholders a break by offering low or 0% interest rates for a limited time.  

Purchase APR Deals

Roughly one-quarter (25%) of the cards we tracked for this report offered new cardholders introductory purchase APRs, just like May 2020 and only slightly down from April 2020 (26%). 

  • On average, these offers lasted about 12 months, which was the case since October 2019.
  • The longest introductory purchase rate offer was 20 months, as advertised by two cards: U.S. Bank Visa Platinum Card and U.S. Bank Business Platinum Card. 
  • Cards with promotional purchase APRs charged an average ongoing rate of 18.26%.

Balance Transfer APR Deals

As mentioned earlier, fewer promotional balance transfer rates were available in June 2020, based on offer changes observed by The Balance. 

  • The average length of these balance transfer rate promotions was about 14 months, which was consistent with prior month averages.
  • The longest offer overall was touted by the SunTrust Prime Rewards Credit Card, which gave you 36 months to pay off transferred debt at a reduced interest rate of 3.25%. 
  • The best 0% balance transfer APR deal was 20 months long, as offered by the U.S. Bank Business Platinum Card. 
  • The longest 0% balance transfer APR deal offered by a consumer card was now 18 months, as advertised by the HSBC Gold Mastercard, Discover it Balance Transfer, Citi Simplicity, Citi Diamond Preferred, and the Citi Double Cash Card in June 2020.
  • We found the average ongoing APR of balance transfer transactions was 18.26%.

Cash Advance Rates

About 88% of the cards we track allow cash advances.

  • The average APR on cash advances was 25.35%, nearly unchanged from prior months.
  • The highest cash advance APR was 36%. That steep cash advance APR was charged by both the Fortiva Credit Card and First PREMIER Bank Gold Mastercard.

Penalty Interest Rates

While not all credit cards charge penalty rates, many do, including 103 of the cards surveyed for this report (about 33%). The average penalty APR in our card sample was a steep 28.85%. That was 8.76 percentage points higher than the average purchase APR in June 2020.

The Balance found that despite rate cuts made earlier in the year, penalty rates could be as high as 30.90%. That steep rate was charged by five Capital One business cards: Capital One Spark Cash for Business, Capital One Spark Classic for Business, Capital One Spark Miles for Business, Capital One Spark Cash Select for Business, and Capital One Spark Miles Select for Business. The highest consumer card penalty rate was 30.74%, as charged by the BMW Credit Card in June 2020. 

Methodology

This monthly report was based on credit card offer data collected and monitored on a rolling basis by The Balance for 313 U.S. credit cards in June 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.