Part of

Average Credit Card Interest Rate in March 2020

APRs fell in response to Federal Reserve emergency rate cuts during pandemic

Stack of multicolored credit cards close-up view with selective focus.
••• alexialex / Getty Images

This post is for historical reference.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 dropped down to 20.71%, according to data collected by The Balance in March 2020.

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.

The Balance watched issuers steadily lower credit card annual percentage rates (APRs) in response to two emergency rate cuts the Federal Reserve made in March 2020. The rate cuts were made to help companies borrow emergency funds more affordably during the coronavirus pandemic, but the changes affected credit card interest rates, too.  

Key Takeaways

  • The average APR on credit card purchases was 20.71%, down 0.50 percentage points compared to 31 days prior.
  • Store credit cards still 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).

What Happened: Rate Cuts Rolled In, COVID-19 Hit Economy

It didn’t take long for COVID-19 to start making waves in the U.S., including the credit card industry. 

On March 3, as economic uncertainty began setting in, the Federal Reserve made its largest federal funds rate cut since 2008. The fed funds rate—which drives the prime rate most credit card APRs are based on—was lowered by half a percentage point to a 1%-1.25% range. Credit card issuers didn’t respond to this action immediately, but by March 9, several big banks—including Citi, Wells Fargo, and U.S. Bank— had lowered APRs accordingly. 

Then, nearly two weeks later on March 15, the Fed announced another rate cut, driving its benchmark interest rate down a full percentage point to a 0%-0.25% range. Overall, the federal funds rate moved down 1.5 percentage points in March, and many card issuers responded accordingly.

Between March 3 and March 31, 13 credit card issuers lowered interest rates: American Express, Banco Popular, Barclays, Celtic Bank, Citi, Elan Financial, Luxury Card, PNC, Simmons Bank, State Farm Bank, USAA, U.S. Bank, and Wells Fargo. 

To learn more about the Federal Reserve actions and the impact on credit cards, read “Credit Card APRs Start to Sink as Banks Respond to Emergency Fed Actions.”

Average Interest Rates by Credit Card Transaction Type

Purchase APR Deals

The Balance found purchase APR offers were common in March 2020: More than one-quarter of the cards tracked for this report offered new cardholders promotional purchase APRs. 

  • On average, these offers lasted about 12 months.
  • The longest introductory purchase rate offer was 20 months, which was offered by two cards in our database at the time: U.S. Bank Visa Platinum Card and U.S. Bank Business Platinum Card. 
  • Cards with promotional purchase APRs charged an average ongoing rate of 18.65%.

Balance Transfer APR Deals

Promotional balance transfer rates were still a bit more common than purchase APR deals, as nearly one-third of all our tracked cards boasted balance transfer rate offers.

  • The average length of those balance transfer rate promotions was about 14 months.
  • The longest offer, from the SunTrust Prime Rewards Credit Card, gave new cardholders 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 18.65%.

Cash Advance Rates

About 88% of the cards we tracked in March 2020 allow cash advances.

  • The average APR on cash advances was 25.69%.
  • The highest cash advance APR we found 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 charged penalty rates, 105 of the cards surveyed for this report (about 34%) did. The average penalty APR in our card sample was a steep 28.81%—8.10 percentage points higher than the average purchase APR in March 2020. The Balance found penalty rates could be as high as 31.49%, too, which was charged by four cards issued by HSBC as of March 31, 2020: HSBC Cash Rewards Mastercard, HSBC Advance Mastercard, HSBC Premier World Mastercard, and the HSBC Premier World Elite Mastercard.


This monthly report is based on credit card offer data collected and monitored on a rolling basis by The Balance for 308 U.S. credit cards during March 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.