Average Credit Card Interest Rate for April 2024: 24.37% APR

The median average credit card interest rate for April 2024 is 24.37%. Investopedia tracks over 300 credit card interest rates every month, and the rate for March was unchanged for the third straight month after moving up 25 basis points in October and November 2023.

Credit card interest rates tracked by Investopedia are based on median advertised rates across several hundred of the most popular card offers. Investopedia’s average rates differ from the rates tracked by the Federal Reserve (the Fed), most recently projected to be 21.47% for the fourth quarter of 2023 because the Fed tracks average stated interest rates across all accounts at each reporting bank.

How Are Credit Card Interest Rates Determined?

Credit card interest rates have been unchanged in the first few months of 2024. A wide variety of consumer loans, including credit cards, are tied to movements of the Fed funds rate, which is the mechanism the Fed employs to stimulate or slow the magnitude of lending, depending on economic conditions. The Fed has held the fed funds rate steady after raising rates in 2022 and 2023 to combat high inflation that began in 2021. The Fed held rates steady in the last five months of 2023 as inflation began to decrease and that trend has continued during the first two months of 2024.

The Fed announced it would keep rates steady at its most recent meeting on Jan. 31, 2024, and that it remains open to keeping rates unchanged or potentially reducing them at its next meeting in March and in future meetings this year depending on economic conditions. Currently, 98% of interest rate traders are betting that the Fed will hold rates steady at its next meeting on May 1.

Most credit card issuers employ variable interest rates that are indexed to the Federal Reserve’s prime rate, so Fed rate policy largely impacts card interest rates directly. However, the lower and upper ends of available card rates can change from month to month depending on competitive pressures and individual banks' risk policies.

Several factors influence how individual credit card rates are set, the most important of which is credit quality, with those with excellent credit receiving the lowest rates and those with no credit or bad credit receiving the highest rates. Other factors include the type of credit card and the risk-based pricing policies of the specific credit card issuer.

Investopedia tracks average advertised rates for new applicants, which are typically quoted as a range for each card product, across more than 300 card offers, which are shown below broken out by credit quality, card type, and card issuer.

Credit Card Interest Rates vs. Personal Loan Interest Rates

Interest rates for credit cards tend to run in a similar range to those interest rates for personal loans. Credit cards are a type of revolving credit with variable interest rates whereas personal loan rates are typically fixed for a specific amount and repayment term. Many consumers use balance transfer credit card offers to consolidate higher-interest credit card debt. Additionally, the best personal loans can also be used for debt consolidation involving credit card debt and other types of consumer debt.

Debt consolidation was the most popular reason for using a personal loan, according to a survey conducted by Investopedia in September 2023.

Interest Rates by Credit Quality Types

Different ranges of credit quality can vary depending on the type of score used, but the most popular credit score used by credit card lenders is the FICO score.

Credit quality is defined according to the FICO score ranges for each credit quality level:

Interest Rates by Credit Card Types

• Balance transfer: Credit cards that offer a promotional rate, often 0%, for a year or more.
• Business: Credit cards designed for small business owners, providing segregation of business expenses, working capital, and often rewards and discounts on business-related purchase categories.
• Low cost: Credit cards for those with bad credit or no credit history that often have no annual fee but charge higher interest rates to offset higher credit risk.
• Rewards: Credit cards that offer points, miles, or cash back on purchases.
  
• Secured: Credit cards that require a security deposit that serves as an initial credit line.
• Student: Credit cards for those with limited credit history and credit education, often for college students.
  

Interest Rates by Issuer

Credit card issuers have different risk-based pricing policies that cause variation in the ranges of interest rates they advertise and eventually assign to customers based on approved applicants' credit scores.

Prime Rate Trend

Credit card interest rates are predominantly indexed to the prime rate along with a margin which varies at the card product level and individual account holder's credit quality. The prime rate was 8.50% in March 2024, having risen 525 basis points since the beginning of 2022 following several rate increases by the Federal Reserve, which ended with an increase of 0.25% in July of 2023. The next Fed rate-setting meeting will conclude on May 1, 2024, and is expected to result in the fed funds rate remaining unchanged.

Delinquency Rate Trend

Credit card delinquency rates, defined as accounts that are 90 days or more overdue, have been below 3% in recent years. However, during the pandemic the delinquency rate fell to a low of 1.48%, bottoming out in April of 2021. Since that time the delinquency rate has more than doubled due to increased revolving debt incurred by consumers in the past two years, reaching 3.01% at the end of 2023, marking its highest level since the start of 2012.

Credit Card Debt Trend

Total consumer revolving credit card debt passed the $1 trillion mark just before the pandemic and then fell sharply to a low of $970 billion in January 2021. Since then, revolving debt has climbed back beyond pre-pandemic levels to over $1.32 trillion for the most recent month reported by the Federal Reserve, January 2024.

How We Find the Average Credit Card Interest Rate

Investopedia tracks individual credit card rates on more than 300 network-branded cards offered to the public from 43 of the nation’s largest banks and issuers. Most credit card rates are advertised in the form of a range from low to high depending on the applicant’s credit score. In determining average rates by credit quality, card type, or card issuer, Investopedia calculates the average midpoint of advertised interest rate ranges and also calculates the average of the lower and upper ends of rates that are expressed in ranges.