Ever wonder how much you’re paying on that credit card in interest each month? Or maybe you’re looking for one of the lowest interest rate credit cards online. Either way, we have some data here to help answer that question.
We checked online (so you don’t have to) and this is what we’ve gathered from some reputable sources.
- According to Forbes weekly list (this as of 3/17/23) they have the average credit card interest rate at 24.10%
- Wallethub has the average credit card rate for new cards at 21.92% with excellent credit in the 17% range and fair credit up to 24%.
- Lending Tree is showing an average of 23.65% and state that this is the highest they’ve seen interest rates since they tracked rates in 2019.
- According to federal reserve data, average interest rates on credit cards was 20.40 for Q3 2022 data.
As you can see, the numbers above vary, so we will take the average of these 4 numbers for you and give you an average of the averages. The average we get from the above sources is 22.52%.
As the fed raises and lowers rates, your credit card interest rate goes up and down.
The Federal Reserve’s decision to raise or lower interest rates can have an impact on credit card interest rates. Here’s how:
- When the Fed raises interest rates: When the Federal Reserve raises interest rates, it can cause banks to increase the interest rates they charge on credit cards. This is because banks borrow money from the Federal Reserve at higher rates, and they may need to pass that increased cost onto consumers in the form of higher interest rates on loans and credit cards.
- When the Fed lowers interest rates: When the Federal Reserve lowers interest rates, it can cause banks to reduce the interest rates they charge on credit cards. This is because banks can borrow money from the Federal Reserve at lower rates, and they may be able to pass those savings onto consumers in the form of lower interest rates on loans and credit cards.
Just to be clear, the Federal Reserve’s interest rates and credit card interest rates is not always direct or immediate. Other factors, such as the competitive landscape in the credit card market and the creditworthiness of individual borrowers, can also influence credit card interest rates. Additionally, some credit cards have fixed interest rates that do not change in response to changes in the Federal Reserve’s interest rates.
Your interest rate may vary on your new or existing credit card based on several factors
The actual interest rate you receive on a credit card will depend on several factors, including your credit score, credit history, and the specific terms and conditions of the credit card you choose. Some credit cards may offer lower interest rates, while others may have higher rates, depending on their rewards programs and other features. Make sure you understand the interest rate and any associated fees or charges that may apply, when considering applying for a new card.
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