Current Averages:

• Average consumer credit card rate, overall market: 14.33%

• Average credit card rate, non-reward consumer cards: 12.77%

• Average reward credit card rate: 15.00%

• Average student credit card rate: 14.62%

• Average business credit card rate (non-reward): 10.68%

• Average business reward credit card rate: 12.28%

Average credit card rates are down slightly from their November levels, and may be headed down further based on the significant, three-quarter-point cut in interest rates by the Federal Reserve today. However, recent rate cuts have had only a slight effect on the rates credit card companies are choosing to offer, so there is no guarantee that this latest cut will have a substantial impact. As with many of the recent cuts, major credit card issuers could choose to simply re-price their offers in line with current rates versus passing along the rate cut to new customers. (About 70% of credit cards offer variable rates that move up or down in line with Federal interest rates. However, credit card issuers are always free to re-price their card offers to new applicants — or even to those who are already their customers.)

The average credit card rate for credit cards across all consumer sectors is 14.33%, down from 14.39% in late November. In pinpointing a single “average” rate, IndexCreditCards attempts to include all of the various rate tiers that card issuers offer based on an applicant’s credit history, as well as the different rates associated with non-reward versus reward cards. Consumers with better credit histories can often find offers well beneath this average, while those with bad credit histories will likely be offered rates higher than the average.

The average credit card rate for non-reward consumer credit cards fell slightly to 12.75%, from 12.82% in late November, while the average rate on credit cards with rewards decreased to a flat 15.00% rate, from 15.06%.

While the averages listed above attempt to take into account the multiple tiers that many credit card issuers offer, IndexCreditCards.com also tracks the very lowest listed rates, those reserved for customers with the very best credit. This week those averages are 11.10% (previously 11.16%) for the market as a whole, with a 9.29% average for non-reward cards (previously 9.32%) and a 11.87% average for consumer cards with rewards (previously 11.95%).

Student credit card rates fell slightly as well, with an average rate of 14.62%, down from 14.66%. The relatively low rates on student cards continue to be a surprise, as this average is below the average rate on general market reward cards, which rarely happens. It’s hard to know how many student applicants are really getting these rates, but the advertised rates at least suggest that it’s not a bad time for college students to seek credit.

Small business credit card rates bucked the trend somewhat, with the average rate for non-reward business credit cards remaining at 10.68%, and the average rate for business credit cards with rewards jumping to 12.28% from 12.01% in November. The average rate on business reward cards has increased almost one-half point in just the last month.

Financial institutions represented in the survey include Advanta, American Express, Bank of America, Capital One, Chase / Washington Mutual, Citi, Discover, National City, Pulaski Bank, U.S. Bank, Wells Fargo, and more.

Published 12/16/08 (Modified 01/30/24)