The Average Credit Card Now Comes With An APR Of Over 15 Percent

With credit card interest rates reaching new highs, you might want to try to pay off that card as fast as you can, so you don’t end up paying through the nose if those rates continue to climb. says two weeks ago, average APRs reached 15.22%, up about .25% from the previous high in September. Banks blamed the Credit CARD Act of 2009 for the higher APRs then. However, the law simply limits how and when credit card companies can raise APRs — not the higher rates they can charge right off the bat.

In the past six months, average APRs for cash back, rewards and airline cards have also risen, with cash back and rewards cards both hovering around 14.9% interest, on average, and airline cards at roughly 14.5%. Issuers are also charging an average of a quarter of a percentage point more for balance transfer cards, with a current average of 13%.

For consumers who aren’t the most organized or dedicated to handling their credit card debt, these higher APRs or 0% balance transfer offers that run for a limited amount of time could turn out to be a risky move. And as financial guru Suze Orman told us, getting out of debt so you can prepare for your future is the way to go.

Ouch — Average Credit Card APR Now Tops 15 Percent [Time]


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  1. Loias supports harsher punishments against corporations says:

    Yes, that $800 water bill certainly effects the San Clemente Resident’s credit card interest rate…?

    • The Lone Gunman says:

      Clicking the link appears to go where it’s supposed to, but too am puzzled as to why that $800 water bill is what shows here as the identifier tag.

      Of course, water will become the new currency this century as it becomes scarcer, so in a few more decades, we’ll all be concerned about our Moisturization Score rather than FICO…

      • CubeRat says:

        Same reason the picture they’re using is of a debit card.

        If I could get 15% for my debit card (interest on my money) I’d be one happy camper.

  2. Coffee says:

    Banks blamed the Credit CARD Act of 2009 for the higher APRs then.

    I predicted this would happen when BofA and other banks capitulated with customers’ demands to cancel the $5 debit card fee on checking accounts. They’re going to look to recoup the money by squeezing wherever they legally can, and if it means jacking interest rates, so be it. You can plug the dyke any way you want…that water is still going to find a way through.

    • Bsamm09 says:

      Because a small % of people cannot use their credit cards wisely, everyone has higher rates.

      (I still believe that BOA accomplished exactly what they wanted to with the $5 fee. People affected by it left. Once they got rid of these unprofitable people, they removed it.Their recent 10-K and 10-Qs have been littered with removing dead weight.)

      • Loias supports harsher punishments against corporations says:

        Since the $5 fee never truly went into effect, I doubt it got people to leave.

        • frank64 says:

          The announcement prompted many people to leave. There were many posts here about it. They wanted to beat the fee and were fed up.

          BOA got the worst of both worlds on the fee announcement, they lost many customers, and didn’t get the fee from the ones who stayed.

        • Awesome McAwesomeness says:

          Actually, it did. It spurred a huge movement of people to credit unions. It was all over the news.

      • ajlien says:

        I take issue with your assumption that the people protesting the fee were “unprofitable.” The most profitable bank customers that have low enough balances to care about a $5 fee are also the ones who usually struggle making payments and balancing their checkbooks, therefore often incur heavy bank fees. This doesn’t take into account customers who left because they’re “hippie liberals” and not actually destitute.

    • frank64 says:

      They have to price their product fairly now, and can’t use gotcha fees to reel people in too screw them later. It is much better now so we as consumers know what we will be paying. The higher rates aren’t really needed, and I can shop and find lower rates elsewhere. I opened up a new card recently for 9.96%(actually a little higher because I picked one with rewards) and have kept a 9.24% one. I dropped ones that were higher.

      Also, I have a sense of fairness and don’t want to benefit from others mistakes. I think it was more consumers fault for allowing it to happen, and I didn’t put up with it, but things were so out of hand that the law was needed.

      • TouchMyMonkey says:

        7.9% at my CU, bichez!

        Seriously, the silver lining is that once people realize up front what these things cost, they’ll use them less. Econ 101 and all that. The market works when it is forced to.

        • frank64 says:

          Huge, HUGE silver lining. Trumps anything else. That the banks doubled peoples rates on past purchases was unconscionable. No other way to say it, and was enough to sway this libertarian to the dark side of gov reg.

  3. theblackdog says:

    So far USAA has not jacked up the rate on my card, but you can bet I will pay attention before the rare instance that I can’t pay it all off that month.

  4. Loias supports harsher punishments against corporations says:

    I cry foul on the CC agencies with their blame on the CC Act. It only prevents them from arbitrarily raising APR rates. Now it can only occur when a person doesn’t pay their bills. How is any agency harmed by having to keep the APR rate they promised on day 1 to a customer who has continued to live up to their end by paying it on time?

    • TuxthePenguin says:

      But you have to remember that your “rate” is really a guage of how well you pay your bills. They lump you into cohort based on a dozen factors if not more – this is what the actuaries they pay good money do – and “price” your APR accordingly. They’ll take a lower amount up front to bring people in, knowing that it’ll offset losses from having it a bit too low for some people before they can correct it. (The underlying logic is that the higher the APR, the less you will spend for fear of not being able to afford the interest. Not sure if it works, but that’s the theory). Now limit the ability for them to adjust… they’ll just price more conservatively upfront.

      Think of it as a football game. After the first quarter, they look at your rush/pass rating and who you’re using in your passing game or rushing game. If by the end of the next quarter you aren’t within some threshold of your first quarter, they award your opponent points based on how far you deviated (after all, if you ran 75% and suddenly start throwing, that’s not fair to the other team!). If you did something like that – taking away options – it’ll mean that in that trial period you’d see a more balanced approach. Same logic.

      The ability to adjust APR is almost more important than even a credit check. What the credit check really should be for is the credit limit…

      • frank64 says:

        I understand your point, and I can see where it is a legitimate tool lost. However, in practice this is not what the banks did most of the time. Many banks raised rates during the crisis and made a point that it was due to market conditions, and not due to anything in the borrowers history. They also did it to past balances, which meant that you were asked to pay whatever they wanted for past purchases. They did not lose the tool completely, paying late will get you an increase, and the banks can raise the rate on future purchases. This allows the banks to price the credit based on your risk at the time the risk is imposed, and also allows us to know what the rate will be when we decide to make the purchase.

        I consider myself a libertarian but I think this law was needed for very practical reasons.

        • SideshowCrono says:

          Market conditions are part of the equation to determine your creditworthiness. It makes perfect sense as they are good indicators of your ability to repay your own debt. Economic pain that starts somewhere ripples throughout the economy and effects everyone.

          Credit cards are just an unsecured, variable line of credit. If they think you are less likely to pay back then they will charge you a higher interest rate. If for some reason the government decides that all credit card rates should be fixed rates as of the time of purchase, everyone will just pay slightly higher rates.

  5. dks64 says:

    About 4 years ago, my APR jumped from about 10-11% to 20% without notice. That bump with my low income made it even harder to get out of debt. A few months ago I paid the last of it off, after paying a fortune in interest. I won’t do that again unless I truly have to (emergency situations). I learned from it.

  6. CubeRat says:

    Citi, who calmly lowered my credit limit (in steps) from 40K to 6K, and raised the rates from 10.99% to 29.99%. They also added late payment fees and penalty rate now 34.99%. I use it once a year and pay it off immediately, so the account is considered active.

    And, bless their hearts, they keep sending me letters asking why I don’t use it……

    • RandomMutterings says:

      Why bother keeping that card? Sounds like they do not value your business!

      • CubeRat says:

        I keep it because it is the oldest card in my credit history. I’ve had it for 26 years, I don’t have an annual fee, and it is available for emergencies. Before the rate increases, I used it for my daily purchases, automatic bill payments etc and usually paid it off each statement. I’d only carry a balance if I made a very large purchase, and it had a nice low interest rate.

        I only have one other credit card, it’s only 3.5 years old, which I now use for the auto-payments and daily purchases. I travel a lot, many times with less than 3 days notice, so I have all my bills on auto pay on credit card, that way I never have late fees. I pay my credit card on the 16th of each month. My mortgage is the only debt I carry.

        I worked very hard for my credit rating, and I work very hard to keep it pretty.

        • frank64 says:

          I posted below that closing your card won’t affect your score because the trade line stays, and I closed a 10 year card with probably no affect. It would be slightly different because it goes by average score, so ten years from now you may take a small hit. I don’t think it would be much though. I would open up another card and set that up for your daily use, just to vote with your wallet. You probably put too much value in the small hit that your score would take. To many people make bad decisions based on “what it would do to my score”. Normally if you pay your bills on time, have a few cards and don’t run them up, anything you do will not hurt your score by anything to be worried about. Especially if you go on the principle that you don’t need banks for much. They are expensive.

          • CubeRat says:

            Well, I’m not going to close an established account to open one somewhere else, especially at a CU. I understand you like CUs. I am not a CU fan – I will NEVER again give them a chance to screw up my account and I do not recommend them to anyone.

            FYI, I don’t have any problem with my bank fees as I so rarely pay any sort of bank fee. Most can be avoided if the account is maintained (balanced) and I don’t ever OD my account. Not an issue for me.

            • frank64 says:

              I was more commenting on what Citi did to you, I would think you would not want to do business with them. That is part of why banks can do what they do, whatever they do, many stick with them for reasons I don’t buy.

              There are other banks, not just CU’s you could go to. I use a regional bank.

    • Dano says:

      Citibank lowered my limit from $30k to $12k, and also raised my interest rate from a fixed rate of 7.9% to a variable of 12.9% because of “market conditions”

      AMEX Blue raised my interest rate by 8%, again due to “market conditions” Interestingly I have me never missed a payment, have kept my balance below 5% of the total limit, and have near perfect credit.

      So I have moved to my credit unions Mastercard. The rate is fixed at 5.7%. I have also moved all my assets from the bank to a credit union.

      The irony here is the more banks try to strangle their clients with this nickel/dime crap, the more money they will lose from people moving to credit unions in droves.

  7. Necoras says:

    So? Don’t carry a balance, and ignore the interest rate. This is a non-issue. I think SNL had a PSA about this.

    • Loias supports harsher punishments against corporations says:

      So all those unexpected but expensive life events should just be put on an IOU card?

      • frank64 says:

        Unexpected events are expected, you are better off doing everything you can to plan for them, even if it means making some sacrifices. More often than not, I see those that need to charge haven’t planned and don’t want to make any sacrifices.

        I am paying off my card due to unemployment, so I realize issues come up, when I pay it off though, I am going to save up for emergencies, and actually have a small cushion now, bigger than most people have who make much more.

        • Me - now with more humidity says:

          Let us know how that “unexpected events are expected” BS works for you after a debilitating car accident, that untreatable cancer diagnosis, not finding a job for two years, or when that tornado wipes out your home and your insurer decides not to pay.

          • frank64 says:

            Let us know how that “unexpected events are expected” BS works for you after a debilitating car accident, that untreatable cancer diagnosis, not finding a job for two years, or when that tornado wipes out your home and your insurer decides not to pay.

            See, I did address that, but you seem to have missed it. That this can happen does not mean that I shouldn’t try to plan for those small things I can plan for. It will also make it a little better for when the devastating things happen. I did say I was unemployed. It WAS for two years and I had to use my card a bit. My saving allowed me to use it sparingly and made it appear to the banks I wasn’t distressed. Just that something devastating could happen does not mean I should not plan at all. That is a deafestt attitude and leaves one open to the banks taking advantage.

            Your logic is very flawed and is why many people are in the position they are in. It is like saying you can get lung cancer anyway, so might as well smoke. It is still better not to smoke, and it is better to plan ahead as much as you can, even if it means no iPad, and keeping the car a few more years instead of getting a new one as soon as you have it paid off.

      • unpolloloco says:

        Why an emergency fund is more or less a necessity. I understand that some people can’t build one due to life situations. However, I’d claim most people who say they can’t can.

        • Costner says:

          The same people who say they can’t afford an emergency fund and the types who somehow feel they will be able to make credit card payments after they use it for an emergency. Also, a new pair of shoes on sale for 40% off somehow ends up being an emergency.

          If people would just save a bit each month in preparation for a true emergency, they could save up enough to where it wouldn’t be a huge problem. I’d rather my funds sit in an account earning me a small amount of interest rather than having to use a credit card that charges almost double digit interest.

          There are very few people who honestly can’t afford an emergency fund – and those that can’t afford it surely can’t afford to pay interest to a credit card company.

    • ARP says:

      If everyone follow your advice either: 1) There would be an annual fee for using the card; and/or 2) You would have to charge a certain amount using the card, so they can continue to profit at double digit rates, despite the economy.

      • frank64 says:

        Still good advice. Many people have multiple cards anyway, if banks have account holders that don’t use the cards, or don’t use them much, then it would be legitimate for them to charge a annual fee. Consumers then would have to make choices based on the cost.

        They also charge 2-3% to merchants. The costs to the banks are mostly fixed, meaning beyond a certain point, it is mostly profit. They do make nice profits just on this. The only problems is that they expect huge profits. Let them adjust, or I will adjust to their pricing, competitors would develop.

      • Cor Aquilonis says:

        If everyone ate salmon, there would be no salmon left! Even so, it doesn’t mean eating salmon is a bad thing.

        Everyone doing anything all at once will never happen, therefore there’s no need to fret over what would happen if they did.

  8. yabdor says:

    I never understand these kinds of posts. Don’t spend money you don’t have and pay off the balance at the end of the month and there are no problems. I think the big banks are just as much a bunch of shysters as anyone else. But issues of poor impulse control need go no further than the person staring back at you from the mirror when you’re shaving in the morning. That’s the person you need to have a chat with if your finances aren’t in order… not the bank.

  9. Scamazon says:

    What is the difference between a loan shark and a credit card company? Loansharking is illegal, the credit cards have their government regulators in their pockets, funded by lobby money who ignore and eliminate those nasty usury laws…

    • Bsamm09 says:

      Loan sharks collect. Thats the difference. The good news is that they won’t kill you. Bad news is you will wish you were dead.

      I had a buddy who was in about $25K (not that much really) and couldn’t pay. He now has no natural teeth and a lot of metal inside him from bone repair. Still had to pay though.

      For all the hate on corporations who “prey” on people with bad credit, these laws that limit the number of customers banks can have will push the people with really bad credit to payday loans or even loan sharks.

      The worst thing about loan sharks is when they sell your debt to a “collection agency”, these guys buy for pennies on the dollar but since the law doesn’t apply to them collect most of the debt owed. Calls to their regulators are almost non-existent.

  10. lagotech says:

    I use my Credit card for everything possible, and in the last 7 years have paid 0% interest, and $0 in fees. In fact Chase has paid me over $3K since 2004 just for using it. Anyone can have the same thing. just don’t buy things that you cannot immediately pay off.

    • MrEvil says:

      Ditto, it’s the same thing I do and I’m sure Capital One hates me for paying off my statement balance in full each and every month.

      • hansolo247 says:

        Perhaps they’d prefer you didn’t, but even paying it off each month, your CC company is still bringing in 15%+ per year on every dollar they loan you via the merchant fees. And since you pay it off like clockwork and can literally be depended upon to do so, the loan is very low risk.

        How? loan you a dollar, they recoup 2.5% or so, they pay you maybe 1-1.2%, you pay the dollar back, they reloan the dollar to you again. Yes, they have administrative expenses to cover, but it’s still profitable for them.

    • Rachacha says:

      Same here. The only balance I maintain are on 0% cards and I make sure to pay it off before the due date. I use the interest free rate to help pay down my mortgage or to finance large purchases (major home improvement projects etc). If a bank is willing to loan me $20,000 interest free for 18-24 months, that money is better off in my bank account earning me money than in the hands of the bank.

  11. TasteyCat says:

    If you’re using credit cards as an additional income source, this matters. Otherwise, nothing to see here. Charge what you can afford and pay it off in full each month. You will not pay a cent in interest, will earn rewards, and receive the protections and convenience of paying by credit card.

  12. GoldVRod says:

    When I opened my Harley Davidson VISA card the interest rate was less than 7% and my credit limit was $15K. I used this little chunk to pay for things like a kitchen remodel that we did and some gadget toys and so on – I was happy to pay the card off bit by bit at 7%.

    Naturally, since I was a good customer and have a good credit score and never missed a payment they felt I was a good target for an interest raise so they slapped me with a ‘boo! Surprise’ 15% pa interest rate about three years ago – that was after the debt amount got healthy enough for them.

    Now that’s fair enough and they had the right to do that I guess under our agreement but they knew I wouldn’t risk my credit history by defaulting and so effectively I got punished for being a responsible citizen. Had I defaulted or declared bankruptcy I probably could have paid the debt off for 25cents on the dollar.

    The vile part was that ALL cash advances (which was about $3K of the total) were charged at 25% pa regardless of when the cash advance was taken, even if it was withdrawn yesterday. It became a secondary debt only to be chipped away at when the principal credit card debt was paid off. I didn’t know this (yeah I’m stupid but I’ve only been in the USA for 15 years) and THAT was royally increasing my minimum monthly payment amount.

    According to the online debt calculators that were linked here on Consumerist it would have taken me 65 years to pay off the 13K or so that I owed by paying the minimum… but paying an extra $25 a month would cut that down to 47 years. Either way mathematically I’d be dead before paying off what is in all honesty a fairly small amount of debt by paying the minimum or even more than the minimum.

    I paid off the amount totally and will NEVER run up a credit card bill again. I wish I could close the account now that it’s at zero but that too would negatively affect my credit score.


    • frank64 says:

      Most banks gave an opt out for rate increases. You could pay off the card, it was just closed. I did this with Citi and it did not hurt my score much at all.

      You could probably close your account without any affect on your score. The trade line stays for 10 years, and by then you will have other old ones. The only other thing is your utilzation, as long as you are not charging much more than 10% of your total limits, it won’t be a factor.

      I don’t care about my score that much, I am going to save a big deposit for a car and don’t need anything else now. As long as I don’t pay anything late, nothing I can do will hurt my score enough to hurt me. I save up before I spend, then they don’t matter so much. Getting a house would be a slightly different matter, but it still applies to most people. Have a few cards PIF, and don’t pay anything late. The score will reflect that.

  13. longfeltwant says:

    What’s an APR, and why should I care?

    • hansolo247 says:

      LOL, win.

      APRs are (generally) something that people with poor impulse control worry about I guess.

      • ajlien says:

        You mean, 60% of the credit card carrying population?

        Way to be a snob

        • frank64 says:

          This lets me bring up the smoking analogy again. The smoking rate in 1955 for males was 57%. This must mean that those who told people not to smoke in 1955 were being snobs. I am sure they were called that by people who wanted to smoke.

          I don’t think that if the majority does it, it must be OK is the best way to make a decision.

  14. TuxthePenguin says:

    “However, the law simply limits how and when credit card companies can raise APRs ‚Äî not the higher rates they can charge right off the bat.”

    You’re not connecting the dots. If I can increase rates to fit actual experience with a customer, I might start off a bit lower and basically look at it as an incentive to bring in the customers. I might lose a bit of money in the future as those rates are too low for their risk profile before I can adjust them, but I’ll earn a bit more in the here-and-now as a few more come in. Now, you limit that ability to correct in the future. So what am I going to do? I’ll be more honest up front with my pricing.

  15. buzz86us says:

    and yet i am unaffected paying your bill in full and on time means the credit card company doesn’t get a cent from you it is the retailer who pays.

  16. John says:

    APR remains 0% if you do as you are SUPPOSED to do, and pay it off at the end of each month.

  17. ancientone567 says:

    For God sakes people YOU DON’T NEED CREDIT CARDS! Just get a debit card with a visa or mastercard logo and link it to a line of credit from your bank based off your credit score. Bam you have a free credit card. I have one with a very modest 1000- line of credit which if I use the only fee is for borrowing money is at 2.9% apr and the rate cannot change and it has none of the credit card bs charges etc. So if I borrow 100- at that rate and pay if off next month its a few cents not the shirt off my back. Find a good bank and watch your credit score folks.

    • frank64 says:

      There is more risk with fraud and mistakes with debit cards, it is easier to get the your money back if you use a credit card and dispute it. Also some places put large holds on your account for purchases. The rewards are often better with a card, and even if you find rewards with a debit, you are much more limited.

      Having a few cards helps your score, and while I have said in other posts that your goal should be to not care about your score, I was talking about a range that was within having some credit and not paying late. I have seen responsible people not get home loans due to not having had any credit. Cards would have helped them. You can use credit cards and PIF every month and get the best of both on this, no need to get that extreme, although I understand the sentiment.

      • ancientone567 says:

        You can run your debit card as a credit card and have all the same protection. So run big purchases as credit. Mine is Visa debt so run it as visa credit is the same.

        • frank64 says:

          The protection is after the fact, the money is already gone. It can take well over a month to resolve, I would feel much less comfortable is the money was already gone. The bank makes the decision and I use Amex anytime I think there might be a problem, the have a rep for being much better.

          Even without the protection issue, the other reasons are enough.

    • NeverLetMeDown says:

      Using a debit card like that is the worst of both worlds. You don’t get the benefits of a credit card (rewards, free float, not having the money taken out of your account if there’s an erroneous charge), but don’t have the discipline of not being able to spend more than you have, either.

  18. dotkat says:

    I love the graphic. Do I have to go to Wells Fargo to a credit card with Ceiling Cat on it? It’s cute. By the way, the story is about credit cards and the picture is of a debit card. Ceiling Cat knows the difference.

  19. Carlos Spicy Weiner says:

    The way the world works, is profit :-(. When the banks got stuck with a lot of bad home loans (which they encouraged), and new rules started tightening up on CC fees, the banks needed to expect profits from somewhere. So, welcome the highest CC rates I’ve seen in a while, all at a time when interest rates in general are at historic lows.

    BTW, to all you who are so smart, and pay off their bill every month, not everyone can. In a perfect personal economic picture, yes. But if a sudden emergency comes up and you don’t have the income to keep a few thousand in the bank for such emergencies, it has to go on a credit card. Please don’t act likeveryonene who runs a balance is just going on shopping sprees

    • frank64 says:

      Many of us have answered that, just because a small majority have issues that would make anyone in trouble does not negate those that don’t plan at all. As some one else posted, if you can’t afford saving up, how can you afford the emergency PLUS the interest. Interest is very expensive. It is much better to save.

      • Carlos Spicy Weiner says:

        Some people’s emergencies can overwhelm savings in an instant. How about a major medical event, that costs thousands out of pocket, to be followed by not being able to work during that time? I totally agree that alot of people just charge things because it seems like they’re not really spending the money, but high interest rates can really hurt folks who, from no fault of their own, end up with a large balance.