Your credit card’s interest rate isn’t just some arbitrary number. It depends on a number of different factors, and Credit.com breaks them down.


The average credit card interest rate is about 12% for all accounts, according to the Federal Reserve. It’s about 13% for accounts that have assessed interest. Obviously, your own interest rate depends on your creditworthiness. If your credit is poor, your rate might be even higher than that.

Typically, the better your credit score, the lower your rate. But Credit.com points out that it depends on the card, too—some rewards cards offer awesome perks, and the tradeoff is usually higher interest rates. (Of course, if you’re using rewards responsibly, you shouldn’t have to worry about this.)


What’s more, your interest rate can vary depending on when the Federal Reserve changes the Federal Funds Rate. When the Fed raised rates by 0.25% last year, the standard interest rate for all variable credit cards increased by the same amount.

Also, your credit card actually has different interest rates. They explain:

...most credit cards can have several different interest rates. The one that most people think of is the standard interest rate for purchases. But your card could also have different rates for cash advances and balance transfers. It can also have a lower, promotional financing rate that applies to new accounts for a limited time, and a higher penalty interest rate that can be imposed if you have missed payments.


Finally, we’ve told you how easy it can be to score a lower rate—all it takes is a phone call. It’s not going to work every time, but it works quite often, so it’s worth a shot. For more detail, head to their full post at the link below.

Photo by Ed Ivanushkin

Is Your Credit Card Interest Rate Too High? | Credit.com