Average Credit Card Interest Rate Hits 24% Despite Fed Rate Cuts

Despite three Federal Reserve rate cuts, the average credit card interest rate has climbed to 24.2%, the highest on record, as banks widen profit margins and rising delinquencies increase risk premiums.

The Disconnect

While the fed funds rate has dropped 0.75%, credit card rates have actually increased 0.5%. Banks cite rising charge-offs, which have reached 4.2% — the highest since the 2009 financial crisis.

Consumer Impact

The average American carries $6,500 in credit card debt. At 24.2% APR, minimum payments barely cover interest, creating a debt trap that financial advisors say is the biggest threat to household wealth.

• Average credit card APR: 24.2%
• Highest on record despite Fed cuts
• Charge-offs at 4.2% — highest since 2009
• Average debt per cardholder: $6,500