Credit card interest rates rise as debt increases

Credit card interest rates appear to be slowly ticking up.

According to Bankrate, the national average interest rate for credit cards was found to be 19.70 percent on Oct. 21, and has been steadily increasing since around May.

As a bit of a refresher, the Consumer Financial Protection Bureau (CFPB) explains that a credit card’s interest rate is the price people pay for borrowing that money. Bankrate adds that these rates are dictated by two main things: the Prime Rate — which is the benchmark banks use for creditworthy customers that’s typically three percentage points higher than the top-end of federal funds rate — and the issuer’s markup, which is set at the credit card issuer’s discretion.

As for why these rates are increasing, Bankrate states that credit card rate changes occur with the Fed rate. So, when the Fed raised the benchmark rate by 25 basis points on Sept. 16 — causing the target range to become 3.75 percent to 4.00 percent — credit interest rates went up, on average, by 0.12 percent.

The CFPB notes that people can avoid paying interest on their credit cards by paying off their balances in full each month. Credit cards, too, tend to have higher interest in comparison to other loans like a mortgage as the debt is unsecured, Bankrate adds.

Payments Dive reports that data from the Federal Reserve Board’s triennial Survey of Consumer Finances found that credit card debt has risen nationwide from $150 to $3,100 between 2022 and 2025. In 2025, about 44.7 percent of families reported having a credit card balance after their last payment declined.

“Families were more likely to be behind on their financial obligations than at any point since the 2010 survey,” the report reads. “Between the 2022 and 2025 surveys, the share of families that reported being behind on loan payments sharply increased from about 12 percent to almost 20 percent.”