Credit Card Rate Trends

If you’re planning on applying for a new credit card, you can use this chart as a point of reference.

The chart shows the national credit card average rate trends for bad, good & excellent credit scores over the past 12 months.

Because credit card is an unsecured revolving loan, credit card interest rates closely related to the user’s credit score. Therefore, the top chart shows the national credit card average rate trends over the past 12 months for three different credit score ranges – bad, good & excellent. The bottom chart shows the national credit card average rate trends for three different types card types – low interest cards, balance transfer cards & cash back cards.

Historically, users with excellent credit score (720+) could have expected to get the best terms. However, things change with the current credit crunch and so current interest rates are higher than in the past. On the other end of the spectrum, bad credit interest rates can vary drastically and will often include many additional fees.

Points of Interest

• Credit cards companies charge interest ONLY on the balance that you carry. If you pay the balance in full every month – you will never pay interest, and so the credit card’s interest rate becomes meaningless!
• Different card offer different benefits. It may be worth to pay a few points more on interest rate (especially if you don’t carry balance) if you plan to accumulate airline mileage, for instance.
• Credit card interest rates are generally higher than any other loans or lines of credit you can get. Convenient as it may be, it’s better to apply for a loan than carry a balance on your credit card.