Current credit card interest rates

Core Insights - The adjustment of credit card rates is directly tied to changes in the Prime Rate, affecting both new and existing balances without requiring special notice [1][6] - The CARD Act of 2010 has limited the flexibility of credit card issuers in changing rates, making it easier for them to adjust rates by linking them to the Prime Rate [2] - The average credit card interest rate is currently 19.73 percent, a decrease from a record-high of 20.79 percent [5] Group 1: Credit Card Rate Adjustments - Credit card agreements allow for rate adjustments based on the Prime Rate, impacting cardholders' balances without prior notice [1] - The Prime Rate is currently set at 6.75 percent, typically 3 percentage points higher than the federal funds rate [4] - Federal Reserve rate changes generally pass through to customers within one to two months, affecting both new and existing balances [6] Group 2: Credit Card Interest Rates - The average markup for credit card rates is between 12 and 13 percent above the Prime Rate [4] - Credit card interest rates are expressed as APRs, with daily interest accruing on carried balances [11] - A consumer with $5,000 in credit card debt at a 20 percent APR could end up paying approximately $7,723 in interest if only making minimum payments [12] Group 3: Types of Credit Card Interest Rates - Different types of interest rates apply to various transactions, including balance transfers, introductory rates, cash advances, and penalty APRs [14] - The average credit card rate is calculated based on the midpoint of APR ranges from various credit cards, reflecting the creditworthiness of consumers [13]