economy
February 5, 2026
Why are credit card rates so high right now? Here's what experts say.
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms.
TL;DR
- Average credit card interest rates are nearing 21%, double the rate from 10 years ago.
- The Federal Reserve's rate increases to combat inflation have driven up consumer borrowing costs, particularly for credit cards tied to the prime rate.
- Credit card issuers are slower to lower rates than they are to raise them when the Fed adjusts policy.
- Issuers maintain high rates strategically for profit and due to increased risk factors like declining credit scores and rising utilization rates.
- Increasing consumer delinquency rates are also a factor contributing to higher credit card rates.
- Compounding interest exacerbates debt by charging interest on both the principal and accumulated interest.
- Strategies to combat high rates include shopping for new cards (especially from credit unions), balance transfers, debt consolidation loans, and seeking professional debt relief or credit counseling.
Continue reading the original article