Answer (from Creditcards.com via Motley Fool): 15.36% (a record high!)

A good reminder for students about a few key characteristics of credit cards:

• Why are rates going up? Blame the rewards programs as one reason:

“Another likely factor is the proliferation of loyalty-boosting rewards cards, which offer everything from cash back to miles for a flight. Rewarding cardholders can certainly boost loyalty and transactions, but it comes with a price to the lender. In return for that added bonus, the lender may choose (and often does) to attach a higher variable APR to its card. As of Jan. 2017, the average cash back credit card had an APR of 15.51%, which is slightly higher than the national average APR.”

• Their interest rates vary based on a certain index (usually Prime or LIBOR), so when the Federal Reserve announces an increase in interest rates it typically filters through to the interest rates on credit cards.

• Rates vary based on credit scores:”As you may have rightly surmised, there’s a wide gamut of APRs depending on your credit score and the purpose of the credit card. For example, consumers with excellent credit can target a low interest credit card. CreditCards.com notes that low interest card APRs are just 12.16%. Credit cards designed for college students also tend to have favorably low APRs (13.67% as of Jan. 2017). On the flip side, consumers with bad credit face a painfully high average APR of 22.98%.”

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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