The average credit card annual percentage rate (APR) climbed to 17.08 percent this week, the highest number in more than 20 years.
If your credit card’s APR is variable — as most in the U.S. are — now is the time to look at your credit card rates to determine what it really means for your finances. The average maximum APR is now at 24.45 percent. Meanwhile, the average median card APR has climbed to 20.77 percent, according to creditcards.com.
As APRs climb, interest payments on card balances also will rise. Checking the APR on every card in your wallet may be just the incentive that credit card holders need to pay off balances or, at least, not add to them.
“As interest rates continue to rise, it becomes even more important to get out from under credit card debt,” said Patrick Daniels, director of financial planning at Precedent Asset Management, Indianapolis. “If the credit card balance is large, the interest charges may be more than what a person can afford to pay each month. The problem only compounds from there.”