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Historical Credit Card Interest Rates

Credit card interest rates are the lowest they’ve been since 2003, in purely nominal terms. However, most economists would tell you that looking at nominal interest rates over time doesn’t tell you much.

When analyzing historical interest rates, it is important to adjust for the effects of inflation. Economists will argue all day about whether the government calculated CPI is a good measure for inflation, and even the BLS is quick to highlight some of CPI’s shortcomings, but for our purposes we’ll assume it’s a decent proxy.

Net of CPI, credit card interest rates haven’t been this low since 1980. Even though average credit card rates were over 17% in the year that ushered in Pac-Man and Post-It Notes, inflation was running rampant at over 10%, so real rates were actually quite low.

Low rates aren’t just limited to credit cards these days. You’ve probably noticed, that your checking account, CDs, and savings accounts are earning close to 0% lately.

Below, you’ll find the raw data for the charts above, as well as our methodology for estimating 2011 numbers.

Average interest charged by commercial banks, on credit cards, 1974-present.

Year Historical Credit Card Interest Rate Inflation (CPI) Credit Card Interest Rate, In Excess of CPI
1974 17.20% 9.14% 8.06%
1975 17.16% 5.77% 11.39%
1976 17.05% 6.47% 10.58%
1977 16.88% 7.63% 9.25%
1978 17.03% 11.25% 5.78%
1979 17.03% 13.50% 3.53%
1980 17.31% 10.38% 6.93%
1981 17.78% 6.16% 11.62%
1982 18.51% 3.16% 15.35%
1983 18.78% 4.37% 14.41%
1984 18.77% 3.53% 15.24%
1985 18.69% 1.94% 16.75%
1986 18.26% 3.58% 14.68%
1987 17.92% 4.10% 13.82%
1988 17.78% 4.79% 12.99%
1989 18.02% 5.42% 12.60%
1990 18.17% 4.22% 13.95%
1991 18.23% 3.04% 15.19%
1992 17.78% 2.97% 14.81%
1993 16.83% 2.60% 14.23%
1994 15.77% 2.81% 12.96%
1995 15.79% 2.94% 12.85%
1996 15.50% 2.34% 13.16%
1997 15.57% 1.55% 14.02%
1998 15.59% 2.19% 13.40%
1999 14.81% 3.37% 11.44%
2000 14.91% 2.82% 12.09%
2001 14.44% 1.60% 12.84%
2002 13.09% 2.30% 10.79%
2003 12.92% 2.67% 10.25%
2004 13.21% 3.37% 9.84%
2005 14.54% 3.22% 11.32%
2006 14.73% 2.87% 11.86%
2007 14.68% 3.82% 10.86%
2008 13.57% -0.33% 13.90%
2009 14.31% 1.65% 12.66%
2010 14.26% 3.14% 11.12%
2011 13.04% 2.70% 10.34%

Chart last updated May 09, 2012.


Source: Federal Reserve Board of Governors, Federal Reserve Statistical Release, St. Louis Fed, NerdWallet.com

Methodology: The data is drawn from several sources, including the Federal Reserve and Bureau of Labor Statistics. 2011 numbers represent NerdWallet estimates, based on numbers through December 1, 2011.

Before Nov ’94, rates were those reported in the Fed’s “Quarterly Report of Interest Rates on Selected Direct Installment Loans”. After that, rates are drawn from the Fed’s “Quarterly Report of Credit Card Interest Rates for those credit card holders incurring interest charges”.

Credit card interest rates are a simple average of all reported credit card interest rates, rather than the weighted average based on accounts that are actually open. Credit card interest rates exclude “revolving” users, who do not typically carry a balance or incur any interest expenses.