Credit card interest margin

How has the credit card margin changed since 1994?

The margin over prime was 7.62 percentage points in November 1994 and 10.26 percentage points in August 2016. In August 2026 it was 15.61 percentage points. When the Fed cuts rates, the prime rate follows it within days, but the average card APR has fallen more slowly, so the margin widens; it widened after the cuts of 2001, 2008 and 2020, and again since 2024.

Why don’t credit card rates go down when the Fed cuts?

They do go down, but by less than the Fed’s rate. Since August 2024, the Fed funds rate has fallen 1.70 percentage points, while the average card APR on accounts charged interest has fallen 1.01 percentage points: 59% of the cut so far. The difference is the margin, which rose from 14.87 percentage points to 15.61 percentage points over prime in the same period.

Most card APRs are variable and move with the prime rate, which moves with the Fed’s rate. Of the 141 US cards in our records, 108 tie it to the prime rate in their own pricing terms, most in these words: “This APR will vary with the market based on the Prime Rate.” The average falls by less because the margin above prime has widened. These figures can’t show why; the CFPB’s 2024 analysis found that issuers raised their APR margins (see below). For the underlying rate series, see average credit card APRs over time.

Our calculation from the Federal Reserve’s series. Each cycle runs from the last card-survey month at the Fed funds rate’s peak, before the first cut, to the first month at its low, or to the latest reading if cuts may continue. Card rates are surveyed every three months, so the months are the nearest survey months, not the dates of the Fed’s decisions.

What margins do credit card issuers set?

Across the 106 US cards in our records whose APR follows the prime rate, from 25 issuers, the median card’s lowest purchase APR is 12.74 percentage points above prime and its highest 21.49 percentage points. Which end you get depends on your credit. The lowest margin we found is 3.49 percentage points (Navy Federal Platinum Credit Card); the highest is 27.99 percentage points (Bilt Blue Card).

These are what issuers advertise to new applicants today, so they aren’t the same measure as the Federal Reserve’s average above, which covers existing balances. For 74 of the 106 cards, the issuer states its margin in its own terms (“Prime Rate + 18.74%”), and we quote it. For the rest, we worked the margin out as the card’s published APR minus the prime rate on the day we checked it (7.00%, between October 4, 2026 and October 22, 2026). The stated margins show that 23 cards’ published APRs were still built on an earlier prime rate of 6.75% when we checked them, so their live APRs may since have risen with the prime rate.

12.74 pts

median margin at the bottom of a card’s APR range, for applicants with the best credit.

21.49 pts

median margin at the top of the range, which applicants with weaker credit get.

106 of 141

US cards in our records tie their APR to the prime rate in the issuer’s own words.

Where an issuer states no margin and its page hadn’t caught up with a change in the prime rate when we checked it, the margin here is off by that change. Where an APR is capped (18% at federal credit unions, for example), the margin shown at the top is what the cap allows, not the margin the issuer states. Cards with a fixed APR, or terms that don’t mention the prime rate, aren’t included. Download every card as a CSV file.

What changed in the latest reading?

The Federal Reserve’s August 2026 card rate survey put the average APR on accounts charged interest at 22.36%, up 0.21 percentage points on May 2026. The prime rate averaged 6.75% that month (unchanged), so the margin over prime is 15.61 percentage points, up 0.21 percentage points. The next reading is for the next survey month, published in the Federal Reserve’s G.19 release about five weeks after the month ends.

Is the credit card margin at a record high?

Yes: at 15.61 percentage points over prime in August 2026, the margin is the highest in the Federal Reserve’s data. In February 2024 the CFPB reported that “APR margin for revolving accounts is now at 14.3 percent, the highest point in recent history” (CFPB, checked October 14, 2026). The same measure from the Federal Reserve’s published series gives 14.27 percentage points for August 2023, so the two agree, and the margin has risen since.

What does the wider margin cost a cardholder?

On a $5,000 balance carried for a year, the average APR of 22.36% costs about $1,118 in interest. With today’s prime rate and the margin of August 2016 (10.26 percentage points), the APR would be 17.01% and the interest about $851: $267 a year less. This is our illustration: simple interest on a constant balance, ignoring compounding, fees and payments.

The CFPB found that major issuers earned an “estimated $25 billion in additional interest revenue by raising APR margin”, and that “excess APR margin may have cost the average cardholder over $250” in 2023.

How we calculate the margin

• Card APR: the Federal Reserve’s average interest rate on credit card accounts assessed interest, from its survey of commercial banks, weighted by the balances charged interest. It is reported for February, May, August and November.
• Prime rate: the bank prime loan rate, the benchmark most card APRs are set from (“prime plus” a margin). We use its monthly average for the same month.
• Fed funds rate: the effective federal funds rate, the overnight rate the Federal Reserve targets, as a monthly average.
• Margin: the card APR minus each rate in the same month, in percentage points. The margin pays for losses, operating costs and rewards as well as profit, so it is not a measure of profit by itself.
• Updates: an automated job downloads the three series from FRED every week and saves a new copy only when the data changes; this page and the download update with it.

For all of the Federal Reserve’s card figures, including balances and late payments, see our credit card statistics, for what the margin costs where you live, the margin’s cost in each state, and for how far every card sits above the proposed 10% cap, the 10% rate cap test.

Use this data

Download every month as a CSV file, with the inputs and both margins. The margins are our calculation, free to use with credit under CC BY 4.0; the Federal Reserve’s own series are in the public domain.

Cite this page

BestCreditCards, “Credit card interest margin,” updated October 14, 2026, https://bestcredit.cards/credit-card-interest-margin. Calculated from Federal Reserve G.19 and H.15 data.

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The chart image carries its source. Copy this onto your page:

<a href="https://bestcredit.cards/credit-card-interest-margin"><img src="https://bestcredit.cards/credit-card-interest-margin/chart.png" width="1200" height="630" alt="Credit card interest margin: the average card APR minus the prime rate and the Fed funds rate, November 1994 to August 2026"></a>
<p>Source: <a href="https://bestcredit.cards/credit-card-interest-margin">BestCreditCards</a>, from Federal Reserve data.</p>

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