Credit Card Interest: The Most Expensive Debt in America
The average credit card APR in the USA reached 21.7% in early 2026 -- the highest in 40 years, per the Federal Reserve. At this rate, a $5,000 balance with minimum payments costs more in interest than the original balance.
Use our [Credit Card Payoff Calculator](/calculators/finance/credit-card-payoff-calculator) to see exactly how long your payoff will take and total interest paid.
The Minimum Payment Trap: Real Numbers
$5,000 balance at 24.9% APR (typical rewards card 2026):
| Payment Strategy | Months to Pay Off | Total Interest | Total Paid |
|---|---|---|---|
| Minimum only (~2% of balance) | 279 months (23 yrs) | $8,191 | $13,191 |
| $100/month fixed | 93 months | $4,181 | $9,181 |
| $150/month fixed | 53 months | $2,934 | $7,934 |
| $200/month fixed | 36 months | $2,108 | $7,108 |
| $500/month fixed | 12 months | $697 | $5,697 |
Paying $500/month saves $7,494 vs minimum payments and finishes 22 years earlier.
Average Credit Card APR by Card Type (2026)
| Card Type | Average APR | Best Current Rate |
|---|---|---|
| Rewards/cashback | 24.37% | 19.99% |
| Travel rewards | 25.04% | 20.49% |
| Store cards | 28.94% | 25.99% |
| Balance transfer (promo) | 0% for 15-21 months | 0% (then 18-29%) |
| Credit union cards | 13-18% | 10.99% |
The Balance Transfer Strategy
A 0% APR balance transfer card can save thousands in interest -- if you pay it off before the promo period ends.
$7,000 balance transferred to 0% APR for 18 months:
- Payment needed to clear in 18 months: $389/month
- Interest saved vs 24.9% card: $2,100+
- Balance transfer fee (3%): $210
Net savings: ~$1,900. Use our [Debt Payoff Calculator](/calculators/finance/debt-payoff-calculator) to model the full payoff plan.
Warning: If you don't pay off during the promo period, the remaining balance gets charged the go-to APR (often 26-29%) retroactively in some cards. Read the fine print carefully.
Debt Consolidation Personal Loan: When It Makes Sense
$10,000 credit card debt at 24.9% -> Personal loan at 12%:
- Old minimum payment: ~$200/month, never-ending
- New personal loan: $292/month for 48 months
- Interest saved: $4,800+
Use our [Personal Loan Calculator](/calculators/finance/personal-loan-calculator) to model consolidation. Works best when your credit score is 680+ to qualify for rates below 15%.