If you carry a balance, the cost of that debt is getting more expensive by the month.
The average credit card APR has climbed above 21%, and for retail store cards and subprime borrowers, rates in the high 20s and even low 30s are now common.
That's the steepest borrowing cost consumers have faced in roughly a decade and a half.
The Federal Reserve's rate hikes are the main driver, but there's a wrinkle most people miss: card APRs are tied to the prime rate, which moves almost immediately when the Fed acts.
Mortgages and auto loans take months to reset.
It can jump within one or two billing cycles.
On a $5,000 balance at 21% APR, you're paying about $1,050 in interest over a year if you don't touch the principal.
At the 15% rates common in 2021, that same balance cost roughly $750.
The difference is real money — enough to cover a month of groceries for a family of four.
Making only minimum payments is where things get ugly.
A $5,000 balance paid at the typical 2% minimum could take well over a decade to clear and cost thousands in interest beyond the original balance.
The minimum payment is designed to keep the account open, not to get you out of debt.
If your credit score has improved since you opened the card, call the issuer and ask for a lower APR — it works more often than people expect.
Balance transfer cards offering 0% for 12 to 21 months can help, but watch the 3% to 5% transfer fee and have a payoff plan before the promo ends.
A fixed-rate personal loan can also consolidate card debt at a lower rate, though you're trading revolving debt for installment debt.
A few moves that don't require a phone call: pay more than the minimum whenever possible, target the highest-APR balance first, and set up autopay so a missed due date never triggers a penalty APR — which can spike to nearly 30%.
Also check whether your card issuer has a hardship program if you're struggling; some will lower your rate temporarily.
When card APRs run this high, carrying a balance gets punished hard while paying in full stays free.
If you can swing it, treating the card like cash rather than a loan is the single best defense against these rates. **Our take:** High APRs are painful, but they're also a nudge to treat credit card debt as an emergency rather than a background expense.
Final Thoughts
A 15-minute call to your issuer and a concrete payoff timeline can save hundreds of dollars a year — no financial advisor required.