Credit card interest rates dropped in 2025, ending the year at 19.7%, down from the record high in 2024. Bankrate predicts a minor decrease in 2026, with an average of 19.4%. About 23% of Americans with credit card debt believe they will never get out of it, as the rates remain high.

The rate forecast for 2026 is uncertain, depending on the next Fed Chairman and economic factors. Bankrate expects three quarter-point rate cuts this year to stimulate the economy. The unemployment rate is projected to rise slightly, with recent layoffs contributing to a four-year high in unemployment.

Credit card rates may not drop as much as the federal funds rate. Most credit cards have variable rates tied to the federal funds rate, affecting existing cardholders. New customer offers may have higher rates to boost profits, impacting the average rate.

The average credit card rate dropped to 19.8% in 2025, as forecasted by Bankrate. Issuers may lower rates for higher credit scores but keep rates steady or increase them for lower scores. Relying on rate cuts to reduce debt is not effective, with minimal changes in monthly payments.

Instead of waiting for rate decreases, focus on paying off credit card debt sustainably. Consider a 0% APR card for balance transfers to pause interest charges. Cutting expenses, taking on side hustles, or working with credit counselors can help manage debt effectively.

It is essential to pay attention to interest rates when getting a new credit card, especially if carrying a balance. Retail cards often have higher APRs around 30%, leading to problematic debt if not paid off monthly. Personal financial strategies are more crucial than relying on interest rate changes.

Read more at Yahoo Finance: Rate cuts will bring little relief to cardholders