BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

Report to the Congress on the Profitability of Credit 

Card Operations of Depository Institutions 

Submitted to the Congress pursuant to section 8 of the Fair Credit and Charge Card Disclosure Act 

of 1988 

June 2011
Section 8 of the Fair Credit and Charge Card Disclosure Act of 1988 directs the Federal 

Reserve Board to transmit annually to the Congress a report about the profitability of credit card 

operations of depository institutions.1

 This is the twenty-first report. The analysis here is based 

to a great extent on information from the Consolidated Reports of Condition and Income (Call 

Report) and two Federal Reserve surveys, the Quarterly Report of Credit Card Interest Rates and 

the Survey of Terms of Credit Card Plans. 

Call Report Data

 Every insured commercial bank files a Call Report each quarter with its federal 

supervisory agency. The Call Report provides a comprehensive balance sheet and income 

statement for each bank; however, it does not allocate all expenses or attribute all revenues to 

specific product lines, such as credit cards. Nevertheless, the data may be used to assess the 

profitability of credit card activities by analyzing the earnings of those banks established 

primarily to issue and service credit card accounts. These specialized or mono-lined banks are 

referred to here as "credit card banks." 

For purposes of this report, credit card banks are defined by two criteria: (1) the bulk of 

their assets are loans to individuals (consumer lending), and (2) 90 percent or more of their 

consumer lending involves credit cards or related plans. Given this definition, it can reasonably 

be assumed that the profitability of these banks primarily reflects returns from their credit card 

operations. 

The first credit card banks were chartered in the early 1980s; few were in operation prior 

to the mid-1980s. To provide a more reliable picture of the year-to-year changes in the 

profitability of the credit card operations of card issuers, this report limits its focus to credit card 

banks having at least $200 million in assets. Most of these institutions have been in continuous 

operation for several years, particularly those with assets exceeding $1 billion, and are well 

beyond the initial phase of their operations. 

As of December 31, 2010, 15 banks with assets exceeding $200 million met the 

definition of a credit card bank. At that time, these banks accounted for approximately 76

percent of outstanding credit card balances on the books of commercial banks or in pools 

underlying securities backed by credit card balances. Taken as a group, the average credit card 

related assets (both on- and off-balance sheet) for the 15 credit card banks over the course of 

2010 was down about 3 percent from 2009. 

 In 2010, credit card banks with assets in excess of $200 million reported net earnings 

before taxes and extraordinary items of 2.36 percent of outstanding balances adjusted for credit 

card-backed securitization (Table 1).2

 This positive return is a substantial rebound in earnings 

from 2009 when credit card banks as a group experienced negative net earnings for the first time 

since this report series was initiated in 1986. However, the large negative return in 2009 (-3.01 

 

1. P.L. 100-583, 102 Stat. 2960 (1988). The 2000 report covering 1999 data was not prepared as a consequence of the 

Federal Reports Elimination and Sunset Act. The report was subsequently reinstated by law. 2. Calculations are adjusted for credit card backed securitizations because earnings as reported on the Call Report 

reflect revenues and expenses from outstandings both on the books of the institutions and in off-balance-sheet pools 

backing securities. 
percent) was primarily due to a substantial downward adjustment of goodwill by one card issuer 

– excluding that adjustment, profitability would have been -0.46 percent.3

 Although a marked 

improvement from reported 2009 earnings, the 2010 rate of return is below the average rate of 

return of 2.86 percent since 1986, and well below the profitability levels reached in the years 

leading up to the Great Recession. 

 A factor that complicates a comparison of the profitability of credit card activities in 

2010 with previous years is a change in accounting standards. In June 2009, the Financial 

Accounting Standards Board (FASB) issued two new Statement of Financial Accounting 

Standards (FAS No. 166 and FAS No.167) that affect how the Call Reports reflect credit card 

activities.4 

 

FAS 166 and 167 resulted in banking institutions bringing onto their balance sheets 

outstanding balances, including those originated under credit card agreements, that were 

previously held in securitization trusts and other special purpose entities. This consolidation of 

off-balance sheet and on-balance sheet items significantly affected aggregate balance sheet, and 

selected income and expense categories shown in the Call Reports. As a consequence, it is 

difficult to compare the income and expense categories in the 2009 and 2010 Call Reports to 

identify the specific sources of changes in profitability. 

Earnings for credit card issuers in 2010, although somewhat weak by historic standards, 

reflect, in part, improvement in credit quality. Delinquency rates on credit cards increased from 

nearly 4 percent at the beginning of 2007, to a peak of 6.8 percent in mid-2009 before falling 

back to about 4.2 percent at the end of 2010.5 Charge-offs increased sharply in 2009 and in the 

first portion of 2010 in response to mounting delinquencies and defaults, but receded sharply in 

the second half of 2010.6

 Earnings also were boosted by wider spreads between issuers’ costs of 

funds and the rates charged to credit card borrowers. 

 

 

3. Bank of America Corporation (BOA), owner of FIA Card Services, (one of the credit card banks considered for 

this report) announced it had amended previously filed Call Reports for FIA Services for 2009 and 2010 to reflect a 

non-cash, non-tax-deductable charge related to a $20.3 billion goodwill impairment. The restatement of the 2009 

Call Report has the effect of reducing the profitability of FIA Services as reflected in the 2009 Call Reports, and 

consequently reducing the aggregate profitability of the credit card banks followed for this report. 4. Refer to www.fasb.org/home 5. Refer to Federal Reserve Statistical Release, “Charge-Off and Delinquency Rates on Loans and Leases at 

Commercial Banks,” www.federalreserve.gov/releases/chargeoff/delallsa.htm 5. Refer to Federal Reserve Statistical Release, “Charge-Off and Delinquency Rates on Loans and Leases at 

Commercial Banks,” www.federalreserve.gov/releases/chargeoff/chgallsa.htm 6. Refer to www.federalreserve.gov/releases/chargeoff/chgallsa.htm 
Table 1. Return on assets, large U.S. credit card banks, 1986–2010 

(Percent)

Year Return Year Return

1986 3.45 1998 2.87

1987 3.33 1999 3.34

1988 2.78 2000 3.14

1989 2.83 2001 3.24

1990 3.10 2002 3.28

1991 2.57 2003 3.66

1992 3.13 2004 3.55

1993 4.06 2005 2.85

1994 3.98 2006 3.34

1995 2.71 2007 2.75

1996 2.14 2008 1.43

1997 2.13 2009 -3.01

 2010 2.36

NOTE: Credit card banks are commercial banks with average managed assets (loans to 

individuals including securitizations) greater than or equal to 200 million dollars with 

minimum 50 percent of assets in consumer lending and 90 percent of consumer lending 

in the form of revolving credit. Profitability of credit card banks is measured as net pretax income as a percentage of average quarterly outstanding balances. The reported 

return for 2009 is revised from the 2010 report to reflect a restatement of goodwill that 

took place in 2010 but affected Call Report items in 2009 (refer to footnote 4 in the 

text). 

SOURCE: Reports of Condition and Income, 1986-2010. 
Although profitability for the large credit card banks has risen and fallen over the years, 

credit card earnings have been almost always higher than returns on all commercial bank 

activities.7

 Earnings patterns for 2010 were consistent with historical experience: For all 

commercial banks, the average return on all assets, before taxes and extraordinary items was 

0.95 percent in 2010 compared to 2.36 percent for the large credit card banks.8

One difficulty that arises in assessing changes in the profitability of credit card activities 

over time is that the sample of credit card banks changes somewhat from one year to the next 

primarily because of mergers and acquisitions. Thus, overall changes in profit rates from year to 

year reflect both real changes in activity and changes in the sample. To evaluate the effects of 

sample changes, the profitability of the specific banks included in the sample each year was also 

examined for the prior year. For 2010, the level of reported profitability for the constant panel of 

banks is the same as that shown in Table 1. 

General Discussion 

 Thousands of firms offer bank cards to consumers and consumers use their cards 

extensively.9 The Federal Reserve’s G.19 Consumer Credit report indicates that consumers 

carried a total of about $800 billion in outstanding balances on their revolving accounts as of the 

end of 2010, down about 8 percent from 2009.10 The decline in outstanding balances from 2009 

to 2010 comes on top of a fall from the preceding year as well, and reflects the lingering effects 

of the financial crisis that emerged in 2008 and the ensuing recession that saw consumers reduce 

spending and card issuers tighten credit availability. 

 

 Based on credit record data, it is estimated that in 2010 credit card borrowing accounted 

for about 6 percent of all outstanding household debt.11 The amount of available credit under 

outstanding credit card lines far exceeds the aggregate of balances owed on such accounts. 

Credit record data indicate that as of the end of 2010 individuals were only using about onequarter of the total dollar amount available on their lines under revolving credit card plans. 

 

7. This report focuses on the profitability of large credit card banks, although many other banks engage in credit card 

lending without specializing in this activity. The profitability of the credit card activities of these other banks is 

difficult to discern. The cost structures, pricing behavior and cardholder profiles, and consequently the profitability 

of these diversified institutions may differ from that of the large, specialized card issuers considered in this report. 

 In earlier annual reports on credit card profitability, information from the Federal Reserve=s Functional Cost 

Analysis (FCA) Program was used to measure the profitability of the credit card activities of smaller credit card 

issuers. These data tended to show credit card activities were less profitable for smaller issuers than for larger ones. 

 The FCA program was discontinued in the year 2000. For further discussion, see Glenn B. Canner and Charles A. 

Luckett, ADevelopments in the Pricing of Credit Card Services,@ Federal Reserve Bulletin, vol. 78, no. 9 (September 

1992), pp. 652-666. 

8. Returns for all commercial banks are derived from the Reports of Condition and Income. 

9. Currently, over 5,000 depository institutions including commercial banks, credit unions and savings institutions, 

issue VISA and MasterCard credit cards and independently set the terms and conditions on their plans. Many 

thousands of other institutions act as agents for card-issuing institutions. In addition to the firms issuing cards 

through the VISA and MasterCard networks, two other large firms, American Express Co. and Discover Financial 

Services, issue independent general purpose credit cards to the public. 

10. Refer to www.federalreserve.gov/releases/g19/Current. 11. Refer to the Quarterly Report on Household Debt and Credit, available at www.newyorkfed.org/index.html 
 Consumers use their cards for purposes of borrowing and because they serve as a 

convenient payment device and standby line of credit for unforeseen expenses. As a source of 

credit, credit card loans have substituted for borrowing that previously might have taken place 

using other loan products, such as closed-end installment loans and personal lines of credit. As a 

convenient payment device, a portion of the outstanding balances reflects primarily 

“convenience use”, that is, balances consumers intend to repay within the standard interest-rate 

grace period offered by most card issuers. 

 

 Prior to the early 1990s, card issuers competed primarily by waiving annual fees and 

providing credit card program enhancements such as airline mileage programs or other travelrelated benefits. Since then interest rate competition has played a more prominent role, although 

for some market segments enhancements, including “reward” programs, such as cash-back or 

point features, and temporary interest-free or reduced interest-rate periods for both balance 

transfers and new purchases, are especially important in gaining market acceptance.12 

 Until the recent financial crisis, many credit card issuers, including nearly all of the 

largest issuers, had lowered interest rates on the majority of their accounts below the 18 to 19 

percent levels commonly maintained through most of the 1980s and early 1990s. More 

generally, credit card interest rates have become more responsive to issuers' cost of funds in 

recent years as more issuers have tied the interest rates on their plans directly to one of several 

indexes that move with market rates. Moreover, recent changes in credit card rules that restrict 

the ability of card issuers to change interest rates on outstanding balances create an incentive for 

more issuers to convert from fixed-rate to variable-rate plans. 

 In soliciting new accounts and managing existing account relationships, issuers segment 

their cardholder bases according to risk characteristics, offering more attractive rates to 

customers who have good payment records while imposing relatively high rates on higher-risk or 

late-paying cardholders. Card issuers also closely monitor payment behavior, charge volume 

and account profitability and adjust credit limits accordingly both to allow increased borrowing 

capacity as warranted and to limit credit risk. 

 In the recent economic downturn card issuers have aggressively reviewed interest rates 

and credit limits and have reduced limits on millions of accounts, particularly accounts that were 

inactive or those little used by cardholders.13 Credit record data indicate that over the past two 

years or so credit limits have been cut on accounts held by cardholders across the full range of 

credit scores. Issuers have also closed many dormant or little used accounts as well as accounts 

that have become delinquent.14 Issuers have responded aggressively to the difficult economic 

 

12. Refer to “Credit Cards: Increased Complexity in Rates and Fees Heightens Need for More Effective 

Disclosures to Consumers,” Government Accountability Office, GAO-06-929, April 21, 2006; available 

at www.gao.gov. Also, refer to www.comperemedia.com/press_releases/1099. 13. Information from a nationally representative sample of credit records found that about half of the 

bankcard holders that had at least one bankcard at the end of 2007 experienced a reduction in the 

aggregate limit available on their combined bankcards by end of 2010. This estimate includes those that 

had at least one bankcard account closed which everything else the same would result in a lower 

aggregate limit. Estimate based on the FRBNY Consumer Credit Panel, refer to 

www.newyorkfed.org/index.html 14. One estimate indicates that the number of MasterCard and VISA credit card accounts fell more than 11 

percent from 2009 to 2010. Refer to the Nilson Report, Issue 965, February 2011. 
environment because inactive or little used accounts pose considerable risk of loss while offering 

little potential for profit as cardholders can draw on these accounts if they encounter financial 

distress. Trends in credit card pricing are discussed in more detail below. 

The U.S. general purpose bank credit card market is dominated by VISA and MasterCard 

labeled cards that combined accounted for an estimated 409 million cards in 2010, down roughly 

14 percent from about 473 million in 2009.15 In addition, American Express and Discover Card 

Services provided another 105 million general purpose cards to consumers in 2010, up about 2

percent from 2009. The combined total of charge volume and cash advances using credit cards 

increased nearly 4 percent from the 2009 level but the total volume was still down about 10 

percent from the $2.174 trillion level reached in 2008. 

 Direct mail solicitations continue to be an important channel used for new account 

acquisition and account retention. After reaching an all-time high in 2005 of 6.05 billion direct 

mail solicitations, mailings fell sharply as the Great Recession emerged. Mail solicitations fell to 

only 3.8 billion in 2008.16 The effects of the weak economic environment led to a further decline 

in solicitations in 2009 as card issuers sent only about 1.8 billion mailings during the year. 

Industry data indicate however that the retrenchment in mailings began to reverse starting in the 

third quarter of 2009 as prospects for economic recovery improved. Industry data on mail 

solicitations showed a nearly 50 percent increase from the third to the fourth quarter of 2009 and 

an increase of some 136 percent from the 4th quarter of 2009 to the fourth quarter of 2010.17 

Overall, there were nearly 4.5 billion mail solicitations sent out in 2010, up about 150 percent 

from the 2009 level.

Recent Trends in Credit Card Pricing

Aside from questions about the profitability of credit card operations, considerable 

attention has been focused on credit card pricing and how it has changed in recent years. 

Analysis of the trends in credit card pricing in this report focuses on credit card interest rates 

because they are the most important component of the pricing of credit card services. Credit 

card pricing, however, involves other elements, including annual fees, fees for cash advances 

and balance transfers, rebates, minimum finance charges, over-the-limit fees, and late payment 

charges.18 In addition, the length of the "interest-free" grace period, if any, can have an 

 

15. Figures cited in this sentence and the remainder of the paragraph are from The Nilson Report, February 2011 issue 

942. 

16. Source: Data from Mintel Comperemdia. Refer to www.comperemedia.com 17. Refer to “Q4 2009 U. S. Consumer Acquisition Credit Card Overview”, report prepared by Mintel International 

Group, www.comperemedia.com. A sharp expansion in mailings from the third to the fourth quarter of 2009 was 

also reported by Synovate Mail Monitor February 2010. Refer to “Credit Card Offers Make a Comeback to U.S. 

Households,” http://mailmonitor.synovate.com/news.asp 18. In June 1996, the Supreme Court ruled that states may not regulate the fees charged by out-of-state credit card 

issuers. States have not been permitted to regulate the interest rates out-of-state banks charge. In making its decision, 

the Court supported the position previously adopted by the Comptroller of the Currency that a wide variety of bank 

charges, such as late fees, membership fees, and over-the-limit fees, are to be considered interest payments for this 

purpose. This ruling will likely ensure that banks will continue to price credit cards in multidimensional ways rather 

than pricing exclusively through interest rates. Source: Valerie Block, ASupreme Court Upholds Nationwide Card 

Charges,@ American Banker, June 4, 1996. 

An assessment of the fees charged by credit card issuers is provided in “Credit Cards: Increased complexity in Rates 
important influence on the amount of interest consumers pay when they use credit cards to 

generate revolving credit. 

Over the past several years, pricing practices in the credit card market have changed 

significantly. Today card issuers offer a broad range of card plans with differing rates depending 

on credit risk and consumer usage patterns. Moreover, issuers have moved to variable-rate 

pricing that ties movements in their interest rates to a specified index such as the prime rate. 

As noted, risk-based pricing has become a central element of most credit card plan 

pricing regimes and the current downturn and new credit card rules spurred changes in pricing in 

2009 and 2010. In most plans, an issuer establishes a rate of interest for customers of a given 

risk profile; if the consumer borrows and pays within the terms of the plan, that rate applies. If 

the borrower fails to meet the plan requirements, for example, the borrower pays late or goes 

over their credit limit, the issuer may reprice the account reflecting the higher credit risk 

revealed by the new behavior. Regulations that became effective in February 2010 limit the 

ability of card issuers to reprice outstanding balances for cardholders that have not fallen at least 

60 days behind on the payments on their accounts. Issuers may, however, reprice outstanding 

balances if they were extended under a variable-rate plan and the underlying index used to 

establish the rate of interest (such as the prime rate) changes. The new rules continue to provide 

issuers with considerable pricing flexibility regarding new balances.

At present, the Federal Reserve collects information on credit card pricing through two 

surveys of credit card issuers. Because of the significant changes in the pricing of credit card 

services, the Federal Reserve initiated the Quarterly Report of Credit Card Interest Rates

(FR 2835a) at the end of 1994. This survey collects information from a sample of credit card 

issuers on (1) the average nominal interest rate and (2) the average computed interest rate. The 

former is the simple average interest rate posted across all accounts; the latter is the average 

interest rate paid by those cardholders that incur finance charges. These two measures can differ 

because some cardholders are convenience users who pay off their balances during the 

interest-free grace period and therefore do not typically incur finance charges. Together, these 

two interest rate series provide a measure of credit card pricing. The data are made available to 

the public each quarter in the Federal Reserve Statistical Release G.19 Consumer Credit. The 

Federal Reserve also collects detailed information on the pricing features of the largest credit 

card plan of a sample of issuers through the Survey of Terms of Credit Card Plans (FR 2572).19

Because information from the FR 2835a survey does not have an extended historical 

interest rate series for comparison purposes, this report also presents data from the survey that 

preceded and was replaced by the FR 2835a, the Federal Reserve's Quarterly Report of Interest 

Rates on Selected Direct Consumer Installment Loans (FR 2835). Data from the FR 2835 

indicate that credit card interest rates fell sharply from mid-1991 through early 1994 after being 

relatively stable for most of the previous twenty years, and fell again over the 1998-2003 period 

 

and Fees Heightens Need for More Effective Disclosures to Consumers,” U.S. Government Accountability Office, 

Report 06-929, September 12, 2006. Refer to www.gao.gov 

19. The information in the FR 2572 survey is published twice a year by the Federal Reserve. Historically, the data 

were made available in a statistical release, the E.5 AReport of the Terms of Credit Card Plans.@ Beginning in 1995, 

the E.5 statistical release was discontinued and data are now available exclusively on the Board=s web site at 

www.federalreserve.gov/creditcard/survey.html 
(Table 2).20 Since early 1998, credit card interest rates have fluctuated between 12.78 and 15.85 

percent. 

It is important to note that while average rates paid by consumers have moved in a 

relatively narrow band over the past several years, interest rates charged vary considerably 

across credit card plans and borrowers reflecting the various features of the plans and the risk 

profile of the card holders served. For 2010, credit card interest rates averaged 14.26 percent for 

those incurring finance charges, virtually unchanged (down only 5 basis points) from the 2009 

average.21 It is important to note that as the recession emerged, spreads between issuers’ cost of 

funds and prices charged on credit cards widened substantially, and remained at elevated levels 

throughout 2010. Thus, even though nominal rates on accounts incurring interest charges 

remained roughly unchanged from 2009 to 2010, the historically wide spreads suggest interest 

rates on credit card accounts might have fallen in a different economic and regulatory 

environment. 

Additional evidence on changes in credit card interest rates comes from the FR 2572. 

Although not precisely comparable from period-to-period because of changes in the sample of 

reporters, this statistical series reveals a general decline in credit card interest rates in recent 

years. For example, only 11 percent of the respondents reported interest rates below 16 percent 

on their largest credit card plan as of September 1991, but 80 percent did so as of January 2011 

(the most recent report available). In addition, the proportion of card issuers reporting that they 

utilize variable-rate pricing has also increased substantially since September 1991. As of 

September 1991, 23 percent of issuers used variable-rate pricing; as of January 2011, the 

proportion was 69 percent. 

Recent Regulatory and Legislative Actions 

Credit card related lending has been the focus of regulatory and legislative activity. The 

new rules affect a variety of business practices and have affected the pricing, marketing and 

underwriting of credit cards and ultimately their use by consumers. 

 On December 18, 2008 the Federal Reserve Board approved regulatory changes to 

protect credit card users by prohibiting certain unfair acts or practices and improving the 

disclosures consumers receive in connection with credit card accounts and other revolving credit 

plans.22 The rules prohibiting certain credit card practices were adopted under the Federal Trade 

Commission Act, and were issued concurrently with substantially similar rules by the Office of 

Thrift Supervision and the National Credit Union Administration. The Federal Reserve Board 

also adopted rules to revise the disclosures consumers receive in connection with credit card 

accounts and other revolving credit plans to ensure that information is provided in a timely 

manner and in a form that is readily understandable. These rules amended Regulation Z (Truth in 

Lending). The final rules under Regulation Z require changes to the format, timing, and content 

requirements for credit card applications and solicitations and for the disclosures that consumers 

receive throughout the life of an open-end account. 

 

20. For a comprehensive discussion of the factors that account for the levels and changes in credit card interest rates, 

see Glenn B. Canner and Charles A. Luckett, ADevelopments in the Pricing of Credit Card Services@; also U.S. 

General Accountability Office, U.S. Credit Card Industry (GAO/GGD-94-23, 1994). 21. It should be emphasized that the interest rates reported after August 1994 are based on the new survey and are not 

strictly comparable to the interest rates reported on the older survey. 

22. Refer to www.federalreserve.gov/newsevents/press/bcreg/20081218a.htm 
On May 22, 2009 the “Credit Card Accountability Responsibility and Disclosure Act of 

2009” (referred to here as the Card Act) was enacted by the Congress to establish new 

protections for credit card users by prohibiting or limiting certain acts or practices and improving 

the disclosures consumers receive in connection with credit card accounts and other revolving 

credit plans. The legislation mirrors in many respects the Federal Reserve’s recent changes to 

credit card rules but goes further in a number of areas. Among its many provisions, the Card Act 

ensures advanced notification of changes in key credit terms and establishes rules regarding 

repricing of outstanding balances; requires allocation of payments above the minimum to 

balances that are assessed the highest interest rate first; limits the imposition of certain fees; 

establishes rules for cardholders to “opt-in” if they wish to have their issuer allow a transaction 

to be paid if the payment exceeds their credit limit; requires disclosure of the consequences of 

only making required payments; places limitations on extending credit cards to those under the 

age of 21; establishes a requirement that issuers must consider the consumer’s ability to make 

the required payments under the terms of a credit card plan before issuing a card or increasing a 

credit limit; and restricts fees on so-called “subprime” credit cards. 

 Rules regarding advanced notice and the amount of time a cardholder has to make 

payments took effect in August 2009. Most of the other rules that implement the provisions of 

the Card Act took effect on February 22, 2010. 23 Additional rules, including provisions that 

ensure that so-called “penalty” fees (fees for late payments and for exceeding credit limits) are 

reasonable and proportional, took effect on August 22, 2010.24 Under the new penalty pricing 

rules, a credit card issuer cannot charge more than $25 unless one of the cardholders last six 

payments was late, in which case the fee can be as high as $35, or the card issuer can 

demonstrate that the costs they incurred as a result of the late payment justify a higher fee. 

 

 Assessing the extent to which changes in credit pricing or credit availability are due to 

changes in either the economic environment or regulatory framework is beyond the scope of this 

report, but is a focus of a forthcoming report to the Congress by the Consumer Financial 

Protection Bureau due in August 2012. 

 

23. Refer to www.federalreserve.gov/consumerinfo/wyntk_creditcardrules2.htm 24. Refer to www.federalreserve.gov/consumerinfo/wyntk_creditcardrules2.htm 
Table 2. Average most common interest rate on credit card plans, 1974–August 1994, and the interest rate 

assessed on accounts incurring interest charges, November 1994–2010 

(Percent) 

Year Interest rate Year Quarter Interest rate 

1974 17.20 2000 February 14.32 

1975 17.16 May 14.74 

1976 17.05 August 15.35 

1977 16.88 November 15.23 

1978 17.03 

1979 17.03 2001 February 14.61 

1980 17.31 May 14.63 

1981 17.78 August 14.64 

1982 18.51 November 13.88 

1983 18.78 

1984 18.77 2002 February 12.98 

1985 18.69 May 13.34 

1986 18.26 August 13.26 

1987 17.92 November 12.78 

1988 17.78 

1989 18.02 2003 February 12.85 

1990 18.17 May 12.82 

1991 18.23 August 13.11 

1992 17.78 November 12.91 

1993 16.83 

1994 15.77 2004 February 12.41 

1995 15.79 May 12.93 

1996 15.50 August 13.60 

1997 15.57 November 13.92 

1998 15.59 

1999 14.81 2005 February 14.13 

2000 14.91 May 14.81 

2001 14.44 August 14.75 

2002 13.09 November 14.48 

2003 12.92 

2004 13.21 2006 February 14.38 

2005 14.54 May 14.77 

2006 14.73 August 14.67 

2007 14.68 November 15.09 

2008 13.57 

2009 14.31 2007 February 14.64 

2010 14.26 May 14.47 

 August 15.24 

 November 14.35 

 2008 February 13.77 

 May 13.51 

 August 13.64 

 November 13.36 

 

 2009 February 13.54 

 May 14.43 

 August 14.90 

 November 14.37 

 

 2010 February 14.67 

 May 14.48 

 August 14.22 

 November 13.67 

Note: Prior to November 1994 interest rates were those reported in the Quarterly Report of Interest Rates on Selected Direct 

Installment Loans. Beginning in November 1994 interest rates are those reported on the Quarterly Report of Credit Card Interest

Rates for those credit card holders incurring interest charges. 

Source: Board of Governors of the Federal Reserve System.