Question

In the United States, a typical credit card interest rate ranges from ______________ per year.

.2% to .8%


2% to 8%


12% to 18%


22% to 28%

Answer 1

In the United States, a typical credit card interest rate ranges from 12% to 18% per year. Americans had around $807 billion in credit card debt in 2021, with an average annual interest rate of 15%, leading to tens of billions of dollars paid in interest every year.

Step-by-step explanation:

In the United States, a typical credit card interest rate ranges from 12% to 18% per year.

Credit cards serve as a means for consumers to borrow money from the card's issuer, with the expectation to pay back the borrowed amount plus any accrued interest. While some periods of borrowing may incur no interest, the long-term rates can be substantial.

For example, in 2021, Americans collectively had an estimated $807 billion in outstanding credit card debt, with an average interest rate of about 15% per year.

This debt generates tens of billions of dollars in interest annually, aside from other potential fees like basic usage fees or charges for late payments. It's important for consumers to consider these interest rates when managing personal finances, as they can significantly affect the total debt owed over time.