Credit card companies are not advertising 87.3% APR because the economy is thriving. That number doesn’t appear during expansion. It shows up when the cycle is aging and lenders are shifting from growth to extraction. July 2025 data from the Federal Reserve puts revolving consumer credit at 1.38 trillion dollars. That is a 6.4% increase over the past year. Credit card delinquencies have reached 3.1%, the highest since 2009. These are not isolated numbers. They are systemic.
At what stage of an economic cycle do we usually see credit card companies advertising a ski high 87.3% APR (the total cost of borrowing money on a credit card over a year)? 🤔 pic.twitter.com/nKXDhRsWv6
— JustDario 🏊♂️ (@DarioCpx) July 12, 2025
The 87.3% APR is not a teaser. It is the full freight cost once compounding, penalty interest, late fees, and cash advance charges are baked in. These ads are aimed at subprime borrowers with credit scores under 600. The nominal APR might start at 29.99%, but once the fine print kicks in, the real cost balloons. This is not lending. It is monetizing distress.
Massachusetts GDP growth is projected at 1.5% for 2025, down from 2.7% in 2024. Unemployment has ticked up to 4.0%. Labor force participation is slipping. These are late-cycle indicators. Credit is tightening. Lenders are adapting by charging more and offering less.
The average APR across all credit cards in July 2025 is 22.6%. Subprime cards are pushing past 30. Miss a payment and penalty APRs trigger rates north of 80. That is not a margin call. That is a revenue model.
Borrowing costs at this level reflect systemic pressure. The economy is not expanding. It is bracing. And lenders are bracing with it.