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Rate survey: Credit card interest rates stay put for the 4th straight week

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Interest rates on new credit card offers stayed put for the fourth straight week, according to the CreditCards.com Weekly Credit Card Rate Report.  

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.91%
14.91%
14.99%
Low interest 10.40%
10.40% 10.73%
Balance transfer 12.43%
12.43%
12.77%
Business 12.67%
12.67%
13.13%
Student
13.77%
13.77%
13.77%
Cash back  14.24%
14.24%
14.70%
Airline  14.63%
14.63%
14.44%
Reward 14.70%
14.70%
14.70%
Instant approval 15.49%
15.49%
15.99%
Bad credit 23.64%
23.64%
24.96%
Methodology: The national average credit card APR is comprised of 100 of the most popular credit cards in the country, including cards from dozens of leading U.S. issuers and representing every card category listed above. (Introductory, or teaser, rates are not included in the calculation.)
Source: CreditCards.com
Updated: May 9, 2012

The national average annual percentage rate (APR ) on new credit card offers remained fixed at 14.91 percent Wednesday. This is the 11th time this year that average interest rates haven't budged.

This is also just the second time in four years that the national average has remained unchanged for a month or longer. The last time average interest rates remained unchanged for this long was in March 2011 when average rates held steady for five straight weeks. Prior to 2011, rates tended to either move up or down most weeks as banks tested new card offers more frequently.

Credit card issuers left the promotional offer terms on new cards unchanged as well. According to CreditCards.com data, promotional APRs, balance transfer offers and annual fees have remained the same for all 100 cards in the CreditCards.com database since mid-April.  

Rates unchanged, but still hovering near record-highs
This year's stability in average rates is a welcome change for new cardholders who have seen average interest rates rise by more than 3 percentage points since 2008. The national average APR has only risen twice this year and it hasn't risen by more than a 10th of a percentage point in more than 10 months.

Despite the smaller number of rate spikes, however, average APRs have hovered near record highs since December. To get a sense of just how far average rates have climbed since the depths of the recession, consider this. A cardholder borrows $5,000 on a credit card today and pays $100 monthly at 14.91 percent interest will have to pay $2,863 in interest to clear the balance. That's $1,011 more than the cost four years ago when the national average APR was just 11.55 percent. (Calculator: How long will it take to pay off your credit card balance?)    

The good news is that despite the higher rates, many of today's cards feature long-term 0 percent promotional deals and most of these cards don't carry an annual fee. For example, among the 100 cards that CreditCards.com tracks:

  • 22 cards feature a 0 percent promotional APR for 12 months or more. Twenty-one of these don't carry an annual fee.
  • 8 cards advertise a 0 percent APR for 15 months or longer. None of them have an annual fee.
  • 22 cards offer a 0 percent balance transfer deal for 12 months or more. Just one carries an annual fee.
  • 11 cards feature a 0 percent balance transfer offer for 15 months or more. Ten don't have an annual fee.

Before the Credit CARD Act of 2009 was passed, analysts predicted that annual fees would become ubiquitous once the bill became law. That dire prediction hasn't come true, according to CreditCards.com data. Among the 100 credit cards in our national average database, just 26 cards currently have an annual fee, ranging in size from $19 to $495. The average annual fee amount is approximately $80. The median annual fee amount is $60. Most cards that come with an annual fee are either secured cards or travel rewards credit cards.

See related: Consumer credit card balances shoot up

Published: May 9, 2012


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