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Rate survey: Credit card interest rates remain unchanged for the second straight week

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Interest rates on new credit card offers held steady for the second 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: April 25, 2012

The national average annual percentage rate (APR ) on new credit card offers remained unchanged at 14.91 percent Wednesday. This is the ninth week out of 17 in 2012 that interest rates haven't budged.

This year's stability in rates follows a noteworthy trend that began in 2011 when rates remained unchanged for 25 weeks out of 52. Compare that to previous, more volatile years when average rates changed much more frequently. For example:   

  • In 2010, rates remained unchanged for just 11 weeks out of 52.
  • In 2009, rates held steady for 10 weeks out of 53.
  • In 2008, rates didn't move for just 7 weeks out of 52.

However, despite the new stability, consumers looking for a new card have little reason to celebrate. Average interest rates are still elevated compared to a year ago when the national average APR was just 14.67 percent.

That difference in rates may seem slight. However, even small rate changes can have a real impact on cardholders' pocketbooks. For example, if a cardholder borrows $5,000 on a credit card today at 14.91 percent interest and pays $100 monthly, they will have to pay $2,863 in interest to clear their balance. That's $87 more than they would have paid a year ago when rates were significantly lower. (Calculator: How long will it take to pay off your credit card balance?)

Consumers who are shopping around for a deal on a new credit card are also likely to find the same promotional offers they saw last week, according to CreditCards.com data. That's because Wednesday marks the second straight week that promotional credit card offers remained the same for all 100 of the cards that CreditCards.com tracks. That includes promotional balance transfer offers, introductory purchase rates and annual fees.

This recent lack of movement on credit card promotions is relatively unusual. For example, in the first four of the past six weeks, at least 11 out of 100 cards advertised new promotional balance transfer offers and eight out of 100 cards featured new introductory purchase rates.

The good news is that promotional offers for many cards are still strong. Among the 100 cards that are currently in the CreditCards.com database, 24 cards advertise promotional APRs for 12 months or longer and an equal number feature promotional balance transfer offers for 12 months or more. Meanwhile, five cards feature promotional APRs for 15 months or longer and eight cards feature promotional balance transfers for at least that long.

That said, consumers are seeing fewer credit card offers in the mail, according to the international financial services firm Credit Suisse. Citing data from the market research firm Mintel Comperemedia, researchers at Credit Suisse noted that credit card mailings declined significantly in March compared to the same time last year. However, the overall trends are still positive for card issuers, they said.

"We believe that the operating environment faced by credit card issuers remains one of the most competitive in the history of the business, though it no longer appears to be accelerating," said research analysts Moshe Orenbuch and Meredith Roscoe in a research note issued Monday.

However, despite the fewer offers, card issuers are still aggressively pursuing new cardholders. For example, 0 percent promotional offers continued to make up the bulk of last month's credit card mailings, according to an analysis by Credit Suisse. Seventy-eight percent of the card offers that landed in consumers' mailboxes in March featured a 0 percent promotional APR on new purchases, while 65 percent of offers featured a 0 percent balance transfer offer.

See related: Fed says no to raising interest rates

Published: April 25, 2012


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