ADVERTISEMENT

Rate survey: Credit card APRs unchanged this week

By Kate Tomasino

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.83% 14.83%
14.74%
Low interest 10.73%
10.73% 11.87%
Balance transfer 12.76%
12.76%
12.80%
Business 13.07%
13.07%
12.91%
Student
13.77%
13.77%
14.49%
Cash back  13.87%
13.87%
12.59%
Airline 14.24%
14.24%
14.45%
Reward  14.40%
14.40%
14.39%
Instant approval 15.99%
15.99%
15.99%
Bad credit 24.96%
24.96%
24.64%
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: June 1, 2011

The average annual percentage rate (APR) on new credit card offers was unchanged this week, staying fixed at 14.83 percent. 

This doesn't mean issuers aren't still testing and tweaking offers, though. Discover lowered the top end of its APR range on their Miles by Discover card this week. However, as cardholders get ready for their summer vacations, the truth is that credit card interest rates are substantially higher than they were last summer -- thanks at least in part to hikes in bad-credit credit card APRs.

The change to the Miles card -- which is not a bad-credit credit card -- was the only APR change we noted this week. The top end of the APR range on the card was 10.99 percent to 15.99 percent, down from 10.99 percent to 16.99 percent. The change had no impact on the national APR average, since only the low ends of ranges are used in the calculation.

When asked to comment, Discover declined.

The overall national average was 14.23 percent during the first week of June 2010 and is 14.83 percent now; the rewards cards average has risen just from 14.34 percent to 14.40 percent.

Bad-credit credit cards have been a major factor in the national average's increase. The category's average has shot from about 19.75 percent in June 2010 to 24.96 in June 2011. In October 2010, First Premier -- a bank that issues cards that are marketed to subprime consumers, who have thin or poor credit and might not qualify for better terms -- began charging a flat 59.9 percent APR for all new Centennial Classic credit cards. That card previously offered both a 23.9 percent and 59.9 percent rate to its new cardholders. Dropping the 23.9 percent APR in favor of a fixed rate of 59.9 percent sent the national APR soaring. 

First Premier and other subprime issuers have been hit hard by the Credit CARD Act, which outlawed many fees and practices associated with bad-credit credit cards. For example, under the CARD Act, fees charged during the first year an account is open cannot total more than 25 percent of the card's credit limit. 

Since the law was enacted, First Premier has experimented with several rate changes, attempting to make up the loss of profits caused by the CARD Act's restrictions. They've apparently met with little success. Premier Bankcard -- the company that markets the First Premier cards -- recently laid off hundreds of employees. In a press release, Premier CEO Miles Beacom said the moves were "the direct result of our inability to price based on risk under the new regulations."

Meanwhile, other recent credit-related developments offer good news for consumers. Credit card charge-offs -- or credit card account balances written off by banks as uncollectible -- have decreased and are expected to keep decreasing, according to the latest survey by financial ratings agency Moody's.

Charge-off rates declined in April to 7.16 percent from 7.56 percent in February. As the cost of goods and services decline and employment slowly increases, Moody's said in its survey, cardholders may be in a better position to repay their outstanding credit card balances.

See related: An interactive guide to the Credit CARD Act

Published: June 1, 2011


Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.




Follow Us


Updated: 09-24-2016


Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.


ADVERTISEMENT