Rate survey: Credit card APRs unchanged for 2nd straight week
By Kate Tomasino | Published: June 8, 2011
|CreditCards.com's Weekly Rate Report|
|Avg. APR||Last week||6 months ago|
|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.)|
|Updated: June 8, 2011|
Interest rates on new credit card offers remained unchanged for the second straight week, according to the CreditCards.com Weekly Credit Card Rate Report.
The average credit card annual percentage rate (APR) stayed at 14.83 percent, just below the record high of 14.85 percent set in mid-May. No APR changes were seen in the CreditCards.com card database this week.
Throughout most of the year, the national average has been static, moving only 10 times in nearly six months. That's a marked change from last year, when rates moved repeatedly in the wake of the then-newly enacted Credit CARD Act of 2009.
"The CARD Act pushed issuers to provide credit only to the most creditworthy borrowers while they determined the full implications of the law and changed their business models to conform to it," said Cristian deRitis, economist at Moody's Analytics.
For example, in the first six months of 2010, the national average APR for new card offers shot from 12.87 percent to 14.43 percent. Now that most of the CARD Act's mandates have been realized, APRs have leveled out and have shown minimal fluctuation -- moving only a tenth of a percentage point since January 1.
Meanwhile, the Federal Reserve's G.19 consumer credit report, released Tuesday, showed that Americans' credit card debt fell by more than $1 billion in April, continuing a three-year pattern. Consumer credit card debt increased on a month-to-month basis only twice since September 2008, and Americans have shed more than $183 billion in card debt during that time.
The Fed's report also includes data on credit card APRs, which is gathered quarterly in a survey of banks. The most recent data available is from February 2011. The Fed report looks at credit cards that are currently in use (unlike CreditCards.com's Weekly Rate Report, which looks at new credit card offers) and offers two different data points: an average APR for all credit cards, and one for cards with a revolving balance.
The G.19 report indicates that both averages have fallen significantly since the first quarter of 2010. The overall average fell from 14.3 percent to 13.4 percent, while the average for cards with a balance fell from 14.7 percent to 13.4 percent.
That's a big difference from the trends CreditCards.com has seen with new card offers. Dating back to the end of the first quarter of 2010, our national average has gone from 14.44 percent to 14.83 percent. Most of that growth came in late 2010, however; APRs have largely been steady through 2011.
However, economists don't expect APRs to stay steady for long.
"With the gradual improvement of the economy over the last two years, issuers have seen the volume of charge-offs start to decline and are now looking to grow market share as the economic recovery continues to gather steam," deRitis said. He said that could mean lower introductory APRs for new card applicants. However, he added, an increased willingness to lend to a larger, riskier pool of borrowers -- not just those with perfect credit -- could push APRs higher overall.See related: An interactive guide to the Credit CARD Act, Consumer credit card balances fall in April, 8 things you must know about credit card debt
- New delinquencies rising for credit card users, New York Fed finds – Newly delinquent credit card accounts are accelerating, a "potentially concerning" trend, New York Fed economists said ...
- 2017 Credit Card Fee Survey: Consumers catch a break – Changes to credit card fees have decreased, foreign transaction fees are going away, and the rest can be avoided ...
- Fed: U.S. consumers shatter all-time card debt record – U.S. consumers shattered the all-time record for credit card debt in June, according to the Federal Reserve ...