Rate survey: Credit card APRs reach another record high
|CreditCards.com's Weekly Rate Report
||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: Oct. 12, 2011
Another week, another record for credit card interest rates.
Annual percentage rates (APRs)
on new credit card offers reached 15 percent for the first time in the
four-year history of CreditCards.com's Weekly Rate Report. It's the seventh
straight week in which the national average APR for a new credit card offer has
either topped or equaled a record high, dating back to late August.
Several issuers made APR
changes this week. However, the changes to the national average were spurred by Capital One's recent
revamping of its business card program, which is now called Spark. As a result
of this change, two cards that CreditCards.com tracks -- the Visa Business
Platinum card and the Visa Business Platinum with Preferred No Hassle Miles --
are no longer offered. Those two cards were removed from our database and
replaced with Spark cards that were most
similar to the ones being removed. The APR difference between the new cards and
the old cards forced the national average slightly higher.
Here's what happened:
- The Visa Business
Platinum card (19.9 percent) was replaced with the new Spark Classic card (22.9
percent). Both cards were targeted at businesses with either limited or
less-than-spectacular credit. In fact, on the business card page of Capital One's website, the
Classic is the only Spark card that specifically mentions businesses that
are trying to build credit. (One difference between the two cards: The Classic offers rewards, while the Business Platinum card didn't.) The 3-percentage-point difference between the two
cards' APRs sent the national average higher.
- The Visa Business
Platinum card with Preferred No Hassle Miles (14.9 percent to 22.9 percent) was
replaced with the new Spark Miles Select card (14.9 percent to 19.9 percent).
Since we use the low end of APR ranges in calculating our rates averages, this
swap had no impact on the national average.
Capital One spokeswoman Pam
Girardo says the issuer will roll out an advertising campaign next week that
focuses on the Spark Miles and Spark Cash cards, the two cards the bank
considers the "flagship products" of the new program. (Both of those
have flat APRs of 13.9 percent.) The program includes a total of six new offerings,
including the Spark Select card, which offers an APR as low as 9.9 percent and
0 percent introductory APR through July 2012.
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"Small business cards
are not a one-size-fits-all solution for business owners," Girardo said, "and
we believe we can offer cards that suit their individual business needs and
help them achieve more."
Other issuers made moves as
well. Citi raised the high ends of the APR ranges on two of its cards -- the
Diamond Preferred Rewards MasterCard and the Platinum Select MasterCard -- from
20.99 percent to 21.99 percent. Both cards' low ends stayed at 11.99 percent.
Since, as mentioned earlier, only the low ends of ranges are factored in to our
average calculations, the moves had no impact on the national average.
Citi did not offer comment
on the changes.
The other change came from
subprime issuer CreditOne. The bank eliminated the high end of the APR range on
its Visa Platinum card. The card had previously been offered with a range of
23.90 percent to 26.90 percent. Now, it comes with a flat rate of 23.90
CreditOne didn't return a
phone call for comment on the changes.
See related: Calculator: How long will it take to pay off your credit card balance?
Published: October 12, 2011