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Rate survey: Card rates stay at 15% for sixth consecutive week

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Interest rates on new credit card offers lingered at 15 percent Wednesday for the sixth 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 15.00%
15.00%
14.91%
Low interest 10.40%
10.40% 10.40%
Balance transfer 12.62%
12.62%
12.43%
Business 13.13%
13.13%
12.67%
Student
13.16%
13.16%
13.77%
Cash back  14.47%
14.47%
14.24%
Airline  14.63%
14.63%
14.63%
Reward 14.84%
14.84%
14.70%
Instant approval 15.49%
15.49%
15.49%
Bad credit 23.64%
23.64%
23.64%
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: Oct. 24, 2012

The national average APR has held steady for the majority of 2012 and shows few signs of moving significantly any time soon. Interest rates have remained at, or just below, 15 percent for the past 14 consecutive weeks and haven't dipped below 14.9 percent since February.

When average rates have changed, they haven't moved by much. During this same time last year, for example, the national average was just a hair lower, clocking in at 14.99 percent.

Issuers have appeared reluctant to make major changes to their card offerings for most of 2012. For example, only one issuer, Bank of America, altered rates this week, according to CreditCards.com data. It was the first time since July that one of the top six credit card issuers, including Citibank, Chase, Capital One, Discover and American Express, made a rate change to a card tracked by CreditCards.com.   

This week, Bank of America widened the spread of possible rates on two of its rewards credit cards -- the BankAmericard Power Rewards card and the Accelerated Rewards card -- by raising the cards' maximum interest rates by 2 percentage points.

Previously, both cards advertised a range of 12.99 percent to 20.99 percent. Now the cards feature a range of 12.99 percent to 22.99 percent -- a 10 point difference between the cards' highest and lowest available rates.

The changes didn't affect the national average, however, because CreditCards.com only considers a card's lowest possible rate when calculating average interest rates. 

Credit card mailings pick up, barely
Credit card issuers' inactivity extends beyond their offers. They have also sharply reduced the number of credit card offers they mail to prospective customers in recent months. Credit card mail volume is down by 42 percent since this time last year, according to new research by Mintel Comperemedia.

Consumers saw an uptick in the volume of mailed credit card offers in September, compared to the previous month. Issuers increased the number of offers they mailed by 1 percent. However, the overall number of credit card offers being mailed to prospective credit card holders is still notably depressed, say analysts at the financial services firm Credit Suisse, citing Mintel Comperemedia research.

Credit card issuers appear to be concentrating most of their marketing efforts on cardholders with the best credit and analysts at CreditSuisse say that may be the norm, for now. The Credit CARD Act of 2009 bars issuers from increasing customers' APRs without advance notice; analysts say  such pricing limitations lead issuers to remain cautious about the type of customer they attract. "We believe that card issuers' inability to reprice existing card balances under the CARD Act could cause issuers to continue to focus marketing efforts toward the higher FICO score category," wrote analysts in a research note released Oct. 22.  

That means that many of the credit card offers that do get mailed to prospective customers will be for high-end cards with fatter rewards, say analysts. Already, the majority of credit cards that are offered to new cardholders are rewards cards, according to an analysis by Credit Suisse. For example, 63 percent of offers mailed to consumers in September were for rewards credit cards with no annual fee. That's up from 55 percent of all credit card offers a year ago.   

See related: Bankruptcies fall again in third quarter of 2012

Published: October 24, 2012


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