Rate survey: Credit card APRs dip for 1st time in a month
By Kate Tomasino
|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: Dec. 7, 2011|
Interest rates on new credit card offers dipped slightly this week, according to the CreditCards.com Weekly Credit Card Rate Report.
The average annual percentage rate (APR) fell to 14.98 percent. It's the first rate decrease since early November and was spurred by rate changes from two of the nation's largest credit card issuers.
Wells Fargo had offered an APR range of 11.15 percent to 23.15 percent on both its cash back and rewards credit cards before increasing both cards' offers to a range of 12.15 percent to 23.15 percent.
Meanwhile, Discover lowered rates on its Motiva, More and Open Road cards. Each had carried an APR range of 11.99 percent to 19.99 percent before being lowered to a range of 10.99 percent to 19.99 percent.
Discover's decreases offset Wells Fargo's increases in our calculations, leaving the overall national average down slightly.
Wells Fargo spokeswoman Lisa Westermann confirmed her bank's changes. "We regularly review our pricing and, if needed, make changes to reflect the current market conditions," Westermann said.
Discover spokesman Matthew Towson declined comment.
The only other change we saw among cards we track came from Cabela's. The sporting goods retailer changed the top end of the APR range it offers for the Cabela's Club Visa from 18.24 percent to 18.26 percent. The low end of the range, 9.99 percent, remained unchanged. However, since we only use the low end of ranges to calculate the national APR average, the move did not affect the national average.
Though most U.S. variable rate credit cards are tied to the U.S. prime rate -- which moves based on changes to the Federal Reserve's federal funds rate -- the Cabela's card is tied to Libor. When Libor moves up or down, the APRs of all credit cards that are tied to it move in the same direction by the same amount.
As a result of the various moves, average APRs in four of the nine categories we track fell -- some for the first time in months -- while five were unchanged:
- The low-interest category stood at 10.73 percent for eight months straight before sliding to 10.62 percent.
- The cash-back average stood at 14.70 percent for four weeks straight before inching down to 14.61 percent.
- The rewards card category stayed at 14.70 for four weeks straight before dipping to 14.69 percent this week.
- The instant approval category had held steady at 15.99 percent throughout 2011 before moving downward to 15.49 percent. That category contains the fewest cards of any we track.
Around the holiday season, cardholders often need a little extra help to supplement holiday spending, so falling interest rates are a good thing. However, shoppers who get that new, low-interest card need to make sure they aren't gifting themselves with extra credit card debt this holiday. Make a spending budget and stick to it.See related: Calculator: How long will it take to pay off your credit card balance?
Published: December 7, 2011
- Poll: 2 in 5 Americans lose sleep over health care costs – Americans lose sleep over health care more than any other money worry, according to a new CreditCards.com poll ...
- Consumer debts rise, but fears of missing payments fall – Fears of missing a debt payment are down substantially in a Federal Reserve Bank of New York survey, even as debt loads are grow and interest rates rise ...
- Poll: Charging cheap items is cool with cardholders – We pay by credit cards for most big buys, and more small ones than ever ...