Average card APR remains stuck at 14.89 percent
|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: Jan. 28, 2015
Interest rates on new credit
card offers didn't budge this week, according to the CreditCards.com Weekly
Credit Card Rate Report.
The national average annual
percentage rate (APR) remained fixed at 14.89 percent Wednesday for the fourth
Most issuers left credit card
terms alone as well.
Fifth Third Bank sweetened
promotional terms on the Fifth Third Bank Platinum MasterCard. Applicants now
have 15 months to take advantage of interest-free purchases and balance
transfers instead of 12.
Meanwhile, Capital One
eliminated the $19 annual fee on the Capital One Platinum credit card for
consumers with average credit. However, applicants who qualify for the card are
still charged a 24.9 percent APR.
The average APR for consumers
with bad credit, by contrast, is currently 22.73 percent. The average maximum
APR on new credit card offers is 21.23 percent.
Lenders forecast more debt, delinquencies ahead
After years of cautious
lending, issuers have made it easier in recent years for consumers with average
credit scores to qualify for a new card. But according to a January 2015 survey of credit risk professionals, many lenders are concerned that stagnant
wages and persistent income inequality could make it harder for some consumers to
pay their bills.
Those interviewed by the
Professional Risk Managers' International Association said that the growing
wealth gap in North America threatened to derail a significant number of
consumers' credit scores and that could have a significant impact on consumer
lending. For example, nearly a quarter of respondents said that has already
prompted their institution to change their underwriting standards. Just over 11
percent said that the disparity in people's incomes, fueled by sluggish wages,
is a bigger threat to credit availability than unemployment, consumer debt or
Not all lenders, however, are
equally pessimistic. For example, almost 39 percent of credit risk professionals
expect credit card delinquencies -- late payments by 30 days or more -- to
remain near historic lows throughout the first half of 2015, while
approximately 37 percent predict late payments will increase slightly. Just 2
percent think the card delinquency rate will increase sharply in the months
Lenders do expect consumers
to carry significantly more debt, but they don't think that will stop issuers
from granting them even more. For example, more than 57 percent predict that card
balances will swell over the next six months, while nearly 40 percent believe
that consumers will be able to access more credit if they want it.
Many in the lending community
are also increasingly bullish about the number of applicants applying for new
cards and other lending products and are confident that issuers will manage to
avoid tightening their standards. Almost 55 percent of credit risk
professionals think that they'll see more credit applications this year than
they did in 2014. Nearly 58 percent think consumers will ask for larger amounts
of credit and slightly more than 30 percent think the approval rate for new
credit will continue to improve.
In addition, nearly 60 of
credit risk professionals are optimistic that most creditworthy individuals who
want a new card will be able to get one.
In a recent blog post
highlighting the new survey, FICO chief economist Andrew Jennings said that the
survey's results underscore the positive impact the economy is having on
lending. "We're seeing the effects of 58 straight months (and counting) of
job growth," wrote Jennings in the Jan. 21 blog post. "That kind of job growth means more people have money to spend.
More people feel comfortable borrowing. More banks feel comfortable lending."
However, not all consumers
are in a position to financially benefit from the improvement. "Along with
that good news, it is almost certain that some consumers will lean too far out
over their skis and get into financial trouble," added Jennings. "And
it also means people who aren't able to benefit from the economic expansion are
at risk of falling much further behind financially."
See related: Fed keeps rates low amid mixed economic signals
Published: January 28, 2015