Credit card interest rates hold steady at 14.87 percent
By Kelly Dilworth | Published: March 18, 2015
|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: March 18, 2015|
Average rates on new credit card offers held firm Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report.
None of the issuers tracked by CreditCards.com altered interest rates. As a result, the national average annual percentage rate (APR) stayed at 14.87 percent for the fourth consecutive week.
Citi lengthened a promotional offer on one of its rewards credit cards. Cardholders who apply for the Citi Diamond Preferred card now have 21 months to make interest-free purchases. Citi also increased the card's 0 percent balance transfer offer from 18 months to 21 months.
The Diamond Preferred card's new promotional terms are unusually generous compared to other cards. For example, the Citi Diamond Preferred card offers the lengthiest promotional period of any card tracked by CreditCards.com. Most cards tracked by CreditCards.com offer promotional APRs for a maximum of 12 to 15 months.
BP Visa card changes hands
Drivers hoping for a new gas card from the energy company BP will have to wait a few months before they can apply.
Chase has taken applications for the BP Visa card offline while a new issuer -- Synchrony Financial -- prepares to take over the portfolio. Synchrony Financial announced earlier this year that it's replacing J.P. Morgan Chase as the issuer of BP-branded credit cards, including the BP Visa.
According to a new note posted on the BP Station website, details about the new Synchrony-issued BP Visa card with pump rewards will be released May 18.
In a statement issued Jan. 22, Synchrony Financial executive Tom Quindlen touted the BP Visa card's rewards. "We look forward to working with BP and its network to provide drivers with credit and reward options that maximize their savings," said Quindlen.
A CreditCards.com study released March 16 comparing gas station rewards cards says the savings are relatively puny -- and will shrink further if gas prices increase significantly by the time the BP Visa card returns to the market.
In a review of the top 20 gasoline-brand credit cards, including the BP Visa, CreditCards.com found that fuel savings for gas cards vary widely between cards and often depend heavily on the price of gas.
With gas prices low, cardholders are currently enjoying better savings than they did before prices fell sharply late last year. But according to CreditCards.com research, those savings are still relatively modest. For example, the average gas card offers a 10-cents-per-gallon rebate on gas purchases, CreditCards.com found, adding up to approximately $4 in savings for every $100 you charge to your card. But because nearly all gas rebate cards are offered on a per-gallon basis, when gas prices rise, those savings diminish in value.
Before the BP Visa card changed hands, cardholders typically earned 15 cents per gallon for every $100 purchased at a BP gas station and 5 cents per gallon for every $100 purchased elsewhere.
Credit card payment rates take a
Despite lower gas prices and an improving job market, some cardholders still struggle to pay their bills, according to the credit rating agency Experian.
According to Experian research released March 17, late payments on bank-issued cards increased in February to their highest levels since July 2014. The default rate on bank-issued cards rose to 2.84 percent -- up from 2.83 percent in February 2014.
Late payments are still near historic lows, but according to Experian, February's uptick in credit card defaults marks the first time since 2010 that the default rate has increased year-over-year.
Cardholders also paid down their cards more slowly last month, according to financial services company Keefe, Bruyette and Woods. The average payment rate -- which measures the rate at which cardholders trim their balances -- fell slightly in February, compared to the previous month.
Cardholders usually pay their cards down at a higher rate after they receive their tax refunds. But so far, cardholders have been somewhat less aggressive about paying down their cards, at least compared to January.
"February is typically a period of balance pay downs due to consumers using some of the tax refunds to deleverage," wrote Sanjay Sakhrani, Steven Kwok and Tai DiMaio in a March 16 research note.