Survey: Average card rate holds steady at 15.16% for 10th week
By Kelly Dilworth | Published: April 13, 2016
The average credit card interest rate remained unchanged Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report.
None of the cards included in the Weekly Rate Report altered minimum interest rates this week. As a result, the national average annual percentage rate remained at 15.16 percent for the 10th straight week.
Barclaycard floated a test offer containing a higher maximum rate on the Wyndham Rewards Visa Signature card. Some applicants are being offered a wider range of APRs, starting at 15.49 percent and maxing out at 25.24 percent. Others are still being offered a lower range of 15.49 percent to 20.24 percent.
Chase recently added higher maximum rates to some of its card offers as well. The higher rates could indicate that issuers such as Barclaycard and Chase are opening their doors to a wider range of applicants.
Consumers continue to keep up with payments
Interest rates on most card offers have risen by at least a quarter of a percent since December when the Federal Reserve raised its benchmark interest rate. But according to research released April 11 by the New York Federal Reserve, most households are having little trouble adjusting to the change.
The New York Fed surveyed roughly 1,200 U.S. households in March and found fewer consumers expected to miss a loan payment in the near future.
Households also expected to have easier access to credit and to have slightly more pocket change as their incomes increase. However, they also predicted they would curb their spending before heading into the summer. Households traditionally increase their credit card use during the hottest months of the year when they buy more airline tickets, gas up their cars for vacations, book longer hotel stays and purchase summertime entertainment.
The American Bankers Association, meanwhile, reported that late payments on bank-issued credit cards fell again in the fourth quarter of 2015, as more consumers managed to come up with at least the minimum payment on their cards. The delinquency rate for bank-issued cards – which measures late payments by 30 days or more – dipped from 2.54 percent of all accounts to 2.52 percent.
Overall, late payments on bank-issued credit cards remain near record lows. The 15-year-average for bank card delinquencies, for example, is 3.70 percent.
Experts predicted late payments on credit cards would inevitably increase as banks approved more cardholders with a history of missing payments. But so far that hasn’t happened.
ABA economist James Chessen attributes the relative stability of bank card delinquencies to consumers’ improved behavior. Since the 2007 to 2009 recession, consumers have become much less willing to miss payments.
“A confluence of factors have kept delinquencies very low,” said Chessen in a statement. “The economy’s better, jobs are up, wages have grown and consumers are keeping a watchful eye on their finances. Even during the holiday spending season when temptation to overspend reaches its peak, consumers did a good job of ensuring expenses did not outpace income.”
Meanwhile, banks have also been careful to give new cardholders with lower credit scores just enough credit to make purchases, but have kept subprime consumers’ credit limits relatively low.
According to a March 2016 ABA report, for example, lenders opened 30 percent more subprime credit card accounts in the third quarter of 2015 than the previous year, but kept subprime cardholders’ credit limits relatively low. The typical subprime cardholder, for example, only has access to about $2,356 in available credit – not enough to go too far into debt.
|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: April 13, 2016|
See related: Fed: February card balances bounce back