Credit card interest rates stay put at 14.9 percent
By Kelly Dilworth | Published: April 15, 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: April 15, 2015|
Average rates on new card offers didn't budge this week, according to the CreditCards.com Weekly Credit Card Rate Report.
None of the cards tracked by CreditCards.com advertised new interest rates. As a result, the national average annual percentage rate (APR) remained at 14.9 percent for the fourth week in a row.
Most card offers have remained unchanged since the beginning of the year. Out of 100 cards, just eight cards feature new rates this year.
Three cards saw their minimum rates increase. An equal number have enjoyed a rate cut on their lowest available APR.
Pentagon Federal Credit Union made the most dramatic rate change this year: It slashed the minimum APR on the PenFed Promise card from 9.99 to 7.99 percent. It also increased the card's maximum APR by 7 percentage points -- from 9.99 to 16.99 percent.
Banks approve more card accounts
The number of open card accounts has picked up in recent months, but it's not clear how many of those cards are only going to consumers with excellent credit. According to data from the Federal Reserve Bank of New York, some banks are clamping down on applications and only approving borrowers with relatively high scores.
Bank of America announced April 15 it issued 1.2 million new credit cards in the first quarter of 2015 -- up from 1 million new cards in the first quarter of 2014. Most of those cards went to existing Bank of America customers, but a solid 34 percent went to consumers who don't already have an existing relationship with the bank.
Meanwhile, Wells Fargo reported April 14 the number of Wells Fargo bank customers opting for a Wells Fargo credit card increased to 42 percent of all customers -- up from 38 percent in the first quarter of 2014.
Neither bank disclosed how many of those cards went to customers with average scores. But an April 2015 report from the Federal Reserve Bank of New York found that 59 percent of consumers with credit scores below 680 have been rejected for a credit card, car loan or mortgage sometime in the past year -- up from 51 percent the year before.
The same survey also found that the percentage of applicants getting approved for a new card hasn't changed much since last year. For example, in February 2015, 20 percent of credit card applicants said were rejected for a new card sometime in the past year. An equal percentage of applicants said the same thing the year before.
Cardholders still skittish about
Consumers who already have a card have increased their spending somewhat in recent months.
J.P. Morgan Chase reported April 14 that total credit card sales jumped 8 percent in the first quarter of 2015 compared to the previous year. Card balances also increased, helping boost the bank's credit card interest income. But the uptick in card debt was modest, especially compared to last year -- indicating that cardholders still aren't willing to carry big balances. According to Chase's first quarter earnings report, credit card balances expanded by just 1 percent, year-over-year.
Meanwhile, outstanding balances shrunk at Bank of America, compared to the first quarter of 2014. According to Bank of America's latest earnings report, consumers swiped their credit and debit cards more often this year, ut they also paid down their balances more aggressively.
See related: Fed: February card balances down 5 percent