Rate survey: Credit card interest rates remain at 15.01 percent

By's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.01%
Low interest 10.37%
10.37% 10.46%
Balance transfer 12.64%
Business 12.80%
Cash back  14.84%
Airline  15.30%
Reward 14.97% 14.97%
Instant approval 28.00%
Bad credit 22.73%
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: May 14, 2014

Average rates on new credit card offers remained untouched this week, according to the Weekly Credit Card Rate Report.

The national average annual percentage rate (APR) lingered at 15.01 percent Wednesday after increasing slightly the previous week.

None of the cards tracked by advertised new terms. After retuning offers on a few cards earlier this month, issuers left unchanged their standard rates, 0 percent balance transfer offers and introductory APRs. 

These days, issuers rarely change credit card terms. That's especially true for APRs. The national average APR, for example, has changed just five times since Jan. 1. Each time, the change has been minuscule.

Currently, average APRs are just slightly higher than they were a year ago. On May 15, 2013, for example, the average APR was 14.94 percent.

Average rates have remained above 15 percent since September. 

Household debt picks up
After years of cautious behavior, Americans are taking out more home and auto loans, new Federal Reserve research shows. But they're still not running up their cards.

Household debt grew by $129 billion in the first quarter of 2014 to $11.65 trillion, according to the New York Federal Reserve -- up 1.1 percent from the previous quarter.

Last quarter's pickup in debt was largely driven by a surge in the number of auto loans, student loans and mortgages that consumers took out at the beginning of the year, the Federal Reserve said.

However, credit card debt played a much smaller role in the total amount of debt households took on.

Card balances fall
According to the New York Fed's quarterly report on household debt and credit, aggregate credit card balances shrunk by $24 billion in the first quarter of 2014, after increasing by $11 billion at the end of last year.

Year-over-year, credit card debt is down by $1 billion overall -- indicating that consumers' appetite for high-interest credit has waned since last year. 

Despite racking up less credit card debt overall, cardholders do have substantially more credit available, thanks in part to looser restrictions from lenders. According to the Fed, the aggregate credit limit on new and current cards has expanded by 5 percent since the first quarter of last year.

Overall, issuers are still cautious about the amount of credit they're willing to lend. For example, the total amount of credit available to new and current cardholders is still well below pre-recession levels. However, they have become somewhat more generous in recent months, partially because they are dealing with much less risky borrowers.

Not only has the economy improved significantly in the last year, which has helped boost consumers' employment prospects; borrowers have also become much more responsible about paying back their loans.

Late payments on credit cards, for example, have become exceedingly rare in recent years and show few signs of increasing substantially anytime soon. According to the New York Federal Reserve's latest report on household debt and credit, late payments by 90 days or more fell to 8.5 percent in the first quarter of 2014 - down from 9.5 percent in the fourth quarter of 2013.

Consumers also repaid their home, auto loans and student loans at a higher rate in the first quarter -- indicating to analysts that consumers' finances are continuing to improve.

Cardholders remain cautious
Consumers have been reluctant to charge heavily on their credit cards for several years now. And according to a survey from Gallup, they're paying off their balances at much higher rates than they used to.

According to the survey, 64 percent of Americans told researchers that they almost always pay their balances in full -- up from 60 percent in 2008 and 55 percent in 2002.

Consumers also appear to be much less interested in carrying a wallet full of cards. For example, consumers reported carrying fewer cards on average this year and were less likely to carry more than 4 at a time.

The average credit card owner currently has between three and four cards, according to Gallup. Meanwhile, 29 percent of consumers don't carry a credit card at all these days -- up from 22 percent in 2008.

See related: May 7, 2014: Average rates on new credit card offers inched higher

Published: May 14, 2014

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