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Rate survey: Credit card interest rates rise to 14.96 percent

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CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.96%
14.95%
14.96%
Low interest 10.37%
10.37% 10.40%
Balance transfer 12.39%
12.39%
12.62%
Business 12.98%
12.98%
13.13%
Student
13.16%
13.16%
13.31%
Cash back  14.85%
14.85%
14.30%
Airline  14.63%
14.63%
14.63%
Reward 14.79% 14.78%
14.80%
Instant approval 28.00%
28.00%
15.49%
Bad credit 23.64%
23.64%
23.64%
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.
Source: CreditCards.com
Updated: June 19, 2013

Interest rates on new credit card offers rose this week for the first time in more than a month, according to the CreditCards.com Weekly Credit Card Rate Report.

The national average annual percentage rate (APR) climbed to 14.96 percent Wednesday after Chase boosted the APR on one of it's hotel rewards credit cards. 

Cardholders who qualify for the Marriott Rewards Visa card from Chase will now be offered an APR of 15.24 percent. Previously, consumers were offered a 14.24 percent APR, which is just slightly below the national average. 

Chase spokesman Rob Tacey declined to comment specifically on the change. However, he said cardholders are free to shop around for a better fit. "Chase offers a number of cards with different rates and benefits," wrote Tacey in an email. "Which is why we encourage customers to choose the card that is best for them."

Late payments drop again
Average rates have remained near 15 percent for nearly three years. However, despite contending with higher APRs than they did in the past, most consumers are managing their credit card payments just fine.

Late payments on credit cards, for example, fell again in May for five out of six of the nation's biggest lenders, according to multiple reports.

Chase, Bank of America, Capital One and Discover each reported Monday to the Securities and Exchange Commission that fewer people paid their credit card bills late last month. 

American Express said it received about the same number of late card payments in May as it did in April. However, despite the lack of movement, the overall number of late payments that it received remained exceptionally low by historical standards.

The average delinquency rate during periods when the economy is considered "normal," for example, hovers between 3 percent and 5 percent of all card payments, according to a Wall Street Journal article, published June 17.   

Currently, all six of the nation's biggest lenders are reporting delinquency rates -- which measure late payments by 30 days or more -- that are well below that historical norm. 

For example:

  • The delinquency rate for American Express clocked in at 1.1 percent in May, according to a table published by Reuters.
  • The delinquency rate for Chase fell to 1.6 percent.
  • The delinquency rate for Bank of America dropped to 2.6 percent.
  • The delinquency rate for Capital One slid to 2.97 percent.
  • The delinquency rate for Discover hit 1.58 percent.
  • The delinquency rate for Citi decreased to 1.98 percent.

Analysts say that the continual drop in the number of late payments that issuers receive is a good sign that most cardholders are remaining financially afloat, despite the soft economy, and are serious about paying their bills on time.

Borrowers spending less income on debt
Many consumers are also enjoying smaller loan payments these days in proportion to their income, according to a report released June 17 by the Federal Reserve. That could also be helping to keep them above water.

According to the Federal Reserve's Q1 Report on Household Debt Service and Financial Obligations Ratios, consumers spent a slightly larger percentage of their income on required loan payments in the first quarter of 2013, compared to the last three months of 2012.

Despite the quarterly uptick, however consumers still spent far less of their disposable income last quarter on required loan payments than they had for most of the past three decades.

The ratio -- which measures the percentage of income that consumers spend on required loan payments -- hit 10.32 in the fourth quarter of 2012 -- a 33-year low. In the first quarter of 2013, it ticked up to just 10.49 percent. The third-lowest ratio on record -- 10.51 -- was recorded in the fourth quarter of 1980 and matched in the third quarter of 1983.  

Experts say that the lower debt service ratios over the past several quarters are primarily due to today's historically low interest rates, which are pushing the total amount that consumers have to pay on their loans way down. The Fed lowered the federal funds rate -- a key interest rate benchmark that affects most consumer loans -- down to zero in 2008 and has yet to raise it. As a result, most consumers are paying far less to borrow than they otherwise would.   

See related: Fed signals rate hikes remain in distant future

Published: June 19, 2013



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Credit Card Rate Report

Updated: 11-29-2014

National Average 14.98%
Low Interest 10.37%
Balance Transfer 12.73%
Business 12.85%
Student 13.14%
Reward 14.93%
Cash Back 14.94%
Airline 15.46%
Bad Credit 22.73%
Instant Approval 23.33%

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