Rate survey: Average card APR remains at record high
The average APR on new card offers remained fixed at a nearly five-year high this week, according to the CreditCards.com Weekly Credit Card Rate Report.
For the fifth consecutive week, the national average APR remained at 15.22 percent. The last time average rates climbed this high was in December 2011 when the national average briefly peaked at 15.22 percent. This is the longest period of time since CreditCards.com began tracking rates in mid-2007 that average rates have consistently remained above 15.20 percent.
The average APR for the year also peaked this month, climbing to an all-time high of 15.18 percent. During this same time last year, by contrast, the average APR for the year was just 14.95 percent.
None of the cards tracked by CreditCards.com advertised new APRs this week. Issuers also left promotional rates, such as 0 percent balance transfer offers, unchanged.
Consumers increasingly prefer cards
Consumers around the globe are increasingly reaching for plastic instead of cash when paying for new items, according to new estimates by Euromonitor International.
The market research firm predicts that credit, debit and prepaid card payments will overtake cash payments for the first time on record by the end of this year. Euromonitor estimates that global consumers will make roughly $23.1 trillion worth of card payments in 2016 – up 6.6 percent from last year.
Cash payments, by contrast, are projected to grow much more slowly. Euromonitor estimates that cardholders will spend just $22.6 trillion using cash.
So far, debit card payments have grown at the fastest rate, according to Euromonitor, increasing by 8.1 percent. Global credit card payments expanded by 5.3 percent.
The research and consulting firm Retail Banking Research released similar findings, projecting that card payments will more than double by 2021 as more people reach for cards instead of checks or cash.
“We are seeing strong growth in card usage in all regions,” said Retail Banking Research’s Chris Herbert in a Sept. 7 news release. “Cardholders in developing markets are gradually becoming more accustomed to using cards rather than cash for payment and this combined with a rapidly expanding acceptance network is creating the perfect environment for a card payments boom.”
Meanwhile, consumers in developed countries, such as the United States and Canada, are increasingly using cards for smaller dollar purchases, says Herbert. In addition, consumers are becoming more comfortable with using mobile and contactless payments, helping fuel cards’ rise.
Despite a steady increase in the use of cards instead of cash, experts say that it could still be a while before the world becomes truly cashless. A 2014 report from MasterCard, for example, estimated that at least 85 percent of the world’s transactions were conducted using cash. “Even in the most cashless countries on Earth, like France and the Netherlands, cash still accounts for 40 percent or more of all consumer transactions,” wrote MasterCard’s Hugh Thomas. “Meanwhile, in most countries, the cashless journey has only just begun.”
|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: Sept. 28, 2016|
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