Credit card interest rates hold steady at 15.07 percent
|CreditCards.com's Weekly Rate Report
||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: Oct. 15, 2014
rates on new card offers didn't budge this week, according to the
CreditCards.com Weekly Credit Card Rate Report.
national average annual percentage rate (APR) remained at 15.07 percent
Wednesday for the third consecutive week.
the cards tracked by CreditCards.com advertised new interest rates. Promotional
balance transfer offers and introductory APRs also remained unchanged.
rates on new card offers are currently near record highs. In September 2013,
the national average APR rose to 15.02 percent after hovering between 14.96
percent and 14.99 percent for 10 months. It hasn't fallen below 15 percent
rates on new card offers have inched up every year since 2010, when the Credit CARD Act of 2009 went into effect. The national average APR for the year is
currently 15.03 percent. In 2013, the average APR for the year was 14.98
say that lenders have slowly increased rates in order to help make up for the
loss in revenue from the CARD Act, which barred issuers from the raising rates any time for any reason. Since
card issuers can no longer hike rates on existing accounts without giving at
least 45 days' advance notice, many lenders are offering higher rates upfront.
the CARD Act went into effect, the average APR for 2009 was 12.34 percent
-- nearly 3 percentage points lower than it is now.
Higher rates haven't
deterred applicants from applying for new cards, however.
Issuers boost lending
holders are showing increased interest in new credit, according to multiple
reports, and lenders are responding by issuing more cards to a wider range of
example, Bank of America reported on Oct. 15 that it approved more
than 1.2 million new cards in the third quarter of 2014 -- up from 1 million
new cards in the third quarter of 2013.
percent of those cards went to current Bank of America customers. Thirty-six
percent went to applicants who didn't have a previous relationship with the
Wells Fargo reported on Oct. 14 that the number of
Wells Fargo customers with a Wells Fargo credit card jumped to 39.7 percent in
the third quarter -- up from 36 percent in the summer of 2013.
from the credit bureau TransUnion also found that credit card
lending is picking up. In the first quarter of 2014, for example, consumers
opened nearly 18 percent more accounts than they did the previous year. In
addition, TransUnion found that slightly more of those cards belonged to
cardholders with subprime credit scores -- indicating that banks are becoming
less picky about their customers.
Card spending continues to rise
are also processing more transactions, which has helped boost their total fee
issuers charge retailers a transaction fee every time you swipe your card, and
that's become an important source of revenue for card issuers -- particularly
now that so many cardholders avoid paying interest by paying off their balances
in full each month.
Chase said in its Oct. 14 earnings report that
it processed 6 percent more transactions in the third quarter of 2014 than it
did the previous year. Meanwhile, spending on Chase-issued cards rose 12
percent in the third quarter, compared to 2013. Customers also carried slightly
larger balances, said Chase.
separate report, released by First Data Corp., also showed that credit card
spending is steadily increasing. Total card spending grew 5 percent last month,
according to First Data Corp., after rising by 5.8 percent in August.
spending on debit cards using a PIN, by contrast, increased by just 1.9 percent
in September. Spending on debit cards using a customer's signature grew by 1.1
to First Data's Krish Mantripragada, last month's growth in credit card
spending is partially due to issuers' increased willingness to lend. "We
continue to see lenders make credit more readily available," said
Mantripragada in a news release, and that's given cardholders substantially
more room to spend.
See related: Study reveals rewards cards' boom in popularity
Published: October 15, 2014