Credit card interest rates linger 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. 22, 2014
rates on new card offers remained unchanged again this week, according to the
CreditCards.com Weekly Credit Card Rate Report.
national average annual percentage rate (APR) rested at 15.07 percent Wednesday
for the fourth consecutive week.
the cards tracked by CreditCards.com advertised new interest rates. Promotional
balance transfer offers and introductory APRs also were unchanged this week.
have remained extremely stable this year, especially for cardholders with low
credit scores. For example, cards for those with bad credit have gone 39 weeks
without an average APR change.
however, average rates on new card offers have been slowly rising each year
since 2010 when the Credit CARD Act of 2009 was implemented. The national
average APRs for 2011, 2012 and 2013 were 14.85, 14.96 and 14.98 percent,
respectively. The 2014 average APR is currently 15.03 percent.
the CARD Act, the average APR in 2009 was 12.34 percent, but after the act went
into effect, card issuers could no longer raise existing account rates without
giving at least 45 days' notice. As a result, many lenders now offer
higher rates upfront, but the rates have not deterred new card applicants.
Credit card mail offers
volume of credit card offers sent through the mail in September grew after two
weak months, according to a Credit Suisse mail volume report, indicating that
issuers are spending more to attract new card applicants.
issuers mailed 336 million card offers to consumers in September, up 6 percent
from August and up 9 percent from 2013 levels. Credit Suisse predicts 4.3
billion credit card mail offers will be sent by the end of 2014.
other channels have comprised a higher percentage of new accounts in recent
years, mail volume remains an important barometer of competitiveness, as well
as which brands are the most heavily marketed," research analyst Moshe
Orenbuch said in the Credit Suisse report. "We expect an increase in
industry competition in 2014."
offers were most popular in September, accounting for 54 percent of the mailings,
up 42 percent from last year. MasterCard-branded offers made up 25 percent of the
mailings, Discover 14 percent and American Express offers comprised only 3
percent of mailings.
This recent group of
mail offered consumers lower annual fees and more introductory offers. Only 17
percent of the September credit card mailings included an annual fee, up 1
percent from the previous month. Of those that had an annual fee, that fee
declined to $98 from $120 in August.
Additionally, 259 million of the 336 million mail offers included a 0
percent introductory APR rate teaser. Capital One offers had the most 0 percent
introductory rate offers, which were included in 97 percent of its mailings.
Discover was a close second with 96 percent of its offers including a 0 percent
Spending strong, card issuers flourish
card spending increased by 8.9 percent in the third quarter, playing a large role
in issuers' positive third-quarter earnings reports.
to a Credit Suisse U.S. bank card volume report, American Express reported the
highest third-quarter purchase volume total of $173 billion, with JPMorgan
Chase coming in a close second with $119.5 billion. Wells Fargo reported the
highest year-over-year purchase volume growth at 15.8 percent.
Express U.S. Card Services, in particular, reported a net income of $889
million in the third-quarter, up 14 percent from last year, thanks, in part, to
increased consumer spending.
member spending was up 9 percent, a modest acceleration from last quarter, and
loan balances grew 5 percent," Kenneth I. Chenault, chairman and chief
executive officer for American Express, said in a news release.
Synchrony Financial -- a recent
retail bank spin-off from GE Capital -- announced in its first earnings report
this quarter that it outperformed early predictions, especially in the retail
credit card segment, which is up 6 percent from 2013. Purchase volume, in
particular, increased 11 percent from last year.
See related: Card balances fall for the first time in months
Published: October 22, 2014