Credit card interest rates hold steady at 14.98 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: Nov. 26, 2014
rates on new credit card offers remained unchanged this week, according to the
CreditCards.com Weekly Credit Card Rate Report.
After sliding two weeks in a row, the
national average annual percentage rate (APR) stayed put at 14.98 percent
Wednesday. None of
the cards tracked by CreditCards.com advertised new interest rates. Issuers
left promotional rates unchanged as well.
rates on new card offers are at their lowest point in more than a
year. The last time average rates were this low was in September 2013 when the
national average hit 14.99 percent.
this month, average rates had been hovering near record highs. For example, on
Oct. 29, the national average rose to 15.09 percent and stayed there for two
weeks before dropping to 15 percent in mid-November. The national average APR
for the year is currently 15.03 percent.
Card issuers gear up for the
holiday season launches, credit card issuers are stepping up their marketing
to a report from the financial services firm Credit Suisse, card issuers
mailed 17 percent more offers in October than they did the previous year. Month-over-month,
credit card mail volume expanded from 336 million offers in September to 355
card issuers increase the number of offers they send between September and
October by around 4 percent, said Credit Suisse. This year that number expanded
by 6 percent, indicating that issuers are working harder this year to win new
customers before the holiday season peaks.
spending typically increases substantially during the holidays when shoppers
hit the stores for Black Friday bargains and holiday gifts, and card issuers are
eager to cash in on increased spending.
addition to sending more mailings to cardholders' homes, issuers frequently
introduce new promotions. Historically, mailings also tend to increase by an
even larger amount in November and December, according to Credit Suisse data.
year was no exception. Citi, for example, announced Nov. 24 that it was expanding
its travel protection benefits, such as trip cancellation and interruption
protection. It also used the opportunity to promote its price rewind service,
which searches for a lower price on eligible purchases and refunds cardholders
Chase reintroduced holiday-themed VIP lounges for United Mileage Plus cardholders at
two major shopping malls on Nov. 20, while Discover announced last month that it was ramping
up the amount of cash back Discover "it" and Discover More
cardholders could receive on select purchases.
to Credit Suisse, Capital One was the most aggressive issuer in sending out new
offers last month. The issuer mailed 61 million promotions to potential
cardholders -- 36 percent more than it mailed during the same time last year. Citi
was a close second, mailing just under 61 million offers to potential
Suisse estimates that card issuers will have mailed 4.3 billion promotions by
the end of 2014 -- up from 3.9 billion offers in 2013. But
despite steady increases in spending over the past two years, the rate of
growth in the number of offers has slowed, said Credit Suisse. For
example, card issuers mailed 30 percent more offers in 2013 than they did in
2012. But they're expected to mail just 10 percent more offers in 2014 than
they did the previous year.
Interest-free promotions shorter,
card issuers are also continuing to rely heavily on interest-free purchase and
balance transfer offers to attract new cardholders. But according to Credit
Suisse's latest analysis of consumer credit offers, some issuers are being less
generous with their terms.
example, the average duration period for 0 percent balance transfer offers has
plummeted since July when the average balance transfer period rose to almost 20
months. In October, the average balance transfer period was just 14.2 months.
See related: Card applications fall among younger, lower-score consumers, Fed: Banks ease grip on cards
Published: November 26, 2014