Credit card interest rates hold steady at 14.89 percent

By's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.89% 14.89%
Low interest 10.24%
10.24% 10.37%
Cash back 14.91%
Balance transfer 12.80%
Business 12.85%
Student 13.14%
Airline 15.52%
Reward  14.89%
Instant approval 23.33%
Bad credit 22.73%
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: Jan. 14, 2015

Average rates on new credit card offers remain unchanged this week, according to the Weekly Credit Card Rate Report.

The national average annual percentage rate (APR) stayed at 14.89 percent Wednesday after falling the previous week to an almost three-year low. The last time average rates dipped below 14.9 percent was in February 2012.

Most card issuers tracked by left interest rates alone this week. American Express floated a test offer of 15.24 percent on the Gold Delta SkyMiles credit card. However, it didn't offer the same rate to all applicants. Some applicants who view the card online are offered a single flat APR of 15.24 percent. Others are offered a range of APRs, starting at 15.24 percent and maxing out at 19.24 percent. Card issuers frequently test online offers by showing different terms to applicants.

Transactions grow
As 2014 drew to a close, credit card holders continued to ramp up their card usage, according to data released Jan. 14. For example, the credit card units at J.P. Morgan Chase and Wells Fargo Bank recorded significantly more transactions in the final quarter of 2014 than they did the previous year, according to the banks' fourth quarter earnings reports. Cardholders also spent slightly more overall and ran up larger balances.

J.P. Morgan Chase reported Wednesday that Chase cardholders spent approximately 10 percent more in the final quarter of 2014 than they did in 2013. They also used their cards more often. The bank recorded approximately 7 percent more transactions during the 2014 holidays.

In addition, Chase cardholders carried slightly more debt last quarter than they did the previous year. Credit card balances were up 3 percent by the end of 2014.

Meanwhile, the credit card unit at Wells Fargo also enjoyed increased demand for new credit, according to the bank's fourth quarter earnings report. Wells Fargo reported Wednesday that the percentage of Wells Fargo customers who own a Wells Fargo credit card rose to 41.5 percent last quarter -- up from 37 percent in 2013. 

The bank also recorded more transactions in the fourth quarter, thanks in part to a larger number of Wells Fargo customers owning cards. In addition, Wells Fargo acquired the credit card portfolio of Dillard's department stores in 2014, boosting the total number of Wells Fargo cards in circulation.

As a result, the total number of transactions the bank recorded rose 19 percent, year-over-year. The total amount that Wells Fargo customers spent on new purchases grew 17 percent. Outstanding credit card balances expanded 16 percent last quarter.

Delinquencies remain stable
Meanwhile, cardholders are continuing to repay their bills at record rates, according to data from the American Bankers Association, boosting card issuers' ability to take risks on new customers.

According to the group's consumer credit delinquency bulletin released Jan. 8, late payments on credit cards became slightly more common over the summer after declining in frequency two quarters in a row. However, the total number of late payments that card issuers receive is still exceptionally low by historical standards.

For example, the 15-year average for bank card delinquencies (late payments by 30 days or more) is currently 3.77 percent of all accounts, according to the American Bankers Association. In the third quarter of 2014, the bank card delinquency rate was just 2.51 percent of all accounts.

Experts predicted there would be slightly more delinquencies in 2014 than the previous year. But according to the American Bankers Association's James Chessen, cardholders have continued to be reluctant to take on more debt than they can quickly repay and show few signs of changing course any time soon.

"Bank card delinquencies have hovered near 15-year lows with only minor fluctuations over the past two years, and we expect that trend to continue," said Chessen in a news release. "While people are clearly ready to spend again as economic activity picks up, the overwhelming majority of consumers continue to keep debt at manageable levels." 

See related: Fed: November credit card balances down 1.3 percent

Published: January 14, 2015

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