Rate survey: Credit card interest rates remain at 15.06% for 5th week
By Kelly Dilworth
|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: Dec. 18, 2013|
This is the fifth straight week at that rate for the national average.
None of the 100 cards tracked by CreditCards.com featured new rates this week. Issuers left promotional terms -- including 0 percent balance transfer offers and short-term APRs -- alone this week as well.
Barclays was the only issuer to alter terms on a card tracked by CreditCards.com this week, revising the promotional offer on its US Airways Premier World MasterCard.
Barclays trimmed the airline card's 0 percent balance transfer offer from 15 months to 12 months and added a promotional APR, giving applicants 12 months to take advantage of interest-free purchases. The change was the first since US Airways merged with American Airlines Dec. 9.
Fewer revolving balances,
Average rates on new credit card offers are currently at their highest point since 2012, according to CreditCards.com data. However, research from the American Bankers Association shows that a substantial number of cardholders may not care how high their APR is -- since they never pay interest on their balances.
According to research released Dec. 17, a growing number of credit card holders are skipping interest payments altogether and paying their balances in full each month.
In the second quarter of 2013, for example, nearly 29 percent of cardholders paid off their balances each month, up from 19.6 percent of cardholders in the first quarter of 2008.
The percentage of cardholders who carry a balance from month to month, meanwhile, has dropped by nearly 3 percentage points since early 2008. By the second quarter of 2013, just 41.6 percent of cardholders carried a balance from one month to the next.
Banks are also collecting less interest these days. According to the American Bankers Association, interest payments have fallen steadily since 2010.
That's partially because more people are paying off their balances each month, so banks have less to collect overall. It's also because issuers have been more stringent about who they give credit to, say analysts at the American Bankers Association.
The growth in "transactors" -- cardholders who pay off their balances each month -- "is a positive trend that suggests consumers are doing a better job of managing their credit cards," said the American Bankers Association's Kenneth J. Clayton in a statement.
Since 2008 credit crisis, credit card issuers have been exceptionally picky about the kind of cardholders they're willing to approve but have loosened their standards somewhat, according to Federal Reserve research.
However, new research from the American Bankers Association shows that card issuers still aren't being very welcoming to subprime applicants.
Currently, around 19 percent of all credit card accounts belong to consumers with subprime credit scores. That's down from around 27 percent of all accounts in 2009.
Far more credit card accounts, meanwhile, belong to consumers with the highest credit scores (known in credit circles as "super-prime" consumers). According to the American Bankers Association, more than half of all accounts -- around 52 percent -- belong to consumers with "super prime" scores. Four years ago, by contrast, less than half of all credit cards -- around 42 percent total - belonged to consumers with pristine credit.
Analysts at the American Bankers Association say that credit card issuers' overwhelming preference for cardholders with the best scores is notable considering that the economy has improved substantially since 2009.
"We're still exploring the factors behind the dramatic shift to low-risk accounts in the face of an improving economy and slowly easing credit standards," said the American Bankers Association's Clayton in a statement. "Regulatory restrictions on banks' ability to manage risk, the unsecured nature of credit cards and the after-effects of the recession all play a role."
Banks have also been stingier about cardholders' credit lines, new research shows. According to the American Bankers Association's latest report, for example, the average credit line for cardholders with excellent credit fell by just over 2 percent between the first quarter of 2013 and the second quarter. Average credit lines for people with blemished credit, meanwhile, shrunk by 1.5 percent.
Published: December 18, 2013
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