Credit card interest rates fall to 14.91 percent

By's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.91% 14.92%
Low interest 10.37%
10.37% 10.37%
Cash back 14.91%
Balance transfer 12.86%
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: Dec. 31, 2014

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

The national average annual percentage rate (APR) fell to 14.91 percent Wednesday after a retail card in the editorial database was replaced with a lower rate card.

Occasionally, revises the cards in the editorial database in order to more accurately reflect the current card market. 

Average rates on new credit card offers are currently at their lowest point in more than two years. The last time the national average hit 14.91 percent was in July 2012.

For most of 2014, average rates hovered near record highs. For example, average rates remained at or above 15 percent for more than 10 straight months. As a result, the national average APR for 2014 ended at 15.02 percent -- up from 14.98 percent in 2013.

Sweeter offers
According to data, issuers made slightly more changes to card terms this year than in 2013.

The year 2013 saw the fewest card interest rate changes since began tracking terms in mid-2007. For 2014, issuers revised APRs somewhat more frequently, but the changes continued to be small. The national average APR, for example, has remained within a narrow range of 14.91 percent to 15.09 percent since Jan. 1. 

Healthier cardholders
Consumers, meanwhile, increased spending considerably in 2014, according to multiple reports, giving card issuers even more incentive to lure new customers. Cardholders also continued to manage their credit responsibly.

Late payments on credit cards, for example, hit another record low last month, according to Experian and S&P Dow Jones Indices' latest consumer credit report -- defying experts' predictions that credit card delinquencies would increase in 2014. "Default rates for bank credit cards are at their lowest levels since the series began in 2004," said S&P's David Blitzer in a statement.

As the year comes to an end, consumers are in a significantly better position to repay their debts, he noted. They are also more capable of spending larger amounts without becoming overextended.  "Key economic factors favor the consumer: oil and gasoline prices are down, debt service ratios -- the proportion of income the average household uses to cover debt payments -- are close to record lows, inflation is low and the economy is finally seeing hints of wage growth."

In addition, consumers are feeling considerably better about their finances, according to multiple reports, which bodes well for future spending. According to Gallup's latest Economic Confidence Index, Americans' confidence in the economy is up as well, with the Index currently at its highest point in six years as Americans report feeling increasingly bullish about the economy's growth. 

"U.S. consumers' attitudes are ending the year on a high note," wrote Gallup's Andrew Dugan in a news release. "And, judging from past years, economic perceptions are more likely than not to continue to improve."

See related: Fed: Countdown to higher rates continues at 'patient' pace

Published: December 31, 2014

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