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Rate survey: Average card APR dips to 15.79 percent

By  |  Published: May 10, 2017

Kelly Dilworth
Personal Finance Writer
Specializing in new trends in credit

 

The national average APR for new credit card offers declined this week for the first time in nearly seven months, according to the CreditCards.com Weekly Credit Card Rate Report.

The average APR for new card offers dipped to 15.79 percent after hitting an all-time high of 15.80 percent last week.

Pentagon Federal Credit Union spurred this week’s rate change by clipping the minimum APR on the PenFed Promise Visa from 10.74 percent to 9.24 percent. This is the second time this month the credit union has revised rates on the Promise card. Last week, it increased the card’s minimum APR from 8.99 percent.

American Express also tinkered with rates this week. It increased the maximum APR on the Blue Cash Everyday card from 23.74 percent to 24.74 percent. The change didn’t affect the national average because CreditCards.com only considers a card’s lowest rate.

Issuers up the ante on premium rewards cards
As competition for new cardholders intensifies, credit card issuers are sweetening their rewards packages and offering unprecedented perks to cardholders willing to pay a sizable annual fee. 

Last month, American Express added a bevy of new benefits to the American Express Platinum card after increasing the card’s annual fee to $550. For example, Platinum cardholders are now eligible to receive up to $200 worth of Uber credits every year to help pay for transportation and will also earn a higher bonus on flights and hotel purchases booked directly through American Express.

Meanwhile, Chase announced this week that new and current Sapphire cardholders who close a mortgage with Chase Bank will be awarded an extra 100,000-point rewards bonus. All Sapphire cardholders will be able to take advantage of the massive bonus – worth up to $1,500 – including Chase Sapphire Reserve and Chase Sapphire Preferred cardholders.

As premium cards get more attention from value-seekers, other card issuers are also entering the super premium card market by offering cards with unusually generous benefits. For example, U.S. Bank recently introduced a super premium card called the Altitude Reserve Visa Infinite card that awards an unprecedented bonus on mobile purchases and showers new cardholders with generous travel credits and other benefits.

Card issuers are also luring new customers with increasingly high credit lines. According to new research from the credit agency TransUnion, the average credit limit for cardholders with the best credit scores has increased by nearly $4,200 since 2010. “The competition for super-prime consumers has become fierce, and we are seeing it manifest in higher total credit lines,” said TransUnion’s Paul Siegfried in a statement.

Open card accounts soar
In addition to offering better benefits on premium cards, issuers are also approving more applications and giving cards to a wider variety of cardholders.

For example, TransUnion estimates bank card ownership has reached its highest level in more than a decade as more consumers with subprime credit scores qualify for a new card. The credit agency estimates that more than 171 million people can now reach for a bank-issued credit card when they need to pay for something on credit.

Despite approving more cards, issuers aren’t nearly as generous toward consumers with lower credit scores, though. “Lenders have taken a cautious approach to re-entering subprime card lending by keeping credit lines lower,” said TransUnion’s Siegfried in a statement.

While average credit lines for cardholders with excellent credit have increased, average credit limits for consumers with less-than-perfect credit have declined, the credit agency found. 

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.79% 15.80%
15.18%
Low interest 12.66%
12.70% 12.00%
Cash back 15.89%
15.89%
15.33%
Balance transfer 15.07%
15.08%
14.41%
Business 13.66%
13.66%
13.12%
Student 13.92%
13.92%
13.42%
Airline 15.77%
15.77%
15.13%
Reward  15.88%
15.87%
15.24%
Instant approval 18.30%
18.28%
17.86%
Bad credit 23.23%
23.23%
22.86%
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.)
Source: CreditCards.com
Updated: May 10, 2017

See related: Fed: Banks ease grip modestly on cards in first quarter of 2017, Fed: Card balances rose $1.9 billion in March

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Updated: 08-20-2017

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