USA   |   UK   |   Australia   |   Canada
ADVERTISEMENT

Credit card interest rates rise for fourth straight week

By

Interest rates on new credit card offers tiptoed higher this week, according to the CreditCards.com Weekly Credit Card Rate Report, marking the fourth consecutive weekly increase.

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.35%
14.33%
12.98%
Low interest 12.04%
12.04% 11.97%
Cash back  12.63%
12.63%
12.49%
Balance transfer 12.93%
12.88%
12.09%
Business 12.96%
12.96%
10.74%
Student 13.96%
13.96%
14.51%
Airline 14.46%
14.46%
13.60%
Reward
14.57%
14.55%
13.42%
Instant approval 15.99%
15.99%
13.32%
Bad credit 20.32%
20.32%
13.74%
Methodology: The national average credit card APR is comprised of 95 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: 6-23-2010

The current stretch of annual percentage rate (APR) increases is the longest in more than a year and boosts the national average rate on new card offers to 14.35 percent.

Still reeling from the Credit CARD Act's regulations and stubbornly high unemployment, issuers remain cautious about lending, experts say. "The wounds from the recession remain fresh and competition for new cardholders is much more moderate and selective -- the 'new normal' is shaping up to be an environment with more-disciplined issuers as well as consumers," says John Grund, co-manager of the card issuing practive area of First Annapolis Consulting. "Most pre-recession and pre-CARD Act reference points are obsolete," Grund says. 

This week, Citi switched its CitiForward card's APR from a range of 12.99 to 20.24 percent to a single rate of 14.24 percent. Because CreditCards.com's rates calculations are based on the low end of any ranges, the change to a single rate was viewed as an increase. Citi didn't respond to requests for comment.

Citi's was the biggest move of the week, but it wasn't the only one. Navy Federal Credit Union continued to adjust its offers, slightly boosting rates on its Cash Rewards Visa card and the top end of the APR range for its Platinum MasterCard. While the credit union didn't provide a new comment, Navy Federal did point to its statement following card changes last week, which indicated that its card pricing is re-evaluated on an ongoing basis.

These card offer adjustment continue to make borrowing on plastic more expensive. For example, a typical cardholder who borrowed $5,000 on a credit card today and consistently paid $150 per month at today's average interest rate would have to pay $6,417 to pay off the debt. That's $182 more than would have been required six months ago. (Calculator: How long will it take to pay off your credit card balance?)

See related: Capital One move pushes APRs higher for 3rd straight week, Credit card lending standards keep tightening, Fed report says, Credit card reform arrives in the form of the Credit CARD Act, Calculator: How long will it take to pay off your credit card balance?Credit card rates: interactive graphic on APR changes

Published: June 23, 2010



Join the discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.

Three most recent Research, statistics stories:
  • Mobile payment statistics – Mobile payments are taking off, but how high will this technology fly? We sort through the best statistics on the evolving pay-by-phone industry ...
  • Complaints data show which cards pay refunds most, least often – A look at 14,000 credit card complaints sent to the federal consumer bureau shows big differences in how cards solve disputes ...
  • Gas card survey finds pedestrian rewards – When it comes to rewards, the most venerable of credit cards -- gas-brand cards -- remain stuck in the slow lane, with high APRs and limited paybacks. They remain useful for credit-building or a quick burst of savings ...

Share This Story




Follow Us!


Credit Card Rate Report

Updated: 03-31-2015

National Average 14.90%
Low Interest 11.62%
Business 12.85%
Student 13.14%
Balance Transfer 14.04%
Reward 15.04%
Airline 15.10%
Cash Back 15.28%
Instant Approval 17.93%
Bad Credit 22.48%

ADVERTISEMENT
ADVERTISEMENT