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Credit card rates unchanged, despite moves by Chase, Barclays

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Credit card interest rates remained unchanged this week, despite tweaks to card offers from Barclays and Chase.

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.71%
14.71%
14.43%
Low interest 11.98%
11.91% 12.18%
Cash back  12.48%
12.48%
12.63%
Balance transfer 12.88%
12.90%
12.93%
Business 12.91%
12.91%
12.96%
Student
13.31%
13.31%
13.96%
Airline 14.24%
14.30%
14.30%
Reward  14.35%
14.35%
14.73%
Instant approval 15.99%
15.99%
15.99%
Bad credit 24.95%
24.95%
20.32%
Methodology: The national average credit card APR is comprised of about 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: 1-12-2011

According to the CreditCards.com Weekly Rate Report, the national average annual percentage rate (APR) for new credit card offers was 14.71 percent. The average held steady for the second time in three weeks, as most banks remained in hibernation mode after a busy holiday season. At the beginning of November, rates shot up to a record high of 14.78 percent -- after steadily climbing for five out of six weeks -- as the credit card industry prepared for an uncertain season of holiday spending. Rates have remained high ever since, in spite of encouraging signs that the economy may be headed toward recovery in 2011.  

Only two cards saw APR increases this week. Last week, Barclays briefly tested a higher range for its U.S. Airways Premier World MasterCard, bumping it up to a range of 15.99 percent to 24.99 percent. However, the bank returned the card this week to its previous offer of 15.24 percent to 18.24 percent. Barclays didn't respond to a request for comment on the change.

Chase also tweaked its offer this week on the Chase Sapphire card, bumping the card's lowest offer up 1 percentage point to a flat 13.24 percent for all cardholders. This is the second time in a month that Chase experimented with a new rate for the card, having previously offered a flat 12.24 percent for all cardholders for most of 2010.

Responding to a request for comment on the change, Chase spokeswoman Gail Hurdis noted: "Our pricing reflects a multitude of factors that are relevant to our business, and we adjust it from time as we think it's appropriate for consumers and the company."

In spite of this week's rate changes, the national average remained unchanged after Chase's slight increase and Barclays's slight decrease effectively canceled each other out.

Some card terms improving, experts say
While interest rates have remained near record highs, there is still some reason to cheer, experts say. Cardholders with good credit or  are seeing some of the best card offers -- with more enticing perks, including longer introductory offers and better rewards -- than they have seen in years, according to Andrew Davidson, a senior vice president at the market research firm Mintel Comperemedia.

Not surprisingly, cardholders with  or  won't be as fortunate. "Issuers, for the most part, continue to focus on the most creditworthy consumers and competition for these customers is intensifying," said Davidson in an e-mail. Still, Davidson predicts that overall promotional mail volumes will increase this year as competition for new customers gets fiercer. 

The struggling economy -- including the country's sky high unemployment rate -- is often blamed for high rates and fewer card promotions. But two newly released reports paint a cautiously optimistic picture.

On Wednesday, the Federal Reserve released its latest beige book of economic conditions, and it reported anecdotal evidence of modest recovery in most regions of the United States.

The Conference Board's Employment Trends Index released Monday also painted a slightly rosier picture for 2011's employment outlook. The index, which lumps together eight labor market measurements, rose for the third month in a row.

The Conference Board's report appeared a week after the U.S. government issued a more sober assessment, pointing to disappointing hiring trends in the last month of 2010. In a statement released on Monday, Gad Levanon, Associate Director of Macroeconomic Research at the Conference Board, pointed to a mixed picture outlook for 2011. "The improvement in the Employment Trends Index in recent months suggests employment growth is likely to accelerate moderately in the first half of 2011," said Levanon in the statement. "While this is a welcome improvement, we don't expect employment to grow fast enough for the unemployment rate to dip below 9 percent for the rest of the year."    

See related: 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?

Published: January 12, 2011


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