Rate Report

Rate survey: Credit card rates continue to rise slightly

Interest rates on new credit card offers ticked up this week, according to the Weekly Credit Card Rate Report.’s Weekly Rate Report
Avg. APRLast week 6 months ago
National average14.98%14.97%14.91%
Low interest10.40%10.40%10.40%
Balance transfer12.62%12.62%12.60%
Cash back14.47%14.43%14.45%
Instant approval15.49%15.49%15.49%
Bad credit23.64%23.64%23.41%
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: August 22, 2012

The national average annual percentage rate (APR) on new card offers rose to 14.98 percent Wednesday. However, the change in average rates was slight. The national average rose by just a hundredth of a percentage point, after remaining stuck at 14.97 percent for four straight weeks.

This week’s rise in rates was spurred by a small, single point rate hike on a student credit card. As a result, average rates on student cards went up slightly, from 13.02 percent to 13.16 percent.

Despite the hike in rates, however, students are still paying less to carry a balance today than they did several years ago. Before the Credit CARD Act of 2009 went into effect in February 2010, average rates on student cards hovered well above 14 percent. In fact, the highest recorded average on student cards hit 17.88 percent in the fall of 2007, according to data.

Since then, average rates on student cards have dropped significantly. However, those cards have also become much harder for students to get. That’s because the CARD Act sharply restricted students’ access to credit cards by requiring students under the age of 21 to show proof of income or persuade a co-signer to sign up for a joint card.

That reduced the number of eligible applicants for student cards. However, it also made it somewhat less risky for banks to lend to student borrowers because it forced students to show they had a way to pay their bills.

Average rates for student credit cards are now more than a full percentage point less than they were the week the CARD Act went into effect. However, student credit cards are still significantly more expensive than other comparable credit cards. For example, the average APR on a low interest credit card is 10.4 percent, while the average APR on a balance transfer card is 12.62 percent.

Many student credit cards offered online also feature wide APR ranges, which makes it tough for students to know how much interest they’ll actually have to pay once they apply for a card. For example, among the credit cards that tracks, the lowest available APR on a student card is 10.99 percent. However, that same card — the BankAmericard for students — also features a maximum APR of 19.99 percent.

The second lowest available APR for students is offered by State Farm Bank on the State Farm Student Visa Card. However, that card also features a wide APR range. For example, depending on a student’s creditworthiness, a student applying for the State Farm student card could get assigned an APR that’s as high as 18.24 percent or as low as 11.24 percent — a 7-point difference in possible APRs.

The higher maximum APRs on student credit cards aren’t reflected in the national average for student cards because only considers a card’s lowest possible rate when calculating rates.

That said, the average APR for students with less than perfect credit is currently 19.6 percent — more than six percentage points higher than the average APR for students with excellent credit.

See related:Want to leap back in to credit cards? 8 things to look at first

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