Rate survey: Credit card rates rise to record high
By Kate Tomasino | Published: September 1, 2011
|CreditCards.com's Weekly Rate Report|
|Avg. APR||Last week||6 months ago|
|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: September 1, 2011|
The average annual percentage rate (APR) on new credit card offers hit 14.94 percent, topping the previous record of 14.91 set in early July. It's the second straight week that the average has increased. That hasn't happened since November 2010, when it went up for four consecutive weeks.
The move also caused two card categories we track to rise. The cash back category shot up to a record high of 14.34 percent, up from 14.16 percent the previous week. The rewards card category jumped to 14.57 percent from last week's 14.52 percent. The current rewards card average is the highest since August 2010.
This week's increase was prompted by Citi discontinuing its Phillips66 - Conoco - 76 MasterCard, which carried an APR of 19.99 percent to 23.99 percent. We removed the card from our database and replaced it with a card from another major gas retailer: the Shell Platinum Select MasterCard, which is also issued by Citi. That card carries a single APR of 23.99 percent -- significantly higher than the overall national average. Since we use a card's lowest available rate in our calculations, the swap bumped the national average higher.
"The co-branded Phillips 66-Conoco-76 MasterCard Program will be closed to focus on the growth of the ConocoPhillips Personal Card program," Citi spokeswoman Elizabeth Fogarty said. "Cardholders with a Phillips 66-Conoco-76 MasterCard may continue to use their card until they are notified of the program closure."
The ConocoPhillips Personal Card is what's called a closed-loop card. It is not co-branded -- meaning it does not bear the logo of a credit card network such as Visa, MasterCard, American Express or Discover -- and it can only be used at Phillips 66, Conoco or 76 gas stations. The previous card could be used wherever MasterCard was accepted.
CreditCards.com only includes co-branded cards in our tracking database.
Fogarty also confirmed the introduction of the Shell Platinum Select MasterCard. She said the card will be launched in full on Sept. 1. However, CreditCards.com saw a website that had already begun accepting applications for the card. The Platinum Select card replaces the Shell Platinum MasterCard, a similar card which was discontinued earlier this year.
Citi wasn't the only creditor making moves this week. American Express raised the top end of one of its rewards cards. Their Blue card previously carried an APR range of 15.24 percent to 19.24 percent. It now offers a range of 15.24 percent to 20.24 percent. Since only the top end of the range was adjusted, it did not affect the national APR average.
American Express spokeswoman Leah Gerstner confirmed the change but emphasized that pricing is based on a consumer’s overall creditworthiness. That's an important consideration to take into account when looking for the best credit card deals. The better understanding you have of your credit score, the less likely you are to be surprised by a high rate on a new credit card
See related: An interactive guide to the Credit CARD Act
Three most recent Reward programs stories:
- How credit cards take a bite out of gas prices – Bonus points, cash back or cents off per gallon of gasoline add up ...
- 4 fine-print traps to watch out for in credit card rewards programs – Making assumptions on how your rewards card program works can lead to disappointing discoveries ...
- Fund your football fandom with credit card rewards – Being a football fan can be pricey, but credit card rewards, cash back and other perks can help you save ...
Did you like this story? Then sign up for CreditCards.com’s weekly e-newsletter for the latest news, advice, articles and tips. It's FREE. Once a week you will receive the top credit card industry news in your inbox. Sign up now!