Rate Report

Rate survey: Credit card interest rates stuck at 15 percent


Oct. 3, 2012: Interest rates on new credit card offers remained at 15 percent on Wednesday, according to the Weekly Credit Card Rate Report

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Interest rates on new credit card offers remained at 15 percent on Wednesday, according to the Weekly Credit Card Rate Report.’s Weekly Rate Report
Avg. APRLast week 6 months ago
National average15.00%15.00%14.96%
Low interest10.40%10.40%10.40%
Balance transfer12.62%12.62%12.58%
Cash back14.47%14.47%14.45%
Instant approval15.49%15.49%15.49%
Bad credit23.64%23.64%23.64%
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: Oct. 3, 2012

After hovering just below 15 percent for two consecutive months, the national average annual percentage rate (APR)  on new card offers has stayed at 15 percent for the past three weeks.

PenFed’s unconventional offer
None of the cards featured significant rate changes this week. However, one issuer, the Pentagon Federal Credit Union, introduced a unique promotional offer to each of its credit cards.

Rather than offer a short-term zero percent APR on any purchase, as most issuers do, PenFed is introducing a short-term introductory APR that restricts how and where applicants can use it.

According to the issuer’s online promotion, qualified applicants for any PenFed credit card, such as the PenFed Visa Platinum Cash Rewards card, will now be able to make interest-free purchases for six months. However, they will only be able to use that interest-free offer on electronics at preapproved retailers.

The issuer added the offer as a supplement to its existing promotional offers, rather than as a replacement, so applicants for certain cards will still get a promotional rate on other purchases. For example, applicants who apply for the PenFed Promise card will still qualify for an introductory APR of 7.49 percent on all other purchases for 36 months.

This is the second time this year that PenFed has introduced an uncommon promotion to its credit card offerings. For example, in April, the issuer began offering a reduced APR on balance transfers for the full life of the balance, rather than for a set period of time. Most balance transfer offers, by contrast, offer an introductory APR on balance transfers for a specified period, such as six to 12 months.

PenFed is also one of the only issuers tracked by that has made substantial changes to its card promotions this year. Instead, for much of the year, most issuers have left promotional offers on new credit cards alone, rather than experiment with fresh offers.

Consumer mood: Better days coming, but not here yet

Experts say that issuers are remaining cautious due to tepid consumer spending and an uncertain economic recovery.

Consumers have shown significantly more optimism in the month of September, according to multiple reports, giving issuers reason to hope that cardholders will eventually spend more heavily. But that’s down the road. For now, consumers plan to cut back on discretionary purchases, according to a report by Discover released Wednesday.

Consumers stayed dour most of the summer, though substantial number said that they expected their own personal finances to get a boost in the near future, according to the Discover U.S. Spending Monitor. What extra money comes in now won’t go to discretionary purchases such as entertainment or home upgrades. Instead, a slightly larger number of consumers expect to use some of that money to pay for rising household expenses, such as pricier food and gas.

According to the report, about half of consumers say they plan to spend less on unnecessary purchases next month, while 45 percent of consumers say they think they’ll have to spend more just to keep their households running as usual.

That determination to pull back on discretionary purchases is bad news for credit card issuers, who hoped to see consumers spending more substantially on their cards.

Issuers still have reason to be optimistic. The report also found that a moderately larger number of consumers think the economy will soon improve. Experts say that rising consumer confidence often translates into a bump in consumer spending.

Consumers in the highest income brackets were the most optimistic about the economy’s chances at a substantial recovery, while consumers making less than $40,000 were among the most pessimistic, according to the report.

See related:American Express to refund $85 million to 250,000 customers

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Credit Card Rate Report Updated: July 10th, 2019
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