Rate survey: Credit card APRs unchanged as holidays near
But recent trends show that rates may trend back up
|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: Nov. 23, 2011|
Interest rates on new credit card offers remained unchanged this week as banks took their traditional Thanksgiving break from changing rates, according to the CreditCards.com Weekly Credit Card Rate Report.
The average annual percentage rate (APR) stayed put at 14.99 percent. That's just 0.01 percent shy of the record high -- 15 percent -- set in October. And while rates remain high, they appear to be stabilizing. The national APR average has stood at 14.99 percent for five of the past six weeks. That is a big change from August to mid-October when rates steadily inclined and records were consistently broken.
Interest rate stability at this time of year is nothing new, though. Since 2007, when CreditCards.com began tracking APRs, rates have typically remained stable around Thanksgiving. It may not last, though: For the past two years, interest rates made a significant jump just before Christmas.
- In 2009, the national APR average was fixed at 12.71 percent the week before and after Thanksgiving. Then, the week before Christmas, it jumped to 12.99 percent -- the third-highest rate for that year.
- In 2010, the national APR average stayed put at 14.74 percent in the weeks before and after Thanksgiving. It dropped in subsequent weeks, falling to 14.63 percent, but then climbed back to 14.68 percent the week before Christmas.
Creditors know people spend more during the holidays and may want to apply for more credit to supplement their spending. This may be especially true as consumers are expected to be buying but and sticking to their holiday budgets less this year, reports a recent USAA survey.
This year, slightly more people are expected to buy gifts compared to last year -- up 96 percent from 90 percent. The report also indicates that the number of those planning to create a holiday gift budget has declined over the past three years, and of people who do plan to create a budget, slightly fewer plan to stick to it this year than did last year. In addition, a large number of respondents aren't saving in advance at all to pay for holiday purchases -- 36 percent.
All of that could mean more credit card debt to wrestle with in the new year. With that in mind, make a budget and stick to it this holiday season. And if you do intend to get that new card, be aware of high interest rates when you apply.
See related: Don't make a false start this shopping season: Budget, Calculator: How long will it take to pay off your credit card balance?, Infographic: Americans plan to ramp up holiday spending in 2011
- Do's and don'ts when giving teens their first credit card – Decide whether it's time, then help your teens use cards wisely, and put checks in place if they don't ...
- Q&A: Leah Ingram on college costs and credit – Author Leah Ingram and her husband got their credit in shape before taking out loans to send their daughters to college ...
- Sending kids off to college with a rewards credit card – Sending your kids off to college using a rewards credit card can help you earn rewards points while teaching your kid how to be financially responsible ...