The average annual percentage rate (APR) on new credit card offers remained unchanged at 14.65 percent for the second straight week, according to CreditCards.com’s Weekly Rate Report.
|CreditCards.com’s Weekly Rate Report|
|Avg. APR||Last week||6 months ago|
|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.)|
Card issuers are still tweaking rates and offers, however. For example, we found that Citi recently began offering multiple APRs for its Forward card, varying between a single rate of 14.24 percent and a range of 12.99 percent to 19.99 percent. However, since only the low ends of the ranges are included in our calculations, Citi’s move did not impact the national average.
Citi declined to comment on the move.
According to Lauren Guenveur, a study director at direct-mail marketing research firm Synovate, many issuers are choosing to offer multiple interest rates for new credit card offers.
In the fourth quarter of 2010, about a quarter (24 percent) of credit card offers through the mail included APRs expressed as a range, Guenveur said. “That is a slight increase from the first quarter of 2010 at 19 percent.”
Offering multiple APRs is a common approach for card issuers today, but began to take off in 2009, according to Lisa Hronek, research supervisor at Mintel Comperemedia. Hronek added she, too, is seeing an increase in issuers tweaking offers.
“Citi began testing offers with multiple APRs in late 2009 and then increased that volume in the second half of 2010,” Hronek said. “Capital One began sending offers with multiple APRs in the fourth quarter of 2010. Disclosing multiple APRs has been part of Discover’s strategy since early 2009 and was consistent through the end of 2010.”
According to Hronek, Bank of America frequently offered multiple APRs beginning in 2009. However, by the end of 2010, the company’s mailings most often featured a single rate.
The differences between a single APR versus a range are often considerable — as is the case with the Citi Forward card — and drive home the importance of consumers shopping around for the best deals.
These changes haven’t spurred much movement in the national average, however. For six of the first 12 weeks this year, the national average stayed static. According to CreditCards.com data, the number of times the national average has remained unchanged has increased steadily from year to year. In 2007, when CreditCards.com started tracking APRs, the national average never stayed in one place. By 2010, it was unchanged 11 times, and this year, it’s on pace to far surpass that number.