Rate survey: Average card rates fall to 15.12 percent

The national average interest rate on new credit card offers slipped Wednesday for the first time in two months, according to the CreditCards.com Weekly Credit Card Rate Report.

After steadily increasing for five weeks, the national average APR declined to 15.12 percent. It's the first time rates have fallen since November 2015.

Wal-Mart spurred this week's rate decrease by slashing the lowest available APR on the Wal-Mart MasterCard by 6 percentage points. Previously, cardholders were charged a flat APR of 22.9 percent. Now, cardholders with higher scores could be offered an APR as low as 16.9 percent.

Several issuers, including Chase, PNC Bank and Barclays, also increased rates on new card offers by 0.25 percent this week. These lenders were among the last major card issuers to alter rates in tandem with the Federal Reserve's December 2015 rate increase. After the Federal Reserve increased the federal funds rate by 0.25 percent, most card issuers passed that increase onto cardholders.

This week's interest rate increases were small, but they caused maximum rates on some offers to become perilously high. For example, the maximum APR on the Barclaycard Visa with Apple Rewards rose from 26.99 percent to 27.24 percent, while the maximum APR on the NFL ExtraPoints card rose from 24.99 percent to 25.24 percent.

For cardholders with less-than-perfect credit, those extra high rates could lead to dangerously high interest payments if cardholders carry a balance.

Bank card delinquencies tick up
As consumer debt obligations grow, a few more cardholders are falling behind on payments. According to the American Bankers Association, 30-day late payments on bank-issued credit cards inched up in the third quarter from 2.52 percent of accounts to 2.54 percent.

Credit card delinquencies -- late payments by 30 days or more -- are still near record lows. According to the ABA, the third quarter's modest increase in the delinquency rate could signal that more consumers are having a harder time keeping up with their finances.   

Consumers fell behind on several other types of loans as well, including personal loans, auto loans and home equity loans.

"Slower job and household income growth made for fewer improvements in delinquency rates," said the ABA's James Chessen in a Jan. 12 news release. "Fortunately, consumers remained disciplined in managing their debts, which has kept delinquencies close to historical lows."

Despite the third quarter's mild increase in delinquencies, Chessen expects that late payments will remain rare through 2016. "A good economy and lower delinquencies go hand in hand and the Fed is betting on a stronger economy in 2016," he said.

If cardholders do miss a bill payment, they won't have to pay more than $27 to $37 in fees, depending on how many times they've fallen behind. The maximum credit card late fee fell by $1 in 2016 after the Consumer Financial Protection Bureau adjusted the figure for inflation -- or in this case, a lack of it.

Credit card balances jump
Many cardholders are also carrying bigger balances, which could lead to more delinquencies down the road.

According to the Federal Reserve's latest consumer credit report, revolving debt, which is mostly made up of credit card debt, spiked by 7.4 percent in November after increasing by just 0.1 percent in October. It was the ninth consecutive month that credit card balances had grown.

According to the Federal Reserve's historical data, credit card balances are currently at their highest point in more than six years. 

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.12% 15.13%
Low interest 11.87%
11.84% 11.62%
Cash back 15.28%
Balance transfer 14.29%
Business 13.11%
Student 13.42%
Airline 15.15%
Reward  15.24%
Instant approval 18.16%
Bad credit 22.84%
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.)
Source: CreditCards.com
Updated: Jan. 13, 2016

See related: 5 ways to avoid (or deal with) late fees

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Updated: 03-21-2019