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Rate survey: Average card APR climbs to all-time high of 17.47 percent

Summary

January 16, 2019: The average credit card interest rate soared to another all-time high Wednesday after several card issuers pushed up rates.

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The average credit card interest rate soared to another all-time high Wednesday after several card issuers pushed up interest rates. According to the CreditCards.com Weekly Credit Card Rate Report, the national average APR now sits at 17.47 percent – more than a full percentage higher than where it stood last year.

At least six card issuers monitored by CreditCards.com hiked rates this week. Some issuers, such as PNC Bank and HSBC, increased rates by a quarter of a percent in tandem with the Federal Reserve’s December 2018 rate hike. When the Fed increases interest rates, most card issuers hike rates by the same amount.

Bank of America, U.S. Bank tweak rewards, APRs

Other lenders, such as Bank of America and U.S. Bank, hiked rates by significantly more.

Bank of America, for example, increased rates on its line of cash back cards by three quarters of a percentage point. Affected cards included the Bank of America Cash Rewards credit card, the World Wildlife Fund card and the MLB Cash Rewards Mastercard.

The cash back cards now advertise a range starting at 16.24 percent and maxing out at 26.24 percent. Previously, cardholders were charged 15.49 percent to 25.49 percent.

In addition to the rate hikes, Bank of America also redesigned the rewards program on its signature no-annual-fee cash back cards, giving cardholders significantly more choice with their rewards.

Cardholders can now choose the spending category they’d like to receive 3 percent cash back for, such as gas, online purchases, restaurants, travel, drug stores or home improvement. Previously, cardholders were only offered 3 percent cash back on gas. Cardholders will also continue to get 2 percent cash back at grocery stores and wholesale clubs – up to a combined total of $2,500 in spending per quarter.

U.S. Bank was also busy this week, tailoring the APRs on select cards. U.S. Bank increased the minimum APR on its lowest rate credit card, the U.S. Bank Visa Platinum Card by more than 2 percentage points. It also increased the card’s maximum APR by 1.5 percentage points. U.S. Bank applicants who are looking for a lower rate, plain vanilla credit card with a lengthy introductory offer are now assigned an APR ranging from 14.74 percent to 25.74 percent.

In addition, U.S. Bank modified the maximum APR on the U.S. Bank Cash+ Visa Signature Card. Cardholders are now offered a range starting at 16.24 percent and maxing out at 25.74 percent. Previously, the highest possible APR on the Cash+ Visa card was 25.24 percent.

None of the cards included in the weekly rate report advertised new promotions this week. Every week, CreditCards.com evaluates the APRs, annual fees and promotional terms of 100 U.S. credit cards.

Aside from matching the Federal Reserve’s rate hikes, most card issuers have largely chosen to leave card offers alone so far.

See related:Historic credit card interest rates chart

Card spending slows for some issuers

Despite higher rates on credit cards, credit card usage and revolving debt have continued to expand. However, new data released this month by card issuers indicates some consumers may be starting to pull back.

Several card issuers reported this month that credit card purchase volume grew in the fourth quarter of 2018 – but not as fast as it grew the previous three months.

J.P. Morgan Chase reported in its latest earnings release that credit card sales volume increased by roughly 10 percent in the last quarter of the year, compared to 12 percent in the third quarter.

Meanwhile, purchase volume at Wells Fargo rose by around 5 percent year-over-year in the fourth quarter. In the third quarter, it had grown by roughly 7 percent.

At Citi, card-funded sales increased by roughly 6 percent during the holidays. In the third quarter, it had jumped by around 8 percent.

According to Bloomberg, the weaker sales volume surprised analysts who had expected cardholders to charge more during the holiday season.

CreditCards.com’s Weekly Rate Report

Avg. APR Last week 6 months ago
National average17.47%17.41%16.93%
Low interest14.52%14.40%13.83%
Cash back17.56%17.49%17.15%
Balance transfer16.67%16.59%16.17%
Business15.07%15.05%14.57%
Student17.79%17.79%16.48%
Airline17.32%17.32%16.84%
Rewards17.42%17.38%17.00%
Instant approval19.97%19.97%19.20%
Bad credit24.96%24.96%23.90%
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. 16, 2019

What’s up next?

In Rate Report

Rate survey: Average card APR remains at record high of 17.41 percent

January 9, 2019: The average credit card interest rate stayed put Wednesday, remaining at an all-time record high.

Published: January 9, 2019

See more stories
Credit Card Rate Report Updated: June 19th, 2019
Business
15.61%
Airline
17.54%
Cash Back
17.68%
Reward
17.57%
Student
17.79%

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