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Rate survey: Average card rates hold steady at 15.12%

Summary

Jan. 20, 2016: Average rates on new card offers remained unchanged this week, according to the CreditCards.com Weekly Credit Card Rate Report.

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Average rates on new card offers remained unchanged this week, according to the CreditCards.com Weekly Credit Card Rate Report.

Two cards included in the weekly rate report advertised slightly higher rates this week. However, the changes were too small to affect the national average. As a result, the national average remained fixed at 15.12 percent. The changes were big enough, though, to lift the average APRs of several card categories.

The minimum APR on the Credit One Visa Platinum card rose from 17.9 percent to 18.15 percent. The card’s maximum rate increased from 23.9 percent to 24.15 percent.

The APR on the Southwest Airlines Rapid Rewards Premier card also rose by 0.25 percent this week.

Those changes are in line with the rate hike most other major lenders have imposed since to the Federal Reserve’s December 2015 quarter point rate increase. Card issuers have quickly passed along that quarter-point rate hike to their customers. The increased rate applies to any balances caused by new purchases, and is also applied retroactively to existing balances.

Credit card spending continues to increase
Despite rising card APRs, consumers continue to reach for plastic more often, according to research released Jan. 19 by the financial services company Credit Suisse.

U.S. spending on Visa-branded credit cards jumped roughly 11 percent last quarter, while spending on Visa debit cards increased 7 percent. Meanwhile, U.S. spending on MasterCard-branded cards increased 8 percent, with spending on MasterCard debit cards up by 2 percent.

Spending on American Express cards jumped by roughly 4 percent in the fourth quarter.

According to Credit Suisse, consumers are not only charging more overall to their credit and debit cards, they are also swiping their cards more often. For example, at Chase, the total number of transactions the issuer processed jumped by 13.6 percent last quarter — up from a 7.3 percent increase in the fourth quarter of 2014. Meanwhile, U.S. Bank processed 4.4 percent more transactions last quarter.

Despite charging more overall, most consumers are also still managing to keep up with their bill payments.

According to a report released Jan. 19 by Experian and the S&P, defaults on bank-issued credit cards fell in December after increasing slightly the previous month. Missed payments on other types of loans, such as second mortgages and auto loans, also fell, indicating that consumers’ finances are in relatively good health.

“The consumer economy looks good,” said the S&P’s David Blitzer in a news release. “Consumer credit default rates are low and stable and consumer sentiment measures are upbeat.”

CreditCards.com’s Weekly Rate Report
Avg. APRLast week 6 months ago
National average15.12%15.12%15.00%
Low interest11.87%11.87%11.62%
Cash back15.23%15.28%15.27%
Balance transfer14.30%14.29%14.12%
Business13.11%13.11%12.85%
Student13.42%13.42%13.14%
Airline15.16%15.15%15.10%
Reward15.25%15.24%15.14%
Instant approval18.18%18.16%18.00%
Bad credit22.88%22.84%22.73%
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. 20, 2016

See related:Card balances spike 7.4 percent

What’s up next?

In Rate Report

Rate survey: Average card rates fall to 15.12 percent

Jan. 13, 2016: 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.

Published: January 13, 2016

See more stories
Credit Card Rate Report Updated: September 18th, 2019
Business
15.45%
Airline
17.38%
Cash Back
17.52%
Reward
17.39%
Student
17.58%

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