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Rate survey: Average card rate rises to 15.13%

Summary

Jan. 27, 2016: Average rates on new card offers inched higher this week, according to the CreditCards.com Weekly Credit Card Rate Report

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

The national average annual percentage rate rose to 15.13 percent Wednesday after two cards in the CreditCards.com database posted slightly higher interest rates.

Capital One narrowed the range of possible APRs on the Sony credit card by increasing the card’s lowest APR from 14.15 percent to 14.24 percent and reducing its maximum APR from 25.15 percent to 24.99 percent. This is the second time this month Capital One has altered interest rates. It previously increased both APRs on the Sony card by 0.25 percent in response to the Federal Reserve’s December rate increase.

Fifth Third Bank was also active. It raised the Fifth Third Platinum card’s minimum interest rate from 10.99 percent to 11.24 percent and increased the card’s maximum rate to 24.24 percent.

Of the 100 cards in the CreditCards.com database, 80 cards have increased APRs by 0.25 percent since the Fed’s rate hike.

Mobile payments security fears, roadblocks
As chip-based credit card payments slow down checkout lanes and cause confusion at the cash register, some analysts predict frustrated cardholders will start reaching for their phones instead.

Now that cardholders can no longer quickly swipe their cards and go, they may become more open to other forms of payment, said technology researcher Penny Gillespie in an interview with the Los Angeles Times published Jan. 18. “We’re curious to see if this gives more impetus to consumers to make another behavior change.”

Cardholders interested in mobile payments are also likely to have more choices in the near future as more retailers and other merchants start accepting mobile payments. The L.A. Times also reported some retailers may also use the conversion to chip-based credit card payments as an opportunity to upgrade their technology so they also accept phone-based payments.

Swift adoption of mobile payments could stall, though, if consumers continue to question whether mobile payments are truly reliable.

According to a January 2016 report from the Pew Charitable Trusts, many remain concerned about mobile payment safety and are unsure whether it’s worth the added convenience.

Pew organized focus groups in Atlanta, Chicago, San Jose, California, and Tampa, Florida, consisting of mobile payments users, smartphone users who currently have a bank account, and smartphone users who don’t have a bank account.

According to the Pew report, the focus groups found many potential mobile payment users were still highly worried about how the payment industry handles data security. In addition, many consumers admitted they didn’t know what personal details were being collected when they used their phones to shop.

That said, many smartphone users said discounts and mobile-exclusive offers could entice them to pay with a phone rather than cash or a card. Current mobile payments users also said that “convenience and speed” were key factors in persuading them to use their phones.

“Our conversations with consumers demonstrated the potential of mobile payments but also the barriers that will need to be overcome if this potential is to be fully realized,” said Pew’s Susan Weinstock in a Jan. 25 news release.

CreditCards.com’s Weekly Rate Report
Avg. APRLast week 6 months ago
National average15.13%15.12%15.00%
Low interest11.88%11.87%11.62%
Cash back15.23%15.23%15.27%
Balance transfer14.30%14.30%14.12%
Business13.11%13.11%12.85%
Student13.42%13.42%13.14%
Airline15.16%15.16%15.10%
Reward15.25%15.25%15.14%
Instant approval18.18%18.18%18.00%
Bad credit22.88%22.88%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. 27, 2016

See related:What interest rate increases will cost consumers, Quarter-point interest rate calculator

What’s up next?

In Podcasts

Rate survey: Average card rates hold steady at 15.12%

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

Published: January 20, 2016

See more stories
Credit Card Rate Report Updated: April 20th, 2019
Business
15.32%
Airline
17.50%
Reward
17.56%
Cash Back
17.60%
Student
17.79%

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