Rate survey: Average card APR stays put at 16.41 percent

Kelly Dilworth
Personal finance writer
Specializing in new trends in credit

The average credit card interest rate remained at a record high Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report.

CreditCards.com evaluated the APRs and promotional terms of 100 of the most popular U.S. credit cards and found credit card APRs for all 100 cards remained unchanged this week. Introductory teaser rates were not included in the calculation.

None of the card issuers monitored by CreditCards.com advertised new interest rates. As a result, the national average card APR registered at 16.41 percent for the second straight week.

Issuers also left promotional terms, such as interest-free balance transfer offers and introductory purchase rates, unchanged.

Average card rates are currently at their highest point since CreditCards.com began tracking rates in mid-2007. A year ago, the average card APR stood at 15.44 percent. Three years ago, it registered at just 14.89 percent.

The national average has climbed steadily over the past few years as the Federal Reserve gradually increases interest rates. Each time the Federal Reserve boosts its benchmark interest rate, most U.S. credit cards increase card APRs by the same amount.  

Credit card interest rates are likely to keep rising over time – particularly since issuers rarely trim interest rates. The average card APR, for example, has declined just three times over the past year.

Fed: Lenders still depend on consumers to spot fraud

Credit card issuers invest a substantial amount of money into detecting and preventing credit card fraud. But a new report from the Federal Reserve Bank of Minneapolis says lenders still need cardholders to monitor their credit card statements and flag unauthorized payments.

The Fed surveyed 283 financial institutions around the country and found that credit and debit card fraud is still a big problem. For example, 77 percent of credit card issuers lost money to card fraud in 2016; so did 96 percent of debit card issuers.

Credit and debit cards that allow signatures rather than PINs to authorize payments are among the most popular targets for thieves, the survey found. 

Lenders have stopped many unauthorized transactions from going through by blocking payments made from high-risk countries. But the Federal Reserve said lenders still rely heavily on customers to spot unauthorized transactions in order to mitigate losses.

According to the Fed, giving consumers access to their transaction histories so that they can comb through their payments and spot unauthorized charges is one of the most effective ways to combat fraud.

Equipping cards with EMV chips has also been shown to be effective in curbing certain types of fraud. EMV-enabled payments made at a store or restaurant are more technologically secure than payments made by swiping a magnetic stripe. But now that it’s harder for fraudsters to make unauthorized payments in person, card thieves increasingly are turning to online and telephone payments that can be made without a physical card, additional research has found. 

Identity theft is on the rise

According to a report released this month by Javelin Strategy and Research, identity theft has surged to a record high, affecting nearly 17 million consumers.

The survey found credit cards are still a key target for fraudsters; but the increased prevalence of chip-enabled payments has made in-person fraud less popular. Instead, the survey found that fraudsters are increasingly finding success online. Fraudsters are also turning to other payment targets, such as opening sham PayPal and Amazon accounts.

Record-setting data breaches have also helped fuel the rise in identity theft, experts say.

“2017 was a runaway year for fraudsters, and with the amount of valid information they have on consumers, their attacks are just getting more complex,” said Javelin Strategy and Research’s Al Pascual in a news release. “Fraudsters are growing more sophisticated in response to industry’s efforts to implement better security.”

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 16.41% 16.41%
Low interest 13.14%
13.14% 12.87%
Cash back 16.67%
Balance transfer 15.63%
Business 13.93%
Student 15.92%
Airline 16.41%
Reward  16.51%
Instant approval 18.82%
Bad credit 23.62%
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: Feb. 14, 2018

See related: Historical credit card rates chart, US cities with heaviest credit card debt burden: San Antonio leads, San Francisco has least

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Updated: 12-15-2018