Rate survey: Average card APR remains unchanged at 16.41 percent

Kelly Dilworth
Personal finance writer
Specializing in new trends in credit

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Interest rates on new credit card offers held still this week, according to the CreditCards.com Weekly Credit Card Rate Report.

CreditCards.com evaluated the APRs, annual fees and promotional terms of 100 of the most popular U.S. credit cards. None of the cards included in the weekly rate report advertised new rates. Lenders also left unchanged promotional terms, such as introductory APRs and 0 percent balance transfer offers.

However, one card included in the weekly rate report advertised a slightly lower annual fee. Chase reduced the annual fee on its Marriott Rewards Premier card to $85 (waived the first year) after temporarily increasing it to $99. It left the Marriott card’s APR range, which starts at 17.24 percent and maxes out at 24.24 percent, alone.

Average rates on new credit card offers are currently at their highest point in more than a decade. When CreditCards.com first began checking interest rates in June 2007, the average card APR stood at 13.15 percent.

Interest rates have spiked over the past two years as the Federal Reserve gradually increases its benchmark interest rate. When the Federal Reserve alters interest rates, most variable rate cards follow suit. Since Dec. 1, 2015, when the Fed started raising rates, the average card APR has climbed from 14.96 to 16.41 percent.  

Late payments climb as card balances rise
Higher credit card interest rates haven’t scared people away from carrying more debt. According to research released Feb. 27 by the FDIC, credit card balances are continuing to grow.

The FDIC reported credit card balances at FDIC-insured banks expanded by $69.6 billion in the fourth quarter – up 8.8 percent from the previous three months.

Average credit lines also increased, said the FDIC, giving cardholders more room to charge bigger ticket purchases. For example, the FDIC found that the total amount of unused credit that cardholders still had available rose by 1.6 percent in the fourth quarter.

Last quarter’s uptick in unused credit indicates that card issuers have been much more generous in recent months about increasing cardholders’ credit limits and granting bigger limits to new customers.  

However, additional research conducted by the FDIC shows that some cardholders are having an increasingly hard time keeping up with their payments. The FDIC found that seriously late card balances (which haven’t been paid in 90 days or more) expanded by $1.2 billion in the last three months of 2017 – up 11.5 percent from the summer.

Research released earlier this month by the New York Federal Reserve supported this finding. It found that credit card balances grew significantly in the fourth quarter of 2017, but so did late payments. “The flow into 90-plus days delinquency for credit card balances has been increasing notably from the last year,” said the Fed in a Feb. 13 summary.

The Federal Reserve Bank of New York has previously sounded the alarm about a recent uptick in credit card bills that are late by 90 days or more. In an August 2017 blog post, it noted significant growth in the number of payments that are seriously delinquent is “potentially concerning, particularly in the context of a strong economy and low interest rates.”

Credit card lenders had been much more lenient in recent years about granting credit to cardholders with lower credit scores. However, research from the American Bankers Association shows that lenders have tried to limit serious delinquencies by granting more conservative credit limits to consumers with blemished records. 

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 16.41% 16.41%
16.14%
Low interest 13.14%
13.14% 12.88%
Cash back 16.67%
16.67%
16.37%
Balance transfer 15.63%
15.63%
15.37%
Business 13.93%
13.93%
13.68%
Student 15.92%
15.92%
15.70%
Airline 16.41%
16.41%
16.06%
Reward  16.51%
16.51%
16.23%
Instant approval 18.82%
18.82%
18.60%
Bad credit 23.62%
23.62%
23.46%
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. 28, 2018

See related: Historic credit card rates chart, Fed: Card balances up $2.4 billion in December 2017


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Updated: 12-10-2018