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Rate Report

Survey: Average card rate remains locked at 15.16 percent for 8th week

Summary

March 30, 2016: For the eighth week in a row, the average credit card interest rate remained stuck at 15.16 percent, according to the CreditCards.com Weekly Credit Card Rate Report.

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For the eighth week in a row, the average credit card interest rate remained stuck at 15.16 percent, according to the CreditCards.com Weekly Credit Card Rate Report.

Most of the cards tracked by CreditCards.com remained unchanged this week. Chase added a maximum annual percentage rate of 23.24 percent to the United Mileage Plus Explorer credit card. Previously, the airline card only charged a single APR of 16.24 percent.

However, the rate hike didn’t affect the national average because CreditCards.com only considers a card’s lowest available rate when calculating average interest rates. This is the second week in a row Chase has expanded the range of APRs on one of its cards.

Interest rates on new credit card offers are currently near record highs. The national average APR hasn’t dipped below 15.16 percent – a near record – since January. Meanwhile, rates have floated above 15 percent for 15 straight weeks.

The Federal Reserve spurred the higher rates last December when it increased the federal funds rate for the first time in a decade. When the federal funds rate rises, the interest rates on variable rate loans automatically increase.

Federal Reserve signals that it may wait to raise rates

The Federal Reserve is expected to raise rates again later this year. However, cardholders may get a temporary reprieve from higher rates if global economic trends continue to hamper U.S. growth.

Federal Reserve policymakers are scheduled to meet April 2627 to discuss monetary policy and consider another rate increase. After the Fed left rates alone at its last policy meeting, some analysts predicted the Fed would increase rates as soon as April if economic indicators, such as job openings, continued to show relatively robust growth.

Two Federal Reserve officials who aren’t voting members of the Federal Open Market Committee also expressed optimism that the economy is currently strong enough to inspire the Fed to raise rates, according to multiple reports. “There is sufficient momentum evidenced by the economic data to justify a further step at one of the coming meetings, possibly as early as the meeting scheduled for next April,” said Federal Reserve Bank of Atlanta president Dennis Lockhart in a statement quoted by Bloomberg.

San Francisco Federal Reserve president John Williams also made a similar assessment in a March interview with Market News International. “All else equal, assuming everything else is basically the same and the data flow continues the way I hope and expect, then April or June would definitely be potential times to have an increase in interest rates,” said Williams in the interview.

Recent remarks from Federal Reserve chairwoman Janet Yellen, however, threw cold water over some analysts’ more optimistic assessments. In a March 29 speech at the Economic Club of New York, Yellen indicated that the Fed might wait at least a few more months before it raises rates.

Yellen said the Federal Reserve plans to continue gradually raising interest rates as planned, but cautioned that the timing of the Fed’s rate increases could change if policymakers decide the economy is too weak. Yellen also signaled that current economic trends – including softer growth around the world and sluggish price increases – might warrant a slower approach than policymakers predicted.

“On balance, overall employment has continued to grow at a solid pace so far this year, in part because domestic household spending has been sufficiently strong to offset the drag coming from abroad,” said Yellen in prepared remarks. “Looking forward, however, we have to take into account the potential fallout from global and financial economic developments, which have been marked by turbulence since the turn of the year.”

If the Federal Reserve does decide to increase interest rates, the uptick likely will be small again. The last time the Fed increased rates, it only raised them by a quarter of a percent.

CreditCards.com’s Weekly Rate Report
Avg. APRLast week 6 months ago
National average15.16%15.16%15.00%
Low interest11.96%11.96%11.62%
Cash back15.21%15.21%15.27%
Balance transfer14.36%14.36%14.12%
Business13.12%13.12%12.85%
Student13.42%13.42%13.14%
Airline15.17%15.17%15.10%
Reward15.26%15.26%15.14%
Instant approval18.04%18.04%18.00%
Bad credit22.56%22.56%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: March 30, 2016

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Credit Card Rate Report Updated: May 23rd, 2019
Business
15.61%
Airline
17.50%
Cash Back
17.60%
Reward
17.62%
Student
17.79%

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