Rate survey: Average card APR climbs to new high of 16.65 percent

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The average credit card interest rate smashed another record Wednesday, climbing to an all-time high of 16.65 percent, according to the CreditCards.com Weekly Credit Card Rate Report.

CreditCards.com reviewed the APRs, annual fees and promotional terms of 100 of the most popular U.S. credit cards. Two of the credit cards included in the weekly rate report advertised higher rates this week.

HSBC unveiled the largest rate change this week. It increased the HSBC Advance Mastercard’s lowest available interest rate from 14.24 percent to a minimum APR of 16.49 percent – a more than 2-point difference. The rate hike caused the HSBC rewards card to go from offering a below average interest rate for cardholders with excellent credit to offering a rate that’s more in line with the national average. HSBC also bumped the card’s maximum APR up from 18.24 percent – which was also well below average for a general-purpose rewards card – to a high of 20.24 percent.

Meanwhile, PNC increased the APR on its points rewards card for business cardholders. However, the rate increase was only by a quarter of a percent so it didn’t substantially affect the national average.

The average card APR is expected to keep rising over the next several weeks as more card issuers match the Federal Reserve’s March 2018 rate hike. When the Federal Reserve alters its benchmark interest rate, most variable rate cards change rates by the same amount.

The majority of card issuers monitored by CreditCards.com have already increased rates by 0.25 percent. However, some large issuers have yet to revise rates on new offers. Once those card APRs increase, the national average APR is likely to break another record.

Many consumers perplexed by their travel rewards programs

As card issuers compete for new customers, rewards programs are becoming increasingly generous. For example, many travel rewards cards now offer sign-up bonuses and travel credits worth hundreds of dollars in free travel.

American Express, for example, just announced this week that it will debut a new super premium travel card – the Starwood Preferred Guest Luxury card – this summer that offers a $300 statement credit for hotel luxuries such as spa trips and hotel restaurant meals, an annual free night’s stay at a high-end Starwood or Marriott hotel and other high value perks. Meanwhile, a number of travel cards now offer three-figure travel credits and other high-end luxuries, while less expensive travel cards are showering customers with free Wi-Fi, preferred boarding and other perks.

But as travel cards get more generous, many consumers are still struggling to make sense of their rewards programs. According to a new survey commissioned by NextAdvisor, nearly half of consumers – 44 percent – say they’re “confused” by their credit card rewards programs. Meanwhile, 54 percent find frequent flyer programs hard to decipher and 47 percent are befuddled by hotel loyalty programs. The survey polled more than 2,000 adult consumers about their rewards knowledge.

Consumers not only struggle to redeem their credit card and travel loyalty rewards, but they also have a hard time keeping track of what they’ve earned. For example, 35 percent of consumers don’t know how many credit card rewards points they have available. Twenty-four percent say they haven’t learned yet how to claim the rewards they’ve earned.

Cardholders are less likely to let their credit card rewards points expire, however. Just 25 percent report giving up card rewards that have passed the card issuer’s deadline – perhaps because many issuers offer longer deadlines or have dropped expiration dates altogether. However, a substantial number of frequent flyers and hotel loyalty members – 40 and 42 percent respectively – admit to forfeiting miles and hotel loyalty points that have passed their expiration dates.

“By not redeeming miles, rewards or loyalty points, consumers are literally leaving money on the table,” said NextAdvisor analyst Julie Myhre-Nunes in a news release. “That’s why it’s important for you to take the time to find the programs and credit cards that best suit your needs.  If travel programs are confusing to you, a cash back card, especially one that earns a flat cash back rate like the Citi Double Cash credit card or Wells Fargo Cash Wise Visa Card, might be a simpler option to reap some rewards.”

CreditCards.com's Weekly Rate Report

  Avg. APR Last week 6 months ago
National average 16.65% 16.62%
16.15%
Low interest 13.48%
13.42% 12.89%
Cash back 16.90%
16.90%
16.40%
Balance transfer 15.87%
15.84%
15.38%
Business 14.32%
14.30%
13.68%
Student 16.14%
16.14%
15.70%
Airline 16.59%
16.59%
16.07%
Rewards 16.75%
16.72%
16.24%
Instant approval 18.97%
18.97%
18.60%
Bad credit 23.74%
23.74%
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: April 18, 2018

See related: Historic credit card rates chart, Chase to launch new Marriott Rewards card, If you're new to rewards cards, start slowly


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Updated: 10-20-2018