The average APR on new credit card offers crept higher Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report.
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The average APR on new credit card offers crept higher Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report. The national average APR rose to 17.69 percent, which is the highest weekly average CreditCards.com has recorded since it began tracking rates in mid-2007.
Barclays spurred this week’s rate change by hiking the APR on the NFL Extra Points credit card by 1 percentage point. Football fans shopping for a team-branded card are now offered a minimum APR of 18.24 percent and a maximum APR of 28.24 percent.
None of the other cards included in the weekly rate report advertised new interest rates.
Every week, CreditCards.com evaluates the APRs, annual fees and promotional terms of 100 U.S. credit cards.
Most cards tracked by CreditCards.com also left promotional terms unchanged.
Wells Fargo extended the promotional APR on the Wells Fargo Propel American Express® Card from 9 months to 12 months (then a regular rate of 16.24% – 27.24% variable). However, the card still has a relatively short balance transfer period compared to other rewards cards on the market.
For example, many balance transfer cards give cardholders at least 15 months to carry a transferred balance. Some promotional balance transfer periods even last as long as 18 to 20 months or more. The Wells Fargo Platinum Visa card, for example, gives cardholders 18 months to carry a balance interest-free (then a regular rate of 13.74% – 27.24% variable).
See related: Historic credit card interest rates chart
As loan balances rise, young adults are paying more to borrow
Borrowers across the credit score spectrum are contending with higher rates on credit cards and other variable rate loans. But young adults who are just starting to build credit appear to be especially affected as maximum rates reserved for cardholders with lower scores continue to rise to record highs.
CreditCards.com only takes into account a card’s lowest available interest rate when calculating the national average. But young adults with emerging credit profiles are unlikely to receive a card’s lowest rate.
According to new research from Experian, the average borrower between the ages of 23 and 38 has a credit score of just 659 – which is well below the score range needed to receive the lowest APR.
Young adults are also contending with escalating loan balances, which also affects the rates they are offered. Per Experian, the average millennial currently owes $5,231 to their credit card (a 7 percent increase from what the average millennial owed a year prior). Meanwhile, average student loan balances have climbed to $34,770.
As a result, many young borrowers may be having a hard time accessing affordable rates when they apply for new cards.
The average maximum APR on new card offers has climbed to 24.98 percent, thanks in part to a growing number of rewards cards that are charging maximum rates well above 25 percent. That’s less than half a point shy of the average APR on subprime credit cards.
Meanwhile, the median card APR has risen to 21.33 percent.
Even cards marketed as low interest credit cards are charging higher rates these days – particularly for cardholders who don’t qualify for a card’s lowest rate.
- The BankAmericard® credit card charges a maximum variable APR of 25.24 percent.
- The Citi Diamond Preferred Card also charges a maximum variable APR of 25.24 percent.
- The APR on the Wells Fargo Platinum Visa card runs as high as 27.24 percent variable.
- The APR on the U.S. Bank Visa Platinum Card maxes out at 25.74 percent variable.
The Barclaycard Ring Mastercard is one of the few low rate credit cards that charges just a single APR for all applicants: 14.24 percent variable.
See related: Guide to rising credit card interest rates
Student cards’ interest rates up 4 percent since 2016
Student card APRs are also rising. For example:
- The Discover it® Student Cash Back card charges a minimum variable APR of 15.24 percent and a maximum variable APR of 24.24 percent.
- The APR on the BankAmericard for Students runs from 15.24 percent to 25.24 percent variable.
- The single APR on the Journey Student Rewards from Capital One card runs as high as 26.96 percent variable.
- Meanwhile, the Deserve Edu Mastercard for Students charges a flat APR of 20.99 percent variable.
Among the student cards included in the CreditCards.com database, the average student card charges a minimum APR of 17.79 percent and an average maximum APR of 24.37 percent.
Young adults who are shopping around for a new card are unlikely to see interest rates go down any time soon.
According to CreditCards.com data, the average student card APR has climbed by more than 4 percentage points over the past three years – in part because many card credit issuers have stopped offering student cards altogether and so there are fewer cards to choose from.
During that same time period, the average APR on all credit cards has climbed by 2 and a half percentage points.
CreditCards.com’s Weekly Rate Report
|Avg. APR||Last week||6 months ago|
|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.)|
|Updated: April 24, 2019|