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Rate survey: Average card APR jumps to record high of 17.71 percent

Summary

The average APR on new credit card offers leaped higher Wednesday, breaking another all-time record, according to the CreditCards.com Weekly Credit Card Rate Report.

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The average APR on new credit card offers leaped higher Wednesday, breaking another all-time record, according to the CreditCards.com Weekly Credit Card Rate Report.

The national average APR rose to 17.71 percent, which is the highest weekly average CreditCards.com has recorded since it began tracking rates in mid-2007.

A rate hike on one of the American Express’ business cards was responsible for this week’s rate change. American Express increased the minimum APR on the Blue Business℠ Plus Credit Card from American Express from 13.49 percent to 15.49 percent, causing the average APR for business cards to also increase. American Express left the Blue Business Plus card’s maximum APR of 21.49 percent unchanged.

Business card APRs are typically lower than the APRs on other general market cards, such as rewards cards. However, they have increased significantly in recent years as more lenders adjust APRs in tandem with the U.S. prime rate and revise individual card offers.

The average business card, for example, now charges a minimum APR of 15.47 percent – up from an average of 13.12 percent in May 2016.

Like most issuers over the past three years, American Express has also gradually increased the APRs on many of its credit cards. As a result, nearly all of the issuer’s new credit cards charge a minimum APR of at least 15 percent.

Until this week, the Blue Business Plus card was one of the few exceptions. Now, just one American Express business credit card – the SimplyCash® Plus Business Credit Card from American Express – charges an APR lower than 15 percent. It charges a range starting at 14.49 percent and maxing out at 21.49 percent.

None of the other cards included in the weekly rate report advertised new rates this week. Every week, CreditCards.com evaluates the APRs, annual fees and promotional terms of 100 U.S. credit cards.

Most issuers also left 0 percent promotional offers unchanged.

Citi continues to offer alternating promotions on the Citi Simplicity card. However, it’s not clear if this is an ongoing strategy or if Citi will eventually show all customers the same promotional balance transfer offer.

Some consumers are currently being shown a 0 percent balance transfer and introductory purchase offer for 18 months. Others are shown a 0 percent balance transfer offer for 21 months and a 0 percent introductory purchase offer for 12 months. The regular APR ranges from 16.24 percent – 26.24 percent variable.

See related:  Guide to rising credit card interest rates

As cards become more generous, many applicants are seeing higher credit lines

Despite hiking APRs on most new credit card offers, lenders have been increasingly generous in recent years – particularly with their rewards. Sign-up bonuses and rewards programs, for example, have become increasingly competitive. Some lenders have also increased the amount of time they allow new cardholders to carry a balance interest-free.

Lenders are also granting bigger credit limits, new research from the American Bankers Association (ABA) shows. According to the ABA’s latest Credit Card Market Monitor, for example, the average credit card limit for new card accounts has grown significantly – particularly for cardholders with lower scores.

The average credit limit for new subprime credit cards rose to $2,701 in the fourth quarter of 2019 – up 1.1 percent from the previous quarter. Meanwhile, the average credit limit for new prime credit card applicants rose by 1.5 percent. The average prime credit card now gives cardholders at least $5,736 to spend.

Average credit limits for super prime card accounts rose more modestly, increasing by just 0.2 percent. However, cardholders with the best credit scores are already given nearly twice the amount of spending power as card applicants with somewhat lower scores. For example, the average credit limit for new super prime card accounts is currently $10,319.

Despite granting bigger credit limits and competing fiercely for new cardholders, issuers appear to have been somewhat pickier about who they approved for a new card. According to the ABA, lenders opened significantly fewer accounts for consumers with prime and subprime credit scores.

“Consumers continue to exhibit good payment behavior overall, and issuers are responding by slowly increasing credit lines,” said the ABA’s James Chessen in a news release. “At the same time, issuers are slowing the pace of new account generation, particularly for subprime and prime borrowers, as they continue to closely monitor economic trends and consumers’ financial health.”

See related:  Historic credit card interest rates chart

CreditCards.com’s Weekly Rate Report

Avg. APR Last week 6 months ago
National average17.71%17.69%17.11%
Low interest14.73%14.69%14.19%
Cash back17.60%17.60%17.16%
Balance transfer16.94%16.91%16.37%
Business15.47%15.32%14.78%
Student17.79%17.79%17.20%
Airline17.50%17.50%17.12%
Rewards17.60%17.58%17.10%
Instant approval20.24%20.24%19.76%
Bad credit25.33%25.33%24.30%
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: May 1, 2019

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Credit Card Rate Report Updated: June 12th, 2019
Business
15.61%
Airline
17.54%
Cash Back
17.68%
Reward
17.57%
Student
17.79%

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