Rate survey: Average card APR remains at record high of 16.71 percent

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The average credit card interest remained at a record high Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report.

The average card APR held steady at 16.71 percent, which is the highest average APR CreditCards.com has recorded since it began tracking rates in mid-2007.

To arrive at its finding, CreditCards.com evaluated the APRs, annual fees and promotional terms of 100 U.S. credit cards.

None of the cards included in the weekly rate report advertised new interest rates. Card issuers also left promotional terms, such as 0 percent balance transfer offers, unchanged as well.

One card included in the weekly rate report was discontinued this week and was replaced with a retooled version that’s slightly more expensive, but also offers more benefits. Chase replaced the Marriott Rewards Premier card with the Marriott Rewards Premier Plus credit card May 3.

The new hotel card charges a $95 annual fee – up from the $85 the previous Marriott card charged – and offers a host of premium benefits, including a generous 100,000-point sign-up bonus and a guaranteed free night’s hotel stay every year.

A record number of cardholders are relying on credit

Over the past two years, the average APR for new card offers has climbed by more than 1.5 percentage points, mostly due to Federal Reserve rate increases. 

But the higher credit card APRs aren’t deterring people from using their cards and charging bigger balances.

According to research released May 8 by the credit agency TransUnion, card usage soared to an all-time high the first quarter of 2018. Nearly 175 million consumers currently own a credit card, the credit agency said – up from 149.4 million in 2012. Meanwhile, more than 416 million cards are currently in circulation.

Consumers are also carrying bigger balances and accessing larger credit lines. For example, the average card balance has climbed from $5,299 in 2012 to $5,472 in 2018. Meanwhile, the average credit card limit for new accounts has jumped from an average maximum of $4,704 in 2012 to a high of $5,283 in 2018.

The higher credit limits suggest that card issuers are trusting consumers more than they did six years ago. But some consumers are struggling to pay back what they owe.

According to TransUnion, the percentage of consumers falling seriously behind on their credit card bills has increased significantly in recent months. The delinquency rate for credit cards bills that are overdue by more than 90 days rose to 1.78 percent in the first quarter – just slightly higher than it was in 2012 when credit was somewhat harder to get. In 2015, by contrast, the delinquency rate for cards that are overdue by 90 days or more was just 1.38 percent.

But despite the increase in cardholders falling behind on bills, analysts at TransUnion say that cardholders overall appear to be doing relatively well and are managing credit responsibly.

“Though delinquency rates are certainly rising, there are several reasons we do not believe this is a worrisome trend at this juncture,” said TransUnion’s Paul Siegfried in a news release. “First, credit card issuers have been relatively conservative over the last five quarters, issuing more credit to lower-risk consumers compared to higher-risk consumers. Second, the credit limits they are extending to consumers in most risk tiers are generally lower than those they had issued in prior years. Finally, we believe it’s a positive sign for the economy that more consumers have access to credit and that delinquency rates, while growing, are doing so at a slow pace and remain below levels observed immediately post-recession.”

CreditCards.com's Weekly Rate Report

  Avg. APR Last week 6 months ago
National average 16.71% 16.71%
16.15%
Low interest 13.53%
13.53% 12.89%
Cash back 16.98%
16.98%
16.40%
Balance transfer 15.93%
15.93%
15.38%
Business 14.34%
14.34%
13.68%
Student 16.14%
16.14%
15.70%
Airline 16.66%
16.66%
16.07%
Rewards 16.81%
16.81%
16.24%
Instant approval 19.05%
19.05%
18.60%
Bad credit 23.77%
23.77%
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: May 9, 2018

See related: Prime rate, federal funds rate and Libor: a primer, Historical credit card rates, 2007-2018

 


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Updated: 10-19-2018