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Rate Report

Rate survey: Average card APR remains at 15.19 percent for a 6th week

Summary

May 25, 2016: Interest rates on new credit card offers held still this week, according to the CreditCards.com Weekly Credit Card Rate Report.

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Interest rates on new credit card offers held still this week, according to the CreditCards.com Weekly Credit Card Rate Report.

None of the cards tracked by CreditCards.com advertised new interest rates. As a result, the national average annual percentage rate (APR) remained fixed at 15.19 percent for a sixth week.

After a flurry of increases from December to February, card offers have mostly stayed the same. In our 21 weekly surveys since Jan. 1, the national average APR changed in six surveys and stayed put the other 15, with most of the changes coming early in the year.

The current plateau in rates is at a high elevation, as the national average is near record highs. In December 2015, the Federal Reserve increased its benchmark interest rate by a quarter of a percent, causing most card APRs to rise by the same amount. Since then, average rates on new card offers have remained above 15 percent.

Card issuers send fewer offers
Consumers received fewer credit card offers last month as issuers pulled back on mailing advertisements. According to research released May 23 by Credit Suisse, card issuers sent 2 percent fewer offers in April. In March, issuers had hiked mailed mail offers by 14 percent.

Analysts at Credit Suisse predict card issuers will step up their marketing efforts later in the year as they compete for new accounts. American Express, for example, is still trying to make up for losing the Costco partnership last year and so is expected to target new cardholders aggressively throughout the rest of 2016. Capital One and Citi are also likely to send a large volume of offers over the next year, said Credit Suisse.

“Competitiveness in the industry is high and recent months’ mail volume confirms that the card issuers were marketing more aggressively in the last few months of 2015,” said Moshe Orenbuch and Serena Hong in a research note.

Despite stepped-up marketing, many issuers are remaining relatively stingy about the type of offers they send.

Promotional offers shrink

When card issuers aggressively compete, cardholders can usually expect better card offers with more generous promotions. But so far, card issuers are remaining relatively tightfisted with promotional offers and are limiting the amount of free credit cardholders receive.

The average 0 percent balance transfer offer, for example, currently lasts just 14.1 months, down from an average of 14.4 months in 2015. In 2014,  average balance transfer periods regularly reached 16 and even 20 months.

Card issuers are also sending sharply fewer introductory teaser offers. The percentage of card offers advertising an interest-free balance transfer, for example, fell to 67 percent in April, down from 70 percent in 2015.  The percentage of card offers advertising a 0 percent APR on purchases dropped to 67 percent in April, down from 82 percent the previous year.

More rewards deals are being advertised, though, said Credit Suisse, which could help make up for the slimmer promotions. For example, American Express has been offering some new cardholders sign-up bonuses worth up to $300, said Credit Suisse. The percentage of offers advertising a rewards program has also increased.

CreditCards.com’s Weekly Rate Report
Avg. APRLast week 6 months ago
National average15.19%15.19%14.96%
Low interest11.96%11.96%11.62%
Cash back15.30%15.30%15.27%
Balance transfer14.39%14.39%14.07%
Business13.12%13.12%12.85%
Student13.42%13.42%13.14%
Airline15.17%15.17%14.91%
Reward15.30%15.30%15.09%
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: May 25, 2016

See related:More parents giving their kids credit cards, Poll: 8 in 10 Americans pay for summer vacation with savings

What’s up next?

In Rate Report

Rate survey: Average card APR holds steady at 15.19 percent

May 18, 2016: Interest rates on new credit card offers remained unchanged this week, according to the CreditCards.com Weekly Credit Card Rate Report.

Published: May 18, 2016

See more stories
Credit Card Rate Report Updated: May 22nd, 2019
Business
15.61%
Airline
17.50%
Cash Back
17.60%
Reward
17.62%
Student
17.79%

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