Rate survey: Average card APR stays at 16.15 percent for fourth week
By Kelly Dilworth | Published: October 11, 2017
Interest rates on new card offers held steady this week, according to the CreditCards.com Weekly Credit Card Rate Report.
None of the cards monitored by CreditCards.com advertised new interest rates. As a result, the national average APR stayed put at 16.15 percent for the fourth straight week.
Issuers also left unchanged promotional terms, including interest-free balance transfer offers and introductory APRs.
The average APR for new card offers is currently at a record high. A year ago, the average APR registered nearly a full percentage point lower at just 15.18 percent.
Over the past year, average rates have increased at the fastest rate since 2010.
Since January 1, 2017, the national average has increased 22 times and fallen just twice. As a result, the average APR for the year has climbed to 15.82 percent – also a record high.
Credit card delinquencies fall for the for the first
time since 2016
Consumers are carrying more credit card debt than they have in years, but higher debt loads aren’t stopping them from paying their credit card bills on time.
According to the Federal Reserve’s latest G.19 report, consumer credit card balances expanded by a healthy annualized growth rate of 7 percent as more people opened new credit cards and charged larger amounts to their cards. In July, credit card balances rose by 3.2 percent.
Despite carrying more debt overall, most consumers are still managing to pay at least the minimum amount due on their cards every month. According to new research from the American Bankers Association, issuers reported significantly fewer late payments this summer after observing an uptick in late payments earlier in 2017.
The banking trade group said the delinquency rate for bank-issued cards slipped to 2.67 percent of all accounts in the second quarter – well below the historical average.
“Consumers continue to manage their credit cards very well,” the American Bankers Association’s chief economist James Chessen said in a news release. “Quarter after quarter, Americans have succeeded at keeping their credit card balances low in relation to their disposable income.”
Issuers had observed an uptick in late payments in the first three months of the year, causing some analysts to worry that consumers are struggling to keep up with their financial obligations. Credit card payments are often the first payments consumers leave unpaid when they run into financial trouble and struggle to pay their bills.
Economists at the New York Federal Reserve, for example, noted earlier this year that serious delinquencies – late payments by 90 days or more – have become somewhat more common as a larger proportion of consumers struggle with their finances.
“This growth is potentially concerning, particularly in the context of a strong economy and low interest rates,” the Fed economists said in an August 2017 blog post.
Analysts expected to see an uptick in late payments when card issuers opened up more cards for consumers with low credit scores. But card issuers have helped avoid some delinquencies by sharply limiting how much credit they allow new cardholders to obtain.
According to the American Bankers Association, the average subprime cardholder is allowed to borrow no more than $2,574 on a new credit card. Meanwhile, the average prime borrower is given an average of $5,635 to borrow on a new card.
|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: Oct. 11, 2017|
- Rate survey: Average card APR holds steady at 16.15 percent – Oct. 4, 2017: Interest rates on new credit card offers remained unchanged this week, according to the CreditCards.com Weekly Credit Card Rate Report ...
- Rate survey: Average card APR remains at 16.15 percent – Sept. 27, 2017: The average APR for new card offers remained at a record high Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report ...
- Rate survey: Average card APR climbs to 16.15 percent – Sept. 20, 2017: The average APR for new credit card offers inched up to another record high Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report ...