Rate survey: Average card APR stays put at 16.15 percent for fifth week
Interest rates on new card offers remained steady Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report.
For the fifth consecutive week, the national average APR stayed at 16.15 percent. None of the cards included in the weekly rate report advertised new interest rates. Most cards also left promotional terms unchanged.
U.S. Bank extended the interest-free promotional offer on the U.S. Bank Visa Platinum card from 15 months to 18 months, making the Platinum card one of the most generous balance transfer cards on the market. Most balance transfer cards give cardholders just 12 to 15 months to pay off a transferred balance.
The U.S. Bank card also boasts a lower standard interest rate than most of its competitors. The card’s lowest available APR starts at just 10.99 percent – nearly 2 percentage points below average.
Card spending continues to increase
Consumers are ramping up the amount they spend on credit cards, boosting issuers’ profits.
Several card issuers reported this month that consumer card spending increased significantly in the third quarter.
J.P. Morgan Chase, for example, said that credit card spending spiked 13 percent, year-over-year, in the third quarter, helping lift the issuer’s profits. The total number of credit card purchases that stores rang up also rose in the third quarter as consumers increasingly reached for credit cards to pay for purchases rather than cash or debit.
“In consumer and community banking, card sales and merchant processing volumes were once again up double digits while loans and deposits continued to grow strongly,” said Chase CEO Jamie Dimon in a statement.
Wells Fargo said consumers spent 4 percent more on their credit cards in the third quarter of 2017 than they did the year before.
Meanwhile, Bank of America reported credit and debit card spending combined jumped 7 percent in the third quarter. It also said that the total number of card applications it received edged up over the summer.
Consumers’ card balances are also getting bigger, banks reported.
Citi, for example, reported card sales grew by 8 percent, while the average Citi card balance expanded by 7 percent in the third quarter.
Meanwhile, U.S. Bank said the average U.S. Bank card loan grew by 2.3 percent.
The higher sales volumes indicate that consumers are feeling optimistic about their finances and are comfortable enough financially to increase how much they spend.
But banks also reported a notable uptick in credit card late payments and charge-offs – payments that issuers have stopped trying to collect – cutting into their overall profits.
|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. 18, 2017|
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