October 19, 2016: The average APR on new credit card offers remained at 15.18 percent Wednesday for a second week, according to the CreditCards.com Weekly Credit Card Rate Report.
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The average APR on new credit card offers remained at 15.18 percent Wednesday for a second week, according to the CreditCards.com Weekly Credit Card Rate Report.
Average rates are currently at their lowest point in more than two months. For six weeks, the national average APR hovered at 15.22 percent — a near-record high.
Despite dipping to 15.18 percent, average APRs on new card offers are still elevated by historical standards. Since January 1, for example, the average APR remained solidly above 15.10 percent. That’s the longest stretch of time average rates have remained above 15 percent since CreditCards.com began tracking rates in mid-2007. As a result, the national average APR for the year has climbed to 15.18 percent — an all-time record.
Applications for Wells Fargo cards drop sharply after bank scandal
More than a month after the Consumer Financial Protection Bureau fined Wells Fargo $100 million for opening new credit card accounts without customers’ consent, the scandal appears to have deterred consumers from opening new accounts.
According to earnings data released Oct. 14, applications for new Wells Fargo credit cards dropped by 20 percent in September, compared to the previous year. Applications for new checking accounts plunged by 25 percent. Consumers also visited Wells Fargo bank branches less often last month, indicating that some customers may have soured on the bank after deeply negative coverage in the news.
The scandal became widely known in early September after the CFPB announced the penalty — the largest in the financial watchdog’s history — on Sept. 8.
Incoming Wells Fargo CEO Tim Sloan said in a news release on Oct. 12 that the bank would work hard to earn back customers’ confidence. “My immediate and highest priority is to restore trust in Wells Fargo,” said Sloan in the release.
The drop in new accounts has come at a bad time for Wells Fargo’s credit card business. In a bid to attract more cardholders to Wells Fargo, the bank recently launched a new cash back card that’s similar to other recently unveiled cards, such as the Chase Freedom Unlimited card. In June, Wells Fargo launched the Wells Fargo Cash Wise card, which offers unlimited 1.5 percent cash back on every purchase.
Card usage up at multiple banks
Despite a noticeable drop in applications in September, Wells Fargo reported that credit card usage overall was up significantly in the third quarter. For example, credit card purchase volume climbed 8 percent, year-over-year, to $19.6 billion in purchases.
Other banks also saw an increase in card usage last quarter. For example, Bank of America reported that credit and debit card spending jumped 5 percent in the third quarter. Chase said that credit card spending rose 10 percent in the third quarter. Meanwhile, the total number of Chase card transactions that merchants processed jumped by 13 percent last quarter.
|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: October 19, 2016|