Credit card interest rates linger at 15.07 percent
Statistics enthusiast focused on data-driven content
|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. 22, 2014|
Average rates on new card offers remained unchanged again this week, according to the CreditCards.com Weekly Credit Card Rate Report.
The national average annual percentage rate (APR) rested at 15.07 percent Wednesday for the fourth consecutive week.
None of the cards tracked by CreditCards.com advertised new interest rates. Promotional balance transfer offers and introductory APRs also were unchanged this week.
Rates have remained extremely stable this year, especially for cardholders with low credit scores. For example, cards for those with bad credit have gone 39 weeks without an average APR change.
Overall, however, average rates on new card offers have been slowly rising each year since 2010 when the Credit CARD Act of 2009 was implemented. The national average APRs for 2011, 2012 and 2013 were 14.85, 14.96 and 14.98 percent, respectively. The 2014 average APR is currently 15.03 percent.
Before the CARD Act, the average APR in 2009 was 12.34 percent, but after the act went into effect, card issuers could no longer raise existing account rates without giving at least 45 days' notice. As a result, many lenders now offer higher rates upfront, but the rates have not deterred new card applicants.
Credit card mail offers
The volume of credit card offers sent through the mail in September grew after two weak months, according to a Credit Suisse mail volume report, indicating that issuers are spending more to attract new card applicants.
Card issuers mailed 336 million card offers to consumers in September, up 6 percent from August and up 9 percent from 2013 levels. Credit Suisse predicts 4.3 billion credit card mail offers will be sent by the end of 2014.
"While other channels have comprised a higher percentage of new accounts in recent years, mail volume remains an important barometer of competitiveness, as well as which brands are the most heavily marketed," research analyst Moshe Orenbuch said in the Credit Suisse report. "We expect an increase in industry competition in 2014."
Visa-branded offers were most popular in September, accounting for 54 percent of the mailings, up 42 percent from last year. MasterCard-branded offers made up 25 percent of the mailings, Discover 14 percent and American Express offers comprised only 3 percent of mailings.
This recent group of mail offered consumers lower annual fees and more introductory offers. Only 17 percent of the September credit card mailings included an annual fee, up 1 percent from the previous month. Of those that had an annual fee, that fee declined to $98 from $120 in August.
Additionally, 259 million of the 336 million mail offers included a 0 percent introductory APR rate teaser. Capital One offers had the most 0 percent introductory rate offers, which were included in 97 percent of its mailings. Discover was a close second with 96 percent of its offers including a 0 percent introductory rate.
Spending strong, card issuers flourish
U.S. credit card spending increased by 8.9 percent in the third quarter, playing a large role in issuers' positive third-quarter earnings reports.
According to a Credit Suisse U.S. bank card volume report, American Express reported the highest third-quarter purchase volume total of $173 billion, with JPMorgan Chase coming in a close second with $119.5 billion. Wells Fargo reported the highest year-over-year purchase volume growth at 15.8 percent.
American Express U.S. Card Services, in particular, reported a net income of $889 million in the third-quarter, up 14 percent from last year, thanks, in part, to increased consumer spending.
"Card member spending was up 9 percent, a modest acceleration from last quarter, and loan balances grew 5 percent," Kenneth I. Chenault, chairman and chief executive officer for American Express, said in a news release.
Synchrony Financial -- a recent retail bank spin-off from GE Capital -- announced in its first earnings report this quarter that it outperformed early predictions, especially in the retail credit card segment, which is up 6 percent from 2013. Purchase volume, in particular, increased 11 percent from last year.
See related: Card balances fall for the first time in months
- Rate survey: Average card rate remains at 16.92 percent for third week – September 19, 2018: The average credit card interest rate held steady Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report ...
- Rate survey: Average card rate stays put at 16.92 percent – September 12, 2018: The average credit card interest rate didn’t budge Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report ...
- Rate survey: Average card rate rises to 16.92 percent – September 5, 2018: The average credit card interest rate inched up Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report ...