Rate survey: Credit card interest rates slide to 14.96 percent

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

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.96%
Low interest 10.40%
10.40% 10.40%
Balance transfer 12.62%
Business 13.13%
Cash back  14.30%
Airline  14.63%
Reward 14.80%
Instant approval 15.49%
Bad credit 23.64%
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: Nov. 14, 2012

The national average APR dropped to 14.96 percent Wednesday. This is the first time average rates have fallen below 15 percent in more than two months. 

American Express sparked this week's rate change by slashing the lowest available APR on the Blue Cash Everyday card by more than 4 percentage points. Applicants with excellent credit may now qualify for an APR as low as 12.99 percent -- down from 17.24 percent the previous week.

The significant drop in the card's APR for consumers with the best credit is welcome news for American Express enthusiasts that are shopping around for a rewards card. The Blue Cash Everyday card and its sister card, the Blue Cash Preferred card, now feature the lowest available APRs of any personal cards advertised on the American Express website.

The Blue Cash Everyday card, in particular, is also far more affordable than it used to be for consumers who expect to carry a balance on their cards. Unlike the Blue Cash Preferred card, it doesn't carry an annual fee and it now features a much lower APR than many rewards cards with similar perks. (The national average APR for cash-back credit cards, for example, currently stands at 14.3 percent.)

To get a sense of just how much more affordable the card has become, consider this. If a cardholder borrows $3,000 on a Blue Cash Everyday card this holiday season and consistently pays $100 per month at 12.99 percent interest, that cardholder will have to pay $648 in interest to pay off the balance. That's $306 less than they would have paid if they had applied for the same card a week ago. (Calculator: How long will it take to pay off your credit card balance?)

American Express also lowered the Blue Cash Everyday card's maximum available interest rate from 22.24 percent to 21.99 percent. The modest drop in the card's highest rate didn't affect the national average, however, because CreditCards.com only considers a card's lowest available APR when calculating average rates.

Leah Gerstner, a spokeswoman for American Express, confirmed that the issuer lowered the APRs on both the Blue Cash Everyday card and the Blue Cash Preferred card, but declined to comment further on the changes.

Issuers introduce new promotions for the holidays
American Express' decision to lower APRs on two of its cash-back cards comes just as credit card issuers are ramping up their holiday promotions.

A number of issuers have introduced new holiday promotions in recent weeks. Many of those promotions include seasonal standbys, such as fatter cash-back rebates and new ways to use rewards points. Some issuers are getting more creative.

For example, Citi has begun offering an unusual price protection program called Citi Price Rewind that allows cardholders to save on holiday purchases -- after they have already made them. "Citi Price Rewind actively searches for a lower price for our card members," said Leslie Gillin, head of card sales and marketing in a press release about the service. "We do the price hunting for them so they can save time and money."

Citi cardholders can register a purchase with the program, and Citi will scour retailer websites for up to 30 days, searching for a lower price. If the issuer finds a matching item that's at least $25 less than the original purchase, Citi will refund cardholders up to $250 of the difference in prices between the two items.   

See related: Gifting, budgeting drive gift card boom

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Updated: 01-24-2019