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Survey: Average card APR climbs to record 15.42 percent

Summary

Despite higher interest rates, consumers are adding to their card balances

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The national average APR on new card offers climbed to an all-time record this week, according to the CreditCards.com Weekly Credit Card Rate Report.

The average APR for new credit cards jumped to 15.42 percent – up from a previous record of 15.36 percent.

J.P. Morgan Chase spurred this week’s rate change by revising APRs on its line of credit cards so that Chase cards align with the Federal Reserve’s December 2016 rate hike. The federal agency raised its benchmark interest rate by 0.25 percent, prompting lenders to increase rates by the same amount.

Chase also hiked APRs by more than a full percentage point on several cards, including the Freedom card and the Slate card. The lowest available APR on the Slate card, for example, was increased to 15.49 percent – up from a previous low of 13.24 percent.

Card use continues to expand
Despite higher interest rates on new and current credit cards, consumers are reaching for their credit cards more often, according to new earnings data released by several bank card issuers, and are charging bigger balances.

J.P Morgan Chase, for example, reported Jan. 13, that credit card sales volume reached a record high of $148.5 billion in the fourth quarter of 2016 – up from $130.8 billion in the last three months of 2015. Total bank card spending, including spending on Chase-issued debit cards, grew by nearly $22 billion.

Meanwhile, Bank of America said that credit card and debit card spending grew by 3 percent, year-over-year, in the fourth quarter.

U.S. Bank reported that credit card loans expanded by 11.2 percent in the final months of 2016, thanks in part to the acquisition of new card accounts from another issuer, and Wells Fargo reported a 7 percent increase in credit card purchases in the fourth quarter.

According to consumer credit data released in January by the Federal Reserve, November was an especially heavy spending month for credit card holders, causing the total amount of credit card debt that consumers carry to surge.

According to the Fed, credit card balances jumped by 13.5 percent on an annualized basis in November – up from a 2.9 percent increase in credit card debt the previous month.

November’s increase was the steepest increase in credit card balances in months. However, card balances have been steadily on the rise since February, indicating that cardholders may have finally shed their post-recession wariness toward debt.

As a result, credit card balances are currently at their highest point since 2009.

CreditCards.com’s Weekly Rate Report
Avg. APRLast week 6 months ago
National average15.42%15.36%15.18%
Low interest12.22%12.16%11.98%
Cash back15.57%15.51%15.32%
Balance transfer14.67%14.61%14.38%
Business13.41%13.39%13.12%
Student13.67%13.67%13.42%
Airline15.40%15.35%15.08%
Reward15.48%15.44%15.29%
Instant approval18.03%18.00%18.04%
Bad credit22.98%22.98%22.56%
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: Jan. 18, 2017

See related:Fed: Card balances surged by $11 billion in November

What’s up next?

In Podcasts

Survey: Average card APR stays at record high of 15.36 percent

Jan. 11, 2017: The national average APR on new credit card offers remained at a record high this week, according to the CreditCards.com Weekly Credit Card Rate Report.

Published: January 11, 2017

See more stories
Credit Card Rate Report Updated: May 23rd, 2019
Business
15.61%
Airline
17.50%
Cash Back
17.60%
Reward
17.62%
Student
17.79%

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