Card rates' average remains at 14.96 percent for 3rd week

Average rates on new credit card offers remained flat this week, according to the Weekly Credit Card Rate Report.

For the third week in a row, the national average annual percentage rate (APR) remained at 14.96 percent.

Most issuers left interest rates alone this week. The sporting goods store Cabela's increased the APR on the Cabela's Club Visa card by 0.05 percent after the 1-month Libor rate changed. However, the rate hike was too small to affect the national average. Sporting enthusiasts who apply for a Cabela's Club card are now offered a range of APRs starting at 15.23 percent and topping out at 21.23 percent.

Bank of America was also active. It eliminated the 12-month 0 percent introductory APR on the BankAmericard Better Balance Rewards card, but it left the card's interest-free balance transfer offer intact.

Card ownership hits 7-year-high
Banks are having an easier time luring new cardholders. According to research released Wednesday by the American Bankers Association, consumers opened 16 percent more credit card accounts in the second quarter of 2015 than they did the previous year.

As a result, the total number of open credit card accounts expanded to a 7-year high in the second quarter. At least 318 million bank-issued credit cards are now in circulation. According to the American Bankers Association, that's the largest number of cards consumers have kept open since late 2008.

Most new credit cards have gone to consumers with good or excellent credit. However, issuers have also approved more card accounts for consumers with damaged scores.

"As conditions improve, card issuers have responded by providing credit opportunities for more consumers," said the American Bankers Association's Jess Sharp in a Dec. 2 news release.

Year-over-year, subprime credit card accounts belonging to consumers with lower credit scores expanded by 32 percent in the second quarter, indicating that at least some card issuers have lowered their standards for approving new cards.

However, despite the substantial uptick, the total number of card accounts belonging to consumers with lower scores is still relatively small compared to years before the Great Recession, when card issuers were more lax about approving cards. For example, consumers with subprime credit scores owned roughly 30 percent more cards in early 2009 than they do today, according to the release.

"While the volume of subprime accounts is growing, it remains well below pre-recession levels and makes up a much smaller share of overall new account volume," said Sharp.

Credit limits remain tight
Instead of rejecting applications or advertising higher interest rates, many card issuers are mitigating the risk of extending credit to consumers with lower scores by approving new cards with smaller credit limits, said the association.

"Card issuers are finding new ways to meet the needs of millennials and other consumers with limited credit histories, as well as those who may have had difficulties managing their finances after the recession and are looking for a second chance," said Sharp in the release. "These consumers are increasingly opening new accounts with lower initial credit lines that can increase over time as they demonstrate good use of credit."

Average credit limits for consumers with subprime scores fell by more than 1 percent in the second quarter. Consumers with good and excellent credit also received slightly lower credit limits.

The lower credit lines don't seem to be hampering too many consumers, though, according to the ABA's data. A growing numbers of cardholders are limiting their total charges and choosing to pay off their balances in full each month.

"Consumers are demonstrating a greater capacity to meet financial obligations and are increasingly using credit cards as a payment tool rather than a short-term financing mechanism," said Sharp.'s Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.96% 14.96%
Low interest 11.62%
11.62% 11.62%
Cash back 15.27%
Balance transfer 14.07%
Business 12.85%
Student 13.14%
Airline 14.91%
Reward  15.09%
Instant approval 18.00%
Bad credit 22.73%
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: Dec. 02, 2015

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Updated: 01-18-2019