Rate survey: Average card APR dips to 16.14 percent

Kelly Dilworth
Personal finance writer
Specializing in new trends in credit

The average credit card interest rate slipped Wednesday for the first time since May, according to the CreditCards.com Weekly Credit Card Rate Report.

The national average APR declined to 16.14 percent after the APR on a rewards card was cut by 1 percentage point.

Huntington Bank clipped the lowest available APR on the rewards version of its Voice card from 13.99 to 12.99 percent. It left intact the card’s top rate of 26.99 percent. 

This week marks the first time in months that a card issuer lowered the APR on a card tracked by CreditCards.com. Issuers rarely trim interest rates these days. As a result, the average card APR has declined just three times since Jan. 1.  

American Express nixes signature requirement at checkout
In an effort to speed up payments and lower costs for merchants, another card network is abandoning the signature requirement at checkout.

American Express announced Dec. 11 it will no longer require retailers to collect customer signatures for large purchases. Previously, cardholders were required to sign when they spent more than $50.

The change is intended to help retailers usher customers through checkout lines more quickly and satisfy those who don’t like waiting for their card charges to process. American Express says it will also help cut operating costs for retailers who previously had to store  receipts in a secure location.

“This move will help merchants provide a quicker checkout experience for more customers by removing potential friction at the point of sale,” said Merchant Advisory Group’s Laura Townsend in an American Express news release.

Walmart’s Mike Cook also weighed in on American Express’ news. “Having to sign a receipt can be a hassle for customers and is not necessary to prevent fraud at the point of sale,” said Cook in the release. “We’re pleased American Express has decided to eliminate its signature requirements, which will promote a more seamless shopping and checkout experience for our customers.”

American Express is the third major card network to announce a switch to signature-less payments. Discover and Mastercard have also promised to nix the signature requirement next spring. All three payment networks will stop requiring signatures in April 2018.

That leaves Visa as the only major card network not to announce a change in policy. Currently, Visa cardholders have to sign receipts for any purchase over $25, unless it’s from a discount or grocery store. Cardholders shopping at a discount or grocery store have to sign a receipt when their payment tops $50.

Retailers want chip-and-PIN
Retailers have long complained about the signature requirement – not just because it makes the checkout process a little slower.

According to the National Retail Federation, many retailers want to require cardholders to enter a PIN instead. Chip-and-PIN transactions are more typical in other countries that use chip-based cards, such as in Canada and Europe.

An August 2017 survey of 750 “small brick-and-mortar retailers” found nearly half think they’d be more protected from fraud if card networks required consumers to enter a PIN after dipping their chip-based card in a reader. Just a small fraction – 16 percent – didn’t think PIN transactions would help.

Some retailers, such as Home Depot and Walmart, have even sued card networks for forcing them to use signatures to verify payments rather than PINs.

The retailers say that card payments requiring a PIN rather than a signature are more secure.

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 16.14% 16.15%
15.83%
Low interest 12.87%
12.89% 12.73%
Cash back 16.40%
16.40%
15.99%
Balance transfer 15.37%
15.38%
15.13%
Business 13.68%
13.68%
13.66%
Student 15.70%
15.70%
14.04%
Airline 16.07%
16.07%
15.77%
Reward  16.24%
16.24%
15.86%
Instant approval 18.60%
18.60%
18.32%
Bad credit 23.46%
23.46%
23.23%
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: Dec. 13, 2017

See related: Historic credit card rates chart, Fed: Card balances surged by $8.3 billion in October


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Updated: 07-18-2018