BACK

Rate Report

Rate survey: Average card APR rises to 15.20 percent

Summary

Dec. 14, 2016: The average APR on new card offers inched higher Wednesday after Capital One increased the APR on one of its cash back credit cards, according to the CreditCards.com Weekly Credit Card Rate Report.

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

The average APR on new card offers inched higher Wednesday after Capital One increased the APR on one of its cash back credit cards, according to the CreditCards.com Weekly Credit Card Rate Report.

The national average APR rose to 15.20 percent after remaining at 15.18 percent for nine weeks.

Capital One spurred this week’s rate change by bumping up the APR on the QuicksilverOne Rewards MasterCard to 24.99 percent. The cash back card for consumers with average credit previously charged new cardholders 23.24 percent.

Citi also edited card offers this week. It trimmed the promotional interest-fee balance transfer and purchase period on the Citi Thank You Preferred card from 15 months to 12 months.

Interest rates on new card offers are currently near record highs. Rates are likely to increase again across most cards after the Federal Reserve raises its benchmark interest rate, the federal funds rate. The Fed is expected to increase the federal funds rate by a quarter of a percent at its meeting Wednesday.

The Federal Reserve last rate hike was a year ago: On Dec. 15, 2015, the Fed raised rates by 0.25 percent. Most new card offers increased rates by the same amount, causing the national average APR to rise to near record highs. On Dec. 2, 2015, for example, the national average APR stood at 14.96. After the Federal Reserve increased rates in mid-December, the average APR rose steadily, eventually hitting 15.18 percent by early February.

Late payments expected to increase
As card APRs continue to increase, credit card balances become pricier to maintain, particularly for cardholders who are

already charged high APRs. According to a new analysis from the credit bureau TransUnion, cardholders who have a history of missing payments could respond to new rate increases by falling behind again on their bills.

In a Dec. 14 release, the credit bureau projected that credit card delinquencies – late payments by 30 days or more – will likely increase in 2017 as card APRs rise and more cardholders with limited incomes struggle to pay their higher balances. TransUnion also expects late payments on credit cards will become more common as a wider group of borrowers obtain new cards. Banks have become somewhat more willing in recent months to lend to borrowers with blemished credit histories. According to an August 2016 report from TransUnion, for example, 18 percent of all new credit card accounts approved in the first quarter of 2015 belonged to cardholders with subprime credit scores – up from 14.7 percent in 2015.

Since the Great Recession, credit card holders across the credit score spectrum have paid their bills on time more regularly, causing delinquency levels to remain near historic lows. But as the number of people opening credit card accounts continues to inch upward, analysts say more late payments are inevitable.

TransUnion expects delinquency on home and auto loans to swing wildly, and in opposing directions. It projects that serious auto loan delinquencies to rise 21 percent over their 2012 level, while it expects serious mortgage delinquencies to fall 61 percent below what they were in 2012. For credit cards, TransUnion predicts credit card delinquency levels will rise to 1.82 percent of all accounts by the end of 2017 – up a modest 3.7 percent from 2012.

“The consumer credit markets have been functioning extremely well the last few years, but an increase in subprime lending has begun to impact delinquency levels for some industries, specifically the auto finance and credit card markets,” said TransUnion’s Nidhi Verma in a news release. “On the credit card front, we have seen the percent of subprime accounts reach their highest level since the end of 2010.”

CreditCards.com’s Weekly Rate Report
Avg. APRLast week 6 months ago
National average15.20%15.18%15.18%
Low interest12.00%12.00%11.98%
Cash back15.38%15.33%15.32%
Balance transfer14.44%14.41%14.38%
Business13.16%13.16%13.12%
Student13.42%13.42%13.42%
Airline15.15%15.15%15.08%
Reward15.27%15.25%15.29%
Instant approval17.86%17.86%18.04%
Bad credit22.86%22.86%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: Dec. 14, 2016

See related:Yes, rates will rise on closed accounts with balances, Fed: Card balances up $2.3 billion in October

What’s up next?

In Rate Report

Rate survey: Average card APR holds steady at 15.18 percent

Nov. 23, 2016: The average APR on new credit card offers stayed put Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report.

Published: November 23, 2016

See more stories
Credit Card Rate Report Updated: September 18th, 2019
Business
15.45%
Airline
17.38%
Cash Back
17.52%
Reward
17.39%
Student
17.58%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.