Rate survey: Average card rate increases to 14.99 percent

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

The national average annual percentage rate (APR) rose to 14.99 percent Wednesday after Capital One increased rates on nearly all of its cards. 

The nationwide issuer subtly raised interest rates this week by increasing the APRs on most of its cards by 0.09 percent. For example, the QuicksilverOne card now charges new cardholders an APR of 22.99 percent, up from 22.90 percent, while the Capital One Platinum card charges 24.99 percent. Capital One also increased the Journey Student Rewards card's APR from 19.80 percent to 19.99 percent.

Variable rate cards tied to the U.S. prime rate may also receive a small rate hike this week. The Federal Reserve is expected to raise interest rates for the first time since June 2006.

When that happens, card APRs that are tied to the U.S. prime rate, which is directly influenced by the Federal Reserve's federal funds rate, will increase as well. By law, card issuers may pass along these increases without notice.

The change in interest rates is expected to be minor. However, if you currently have credit card debt, you could see a small increase in the total amount you owe as the Federal Reserve gradually expands rates.

Missing credit card payments inch up
More consumers are falling behind on their card payments, according to new research from the credit rating agencies Experian and S&P.

The default rate for bank-issued credit cards rose in November after issuers recorded slightly more late payments by 180 days or more.

The small increase in severely late payments could mean that a growing number of consumers are financially struggling and having a harder time paying their bills. An increase in missed payments may also signal that a larger number of banks are loosening their requirements and approving more cardholders with a history of falling behind on bills.

Other types of loans, including auto and mortgage loans, also saw small increases in severely delinquent payments, according to the report.

"November was the second consecutive month when default rates rose across all types of consumer credit," said the S&P's David M. Blitzer in a Dec. 15 news release. "While two months isn't long enough to establish a turning point or a new trend, the consumers' financial condition should be watched going forward. "

Despite last month's increase in missed payments, late payments on bank-issued credit cards are still near record lows.

In a report released earlier this month, the credit bureau TransUnion predicted late payments by 90 days or more are likely to end the year at just 1.46 percent of all accounts. If so, this will be the fourth year in a row where late payments remained below 1.5 percent, said TransUnion. In 2009, issuers reported around twice the number of missed payments as they do now, the credit bureau added.

Meanwhile, card issuers are responding to cardholders' responsible use of credit by approving a larger volume of applicants, including cardholders with lower credit scores. According to TransUnion, the total number of cards in circulation grew by more than 14 million between 2014 and 2015. In 2009, there were at least 31 million fewer cards in circulation than there are today, said the credit bureau.  

"As delinquency rates for credit cards remain low, lenders are making credit cards increasingly more available to consumers across the risk spectrum," said TransUnion's Ezra Becker in a Dec 9 news release. "Those consumers are generally accepting those card offers, using that card credit and managing the debt responsibly. In short, these are the hallmarks of a credit market that is functioning extremely well."

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.99% 14.98%
Low interest 11.67%
11.66% 11.62%
Cash back 15.27%
Balance transfer 14.08%
Business 12.87%
Student 13.17%
Airline 14.92%
Reward  15.12%
Instant approval 18.00%
Bad credit 22.75%
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. 16, 2015

See related: Fed: Card balances rise only 0.2 percent

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Updated: 02-21-2019