Credit card interest rates end year at 15.06 percent

A year of stability ends with APRs 0.1% higher than a year ago's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.06%
Low interest 10.46%
10.46% 10.37%
Balance transfer 12.55%
Business 12.98%
Cash back  14.62%
Airline  14.51%
Reward 14.91% 14.91%
Instant approval 28.00%
Bad credit 23.48%
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. 31, 2013

Interest rates on new card offers held firm this week, according to the Weekly Credit Card Rate Report.

The national average annual percentage rate (APR) remained at 15.06 percent Tuesday for the seventh straight week.

None of the cards tracked by advertised new interest rates. Promotional terms, including introductory APRs and balance transfers, remained unchanged as well.

Rates remain stable
According to data, 2013 was the most stable year for credit card APRs since began tracking rates in mid-2007. (See chart: Credit card APR movement slows to a crawl)

Throughout 2013, the national average APR stayed in a narrow range, never varying by more than 0.04 percent from one week to the next. It ended up just one-tenth of a percentage point higher than at the start of 2013.

The national average APR changed just 14 times in 2013. In 2012, average rates changed 16 times. 

In previous years, credit card rates changed far more often. In 2010, when credit card issuers were contending with new federal regulations that resulted from the Credit CARD Act of 2009, interest rates increased 23 times and decreased 18 times. By the time 2010 ended, average APRs on new card offers jumped by nearly 2 percentage points over the span of 12 months.

Since then, card APRs have become substantially more sticky, with most offers remaining untouched for months -- and sometimes even years -- at a time.  

Promotional terms get sweeter
Issuers have tinkered with promotional terms much more frequently. Since January, for example, balance transfer offers have gotten longer and promotional APRs have become more ubiquitous.

Among the 100 cards tracks, 35 cards now feature 0 percent interest -- or exceptionally low interest -- on purchases for nine months or more. That's up from 28 cards in early January.

Credit card issuers are also giving some cardholders more time to make interest-free purchases. Thirteen cards, for example, now feature a promotional APR that lasts for 14 months or more -- up from 11 cards earlier this year.

In addition, many issuers have become more generous with promotional balance transfer offers. Among the 100 cards that tracks, 33 advertise a promotional APR on balance transfers for 12 months or more -- up from 28 in January. Ten of those cards give cardholders even longer -- 15 months or more -- to take advantage of a promotional balance transfer rate.  

Consumers' outlook brightens
Consumers, meanwhile, have become substantially more optimistic about the future in recent weeks, after briefly losing confidence in the fall.

According to research released Dec. 31, consumers reported feeling better about the economy's current outlook than they have since 2008.

"Consumer confidence rebounded in December and is now close to pre-government shutdown levels," said The Conference Board's Lyn Franco in a statement.

Consumers were much more anxious about their income prospects, said Franco, with fewer consumers expecting a raise in the months ahead. Despite lower income expectations, consumers have a lot more faith in the job market nowadays than they did earlier this year.

"Despite the many challenges throughout 2013, consumers are in better spirits today than when the year began," said Franco. Fewer Americans are worried that a job will be hard to come by if they lose the one they have now. And a significantly larger number of consumers expect businesses will have an easier time over the next six months as the economy gradually improves.

Year Lowest APR Highest APR No. of weeks rates increased No. of weeks rates decreased No. of weeks unchanged
2009 11.58% 13.14% 27 16 10
2010 12.87% 14.78% 23 18 11
2011 14.65% 15.22% 16 11 25
2012 14.87% 15.14% 7 9 36
2013 14.93% 15.06% 9 5 39
Source: Weekly Rate Report, a weekly survey that gathers data on 100 of the most widely used credit cards in the U.S.

See related: Fed starts 'taper,' begins weaning off support for low rates, 12 credit card predictions for 2014

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Updated: 03-24-2019