Rate survey: Average card APR climbs to 15.72 percent

By  |  Published: April 12, 2017

Kelly Dilworth
Personal Finance Writer
Specializing in new trends in credit

The national average APR on new card offers inched up again this week, according to the CreditCards.com Weekly Credit Card Rate Report.

The average APR for new card offers rose to 15.72 percent after two more cards matched the Federal Reserve’s March 2017 rate change.

Most issuers have now boosted rates in response to the Federal Reserve’s rate change, causing the average APR to rise four weeks in a row. Since March 15, eight of the country’s biggest issuers, including Bank of America, Discover, Capital One, American Express, U.S. Bank, Citi, Barclaycard and Wells Fargo have increased rates on most new card offers by 0.25 percent. Several regional banks have also increased APRs.

As a result, the national average APR has risen to its highest point since CreditCards.com began tracking rates in mid-2007.

Card debt grows; consumers turn to credit for everyday purchases
Consumers are relying more heavily on their credit cards after pulling back somewhat earlier in the year. According to new research released April 7 by the Federal Reserve, consumer credit card balances grew by 3.5 percent in February after shrinking by 3.2 percent the previous month.

The uptick in card usage helped push total outstanding credit card debt back over the $1 trillion mark. Card debt surpassed $1 trillion for the first time in nearly eight years in December before dipping back below $1 trillion the following month. 

As credit card balances return to pre-recession levels, credit card holders are using their cards for a wider array of purchases. According to a national poll released this week by CreditCards.com, a growing number of Americans pay by credit cards for small purchases, such as $4 lattes or $2 packs of gum.

Seventeen percent of respondents said they primarily use credit for purchases that cost less than $5, up from 11 percent of consumers in 2016. Consumers are also relying less on cash and debit cards for small purchases, the survey found. Just 24 percent of consumers, for example, said they use debit cards for all or most of their small-dollar buys, down from 27 percent the previous year. Meanwhile, 55 percent of consumers said they’d rather use cash for small purchases, down from 58 percent in 2016.

According to a December 2016 study by the Federal Reserve, credit card payments are growing at a significantly faster clip than debit card payments, even though debit cards are substantially more popular overall. Between 2012 and 2015, for example, the number of times consumers used credit for a purchase rose by 8 percent. The number of times consumers used debit, by contrast, grew by just 7.1 percent.

Despite charging more of their purchases to high interest cards, consumers appear to be staying on top of their bills. According to an April 6 report from the American Bankers Association, late payments on bank cards declined in the past three months of 2016 after rising slightly the previous quarter. “Consumers’ disciplined use of credit cards continued, which kept debt levels manageable and delinquencies near historical lows,” said the American Bankers Association’s in a news release.

At 2.69 percent, the delinquency rate for bank-issued credit cards is currently well below the 15-year average of 3.66 percent, says the trade group.  

CreditCards.com Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.72% 15.71%
15.18%
Low interest 12.57%
12.56% 12.00%
Cash back 15.77%
15.76%
15.33%
Balance transfer 14.99%
14.98%
14.41%
Business 13.64%
13.62%
13.12%
Student 13.92%
13.92%
13.42%
Airline 15.73%
15.73%
15.13%
Reward  15.80%
15.79%
15.24%
Instant approval 18.23%
18.23%
17.86%
Bad credit 23.20%
23.20%
22.86%
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: April 12, 2017

See related: Consumer debts rise, but fears of missing payments fall, Poll: You can get better credit card terms just by asking


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Updated: 10-23-2017

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