Rate survey: Average card APR climbs to all-time high of 15.83 percent

By  |  Published: June 7, 2017

Kelly Dilworth
Personal Finance Writer
Specializing in new trends in credit

 

The national average interest rate for new card offers reached another all-time high this week, according to the CreditCards.com Weekly Credit Card Rate Report.

For the first time on record, the national average annual percentage rate rose to 15.83 percent. Before this year, the highest average APR CreditCards.com recorded was 15.29 percent.

Citi helped power this week’s rate hike by increasing the minimum APR on its elite card, the Citi Prestige card, to 16.49 percent. It also added a maximum APR of 24.49 percent. Previously, cardholders were offered one flat rate of 15.99 percent.

The sporting goods store Cabela’s also boosted rates this week. It increased the lowest available APR on the Cabela’s Club Visa to 16.04 percent and the maximum APR to 22.04 percent.

Meanwhile, the retail giant Gap increased the APR on the Gap Visa credit card from 25.49 percent to 25.74 percent. 

Recession-scarred borrowers see new spike in credit scores
Millions of consumers who saw their credit scores tank during and immediately after the Great Recession have bounced back, according to new research from the credit scoring company FICO, and are enjoying markedly higher scores today.

FICO analyzed the credit scores of roughly 28 million consumers who missed a payment by 90 days or more in 2009 and 2010 and found that a substantial number of consumers have improved their scores so much that they could potentially qualify for the best available rates on credit cards and other loans.

For example, consumers whose credit reports were cleared of all “serious delinquencies” – late payments by 90 days or more – between May 2016 and July 2016 enjoyed a 33-point score increase, on average. About 3 in 10 of those consumers – 28 percent – saw their credit scores rise by 50 points or more.

As a result, the percentage of cardholders who missed bills during the Great Recession, but now enjoy an excellent credit score above 700 after seeing all their serious delinquencies removed, rose by nearly 6 percentage points last year. “‘Full recovery’ consumers have put the credit struggles from a period of extreme economic stress behind them, re-established credit, demonstrated responsible management of that credit and have experienced higher FICO score increases as a result,” wrote FICO’s Ethan Dornhelm in a blog post.

Under the Fair Credit Reporting Act, credit reporting companies must delete most negative entries, such as collection accounts and 90-day late payments, after a maximum of seven years. Bankruptcies can stay on credit reports for up to 10 years.

Not everyone enjoyed such a high score increase, though. Many consumers who missed payments by 90 days or more during and immediately after the recession are still struggling with their finances and, as a result, they’ve seen smaller increases in their scores. For example, roughly half of consumers – 49 percent – who had at least one 90-day delinquency removed from their credit reports experienced a score increase of just 29 points or less.

FICO says that the modest upticks can be explained, in part, by ongoing struggles with bills. Many consumers who experienced a negative credit shock during the Great Recession are still having a hard time breaking bad habits or fully recovering from financial bad luck.

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.83% 15.82%
15.18%
Low interest 12.73%
12.73% 12.00%
Cash back 15.99%
15.99%
15.33%
Balance transfer 15.13%
15.13%
14.41%
Business 13.66%
13.66%
13.16%
Student 14.04%
14.04%
13.42%
Airline 15.77%
15.77%
15.15%
Reward  15.86%
15.85%
15.25%
Instant approval 18.32%
18.30%
17.86%
Bad credit 23.23%
23.23%
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: June 7, 2017

See related: A second credit card: When it's wise to get one, when it's not


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Updated: 10-23-2017

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