Rate survey: Average card APR climbs to record high of 16.14 percent

The average APR for new credit card offers hit another record this week, according to the CreditCards.com Weekly Credit Card Rate Report.

The average credit card APR inched up to an all-time high of 16.14 percent, from a previous high of 16.13 percent.

Citi was responsible for this week’s rate change. It increased the available APR on the Citi Thank You Preferred card for College Students by half a percentage point. Students who apply for Citi’s only student credit card are now offered a range of APRs, starting at 15.49 percent and maxing out at 25.49 percent.

As a result, the average APR for new student credit cards has climbed to 15.70 percent – up from an average APR of 13.42 percent in August 2016.

It has been a highly active year for credit card increases, nearly all in the upward direction, as card issuers have boosted rates to match a series of rate increases by the Federal Reserve. So far in 2017, our weekly survey of 100 widely held cards found rates have increased 20 times, stayed the same 11 times and fallen just twice. 

Premium card options continue to expand
The number of high-value premium cards that affluent cardholders have to choose from is continuing to expand. Bank of America is getting ready to launch a new elite card that richly rewards Bank of America deposit account holders who can afford to stash $20,000 to $100,000 or more in a bank account.

The new Bank of America card is expected to launch in September, according to The Wall Street Journal, and will award cardholders with extra large bank account balances – totaling $100,000 or more – up to 3.5 points for every dollar spent on travel and dining and up to a maximum of 2.6 points for every dollar spent on general purchases. Depending on how much cardholders spend, that could translate into $1,000 or more in rewards by the end of the year.

Cardholders with more modest bank account balances will be eligible to receive at least 2 to 3 points per dollar spent on travel and dining, depending on how much money they have saved, and 1.5 to 2.25 points on general purchases. Cardholders who spend at least $3,000 in the card’s first three months will also receive a 50,000-point sign-up bonus.

The new Bank of America card will charge a lower annual fee ($95) than other premium cards with comparable returns. But despite the lower fee, analysts are already grouping it with other super premium cards – most of which charge annual fees as high as $450 or more – that give away hundreds of dollars worth of rewards every year.

Over the past year, super premium credit cards with plump annual fees and extra generous benefits have become a hot topic in rewards circles. In August 2016, the Chase Sapphire Reserve card was introduced to the market and quickly became a megahit with value seekers, thanks in part to its unprecedented sign-up bonus and lucrative rewards.

Since then, U.S. Bank has also entered the premium card market with the Altitude Reserve card, a high annual fee offering that richly rewards tech-savvy cardholders who use their phones to make purchases.

Meanwhile, longtime premium cards, such as the American Express Platinum and the Citi Prestige, also have revamped their offerings to stand out from their elite card competitors. The Platinum card, for example, recently added richer card perks, such as $200 worth of Uber credits and bigger travel bonuses. Meanwhile, the Citi Prestige card updated its signature travel perk – a free fourth night at the hotel of your choice – and bumped its sign-up bonus up to 75,000 points.*

Despite the bigger rewards and larger number of premium cards, elite benefits are becoming harder to obtain – particularly if you have a limited budget. Citi, for example, increased the amount you have to spend in order to earn the Citi Prestige card’s lucrative sign-up bonus to a high bar of $7,500 in spending. Most premium cards, by contrast, require less than $4,000 in spending to earn a sign-up bonus.

Meanwhile, American Express increased the Platinum card’s annual fee to $550, while Chase cut the Chase Sapphire Reserve card’s sign-up bonus in half to 50,000 bonus points.

Even the new Bank of America premium rewards card’s tiered rewards system indicates that premium card issuers are largely focusing on cardholders with a lot of cash. For example, premium cardholders who don’t have at least $20,000 stashed away in a Bank of America account will earn just 2 points for travel and dining purchases on the new Bank of America card and 1.5 points for general purchases. If you don’t want to spend $95 on an annual fee, you can earn a comparable return from cards with no annual fee.

*The content on this page is accurate as of the posting date. Please see the bank’s website for the most current version of card offers.

 

CreditCards.com’s Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 16.14% 16.13%
15.50%
Low interest 12.88%
12.87% 12.36%
Cash back 16.37%
16.37%
15.61%
Balance transfer 15.36%
15.36%
14.76%
Business 13.68%
13.68%
13.41%
Student 15.70%
15.64%
13.67%
Airline 16.06%
16.06%
15.40%
Reward  16.23%
16.22%
15.57%
Instant approval 18.57%
18.57%
18.09%
Bad credit 23.46%
23.46%
23.01%
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: Aug. 16, 2017

See related: 6 times to forgo big rewards and go for a plain, simple card, Limited-time credit card offers and promotions


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Updated: 11-24-2017