Research and Statistics

Credit card interest rates remain near record highs

Credit card interest rates on new card offers were unchanged this week, lingering near record highs.’s Weekly Rate Report
 Avg. APRLast week 6 months ago
National average14.73%14.73%14.35%
Low interest12.03%12.03%12.11%
Cash back 12.48%12.48%12.49%
Balance transfer12.93%12.93%12.81%
Reward 14.36%14.36%14.43%
Instant approval15.99%15.99%15.99%
Bad credit24.95%24.95%20.89%
Methodology: The national average credit card APR is comprised of about 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: 2-9-2011

The average annual percentage rate (APR) on new credit card offers held steady at 14.73 percent, according to Weekly Rate Report — just shy of the record 14.78 percent reached in November.

None of the issuers that tracks made APR moves this week, marking the sixth time in 11 weeks that the national average has remained unchanged. During that period, the national average has declined only once and has risen four times, though each rise has been statistically small.

This notable stickiness in average APR rates is a significant departure from earlier years when weekly changes to the national average were often more fluid. According to data, average APRs haven’t risen by more than a tenth of a percentage point in the past 16 weeks. However, they also haven’t dipped by that amount in the past 10 weeks. Contrast that to early 2010, when the national average shot up nearly 2 full percentage points — from 12.87 percent to 14.62 — in just eight weeks leading up to enactment of major provisions of the Credit CARD Act.

Card issuers have appeared reluctant in recent weeks to make any changes to their APRs on new card offers. Among the more than 30 card issuers that tracks, only four banks — Barclays, Chase, Citi and State Farm — have made changes to standard purchase APRs for new card offers since the beginning of the New Year.

Why the lack of movement?
Experts say that issuers’ hesitancy to make major changes to their card offers and return APRs to historical norms stems, at least in part, from banks’ continued anxiety toward federal regulations. This month marks the one-year anniversary of major provisions of the Credit CARD Act taking effect. According to data, interest rates shot up to record highs around the same time — topping 14 percent for the first time since began tracking rates in mid-2007.  

Issuers argue that they are burdened by the CARD Act’s regulations and, as a result, their ability to turn a profit now hinges on tighter credit card offers, including those with higher rates. Many banks began increasing rates shortly before major provisions of the Credit CARD Act took effect and, according to data, the moves were historic. In 2008 and 2009, credit card APRs hovered between 11 percent and 13 percent, topping the latter number only rarely. However, on Feb. 3, 2010, just three weeks before the regulations became active, the national average for new card offers shot up nearly 1 percentage point to 14.12 percent — a record high at the time. The national average hasn’t dipped below 14 percent since, and banks show no signs of bringing interest rates back down in the near future.

Meanwhile, the Boston Consulting Group released a report Tuesday that may stoke banks’ fears about federal regulations even further. The authors of the report point to lost revenues that banks have sustained since the CARD Act took effect and warn that if banks don’t significantly retool their business models, they will continue to see record profit losses in the future.

“The credit card business continues to be plagued by above-average charge-offs, the effects of the CARD Act and shifts in consumer behavior,” the authors write. “Unfortunately, better days do not seem to be near. Although the level of charge-offs is declining slowly, persistently high unemployment … will hinder rapid improvement. In addition, the impact of the CARD Act is expected to be long lasting, which will intensify competition for a shrinking group of attractive customers.”  

In the report, the authors forecast a dire future for banks in which credit card issuers’ profits are battered by new and existing credit card regulations. The authors predict that increased regulation, including the Credit CARD Act, will soon cost the credit card industry a whopping $25 billion in annual revenue.  

The group’s ominous forecast appeared just a day after the Federal Reserve reported that consumer credit card debt rose in December for the first time in more than two years, indicating that American cardholders are regaining their appetite for credit in spite of the record high rates.  

See related: Consumer credit card debt sees first jump in more than two years, An interactive guide to the Credit CARD Act

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Credit Card Rate Report Updated: August 14th, 2019
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