Interest rates on new credit card offers were unchanged, according to the CreditCards.com Weekly Credit Card Rate Report, following the return of the NFL Extra Points Rewards credit card.
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|CreditCards.com’s Weekly Rate Report|
|Avg. APR||Last week||6 months ago|
|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.)|
The national average annual percentage rate (APR) remained at 14.15 percent this week, holding steady at the lowest rate since mid-May. Though the overall national average wasn’t moved by the return of the NFL’s official credit card, the average APR for the rewards card category did dip slightly lower.
The National Football League card was previously pulled from our database in mid-April before the NFL announced it would move its credit card business from Bank of America to Barclays. The new NFL card debuted at Barclays in September, with APRs of 13.74 percent or 17.74 percent, depending on the borrower’s credit history. When asked about why those particular rates were chosen, Barclays said it would prefer not to supply information about how the bank sets its APRs.
When a card offers two APRs, we use the lower rate in our calculations. The NFL card’s new low rate brought down the average APR in the rewards category, but the rate wasn’t low enough to impact the overall national average.
Not the only change
The reintroduction of the NFL card wasn’t the only change we saw this week. The Cabela’s Club Visa changed from an APR range between 9.99 percent and 18.30 percent to between 9.99 percent and 18.25 percent. Cabela’s said the top end of the APR range declined due to a change in the London Interbank Offered Rate or Libor — the British equivalent of the U.S. prime rate. While most domestic cards are pegged to the prime rate, Cabela’s is tied to Libor.
While the latest card adjustments didn’t change the overall national average this week, APRs have moved higher so far in 2010. As a result, a typical cardholder who borrowed $5,000 on a credit card today and consistently paid $150 per month at today’s average interest rate would have to pay $6,390 to pay off the debt. That’s $156 more than would have been required on Jan. 1, 2010 (when the national average APR was 12.97 percent). (Calculator: How long will it take to pay off your credit card balance?)
Those higher costs are one of the ways that lending standards remain challenging, making credit cardholders both less willing and able to borrow money. Against that backdrop — and with ongoing fears about the economy spurring them to pay down debt — credit card balances plunged by more than $4 billion in July, accord to the Federal Reserve’s latest consumer credit report.
See related: Credit card lending standards keep tightening, Fed report says, Consumer credit card debt shrinks again in July, Calculator: How long will it take to pay off your credit card balance?, Credit card rates: interactive graphic on APR changes