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Rate survey: Average card APR rises to 17.73 percent

Summary

The average APR on new credit card offers rose again Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report.

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The average APR on new credit card offers inched higher Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report. The national average annual percentage rate (APR) climbed back to 17.73 percent after briefly dipping to 17.72 percent the previous week.

Every week, CreditCards.com evaluates the APRs, annual fees and promotional terms of 100 U.S. credit cards.

See related:  Historic credit card interest rates chart

Rate hike driven by increase in airline cards’ APRs

This week, the national average APR inched higher after Bank of America revised the APR on one of its airline credit cards. Bank of America increased the APR on the Alaska Airlines Visa Signature® credit card by 1 percentage point, causing the average APR for all credit cards included in the weekly rate report to increase.

Consumers who apply for the Alaska Airlines card are now offered a range starting at 18.24 percent variable and maxing out at 26.24 percent variable.

Bank of America also added new promotions to the premium airline card, which requires a $75 annual fee. Cardholders are now awarded a 20 percent discount on inflight Alaska Airlines purchases when they use their Alaska Airlines card.

In addition, cardholders can now get 50 percent off day passes to an Alaska Airlines airport lounge. Previously, if you were an Alaska Airlines Visa Signature cardholder, you had to spend $50 on a day pass or up to $450 for an annual membership.

In a separate move, Bank of America also recently began waiving day pass fees for active duty servicemembers. Servicemembers who are flying on orders from the military can now access Alaska Airlines airport lounges for free.

Bank of America left other Alaska Airlines perks alone. For example, cardholders continue to get 3 miles per dollar spent on eligible Alaska Airlines purchases and 1 mile per dollar spent on other purchases. In addition, cardholders are awarded 40,000 bonus miles after they charge $2,000 within the card’s first 3 months and are given a deeply discounted companion fare every year.

See related:  Guide to rising credit card interest rates

Average card rates remain at record highs

Average credit card interest rates are currently at their highest point on record, thanks in part to ongoing federal rate increases and more generous benefits on select cards.

When the Federal Reserve increases its benchmark interest rate, the federal funds rate, most variable-rate credit cards increase rates by the same amount.

A number of card issuers have also independently hiked APRs in recent months, causing the national average to increase.

Earlier this year, for example, Bank of America increased the APRs on all of its cash back credit cards after retooling its rewards program and offering a more flexible way to earn cash back. Bank of America also recently increased the APR on its secured credit card, the BankAmericard Secured Mastercard.

Meanwhile, Capital One recently increased the APRs on some of its rewards credit cards, including its signature cash back and travel cards, the Capital One Quicksilver Cash Rewards Credit Card and the Capital One Venture Rewards Credit Card. Earlier in the year, it also increased the APRs on its line of cards for consumers with average credit.

Chase has also been actively retooling card offers in recent months. For example, it increased the minimum APR on the Chase Sapphire Reserve card from 17.99 percent to 19.24 percent variable. It also pushed the card’s maximum APR from 24.99 percent to 26.24 percent variable. Similarly, it increased the minimum APR on the Chase Sapphire Preferred Card to 18.24 percent variable and the maximum APR to 25.24 percent variable.

The higher rates on new card offers are a big departure from previous years when consumers shopping for a new card typically saw much lower rates.

On June 5, 2016, for example, the average rewards credit card charged a minimum APR of just 15.30 percent. Meanwhile, the average airline card charged a minimum APR of 15.17 percent. Since then, average rewards card APRs have climbed by more than 2 percentage points.

CreditCards.com’s Weekly Rate Report

Avg. APR Last week 6 months ago
National average17.73%17.72%17.15%
Low interest14.71%14.71%14.19%
Cash back17.68%17.68%17.18%
Balance transfer15.63%15.63%16.33%
Business15.61%15.61%14.78%
Student17.79%17.79%17.30%
Airline17.54%17.50%17.12%
Rewards17.57%17.55%17.14%
Instant approval20.24%20.24%19.83%
Bad credit25.33%25.33%24.34%
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 5, 2019

What’s up next?

In Rate Report

Rate survey: Average card APR slips to 17.72 percent

The average APR on new credit card offers dipped Wednesday for the first time in nine months, according to the CreditCards.com Weekly Credit Card Rate Report.

Published: June 5, 2019

See more stories
Credit Card Rate Report Updated: June 12th, 2019
Business
15.61%
Airline
17.54%
Cash Back
17.68%
Reward
17.57%
Student
17.79%

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