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Rate Report

Rate survey: Average card APR falls to 17.71 percent

Summary

The average APR on new credit card offers slumped to a three-month low Wednesday after another major card issuer matched the Federal Reserve’s July 31 rate cut.

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The average APR on new credit card offers slumped to a three-month low Wednesday after another major card issuer matched the Federal Reserve’s July 31 rate cut. The national average APR dipped to 17.71 percent, which is the lowest weekly average CreditCards.com has recorded since early May.

Citi spurred this week’s rate change by trimming the APRs on Citi cards by a quarter of a percentage point. Citi is now the fourth major, nationwide bank to clip rates by the same amount as the Fed.

American Express, Wells Fargo and U.S. Bank also cut APRs earlier this month in response to the Federal Reserve’s rate change. In addition, a number of smaller banks have also matched the rate change, including Key Bank, Huntington Bank and Regions.

When the Federal Reserve changes its benchmark interest rate, the federal funds rate, lenders often adjust the APRs on new loans, such as new credit card offers. As a result, the national average APR could drop further in the coming weeks as more card issuers lower rates on new offers.

Among the largest credit card issuers, for example, Bank of America, Chase, Discover, Capital One and Barclaycard have not yet matched the Federal Reserve’s latest rate cut – at least not on new card offers.

See related:  Historic credit card interest rates chart

Despite cuts, average APRs still near record highs

Lenders aren’t required to match the Fed’s rate change, though, and some issuers may decide not to lower rates on new offers. In the past, most lenders have opted to increase rates on new offers when the Federal Reserve increases its benchmark rate. However, issuers have not always uniformly passed on the Fed’s rate cuts.

In addition, a number of issuers have independently hiked rates in recent months as they retool card offers and, in some cases, revise their credit card rewards programs.

As a result, average rates continue to remain near record highs, despite this month’s rate cuts. Three years ago, for example, the average card APR registered at just 15.18 percent. 10 years ago, it stood at 12.06 percent.

Maximum interest rates have also climbed in recent years as card issuers continue to advertise a wide range of APRs. Many credit card issuers, for example, advertise APR ranges as wide as 7 to 10 percentage points or more. As a result, the average maximum card APR currently stands at 25.07 percent. Meanwhile, the average median card APR registers at 21.39 percent.

See related:  Card balances dipped by $100 million in June, per Fed’s G.19 report

Bank of America sweetens some promotional offers       

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

Most credit card issuers left promotional offers alone this week. However, Bank of America extended its 0 percent APR offer on a number of cash back credit cards, including the Bank of America Cash Rewards credit card, the MLB Cash Rewards card and the World Wildlife Fund credit card.

Consumers who apply for a cash back card from Bank of America are now offered 15 billing cycles of interest-free balances – up from a previous maximum of 12 billing cycles.

CreditCards.com’s Weekly Rate Report

Avg. APR Last week 6 months ago
National average17.71%17.74%17.55%
Low interest14.67%14.69%14.57%
Cash back17.63%17.67%17.66%
Balance transfer15.59%15.60%16.72%
Business15.55%15.57%15.09%
Student17.69%17.69%17.79%
Airline17.50%17.53%17.39%
Rewards17.50%17.53%17.52%
Instant approval20.22%20.22%20.06%
Bad credit25.24%25.27%24.99%
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: August 14, 2019

What’s up next?

In Rate Report

Credit card interest rates chart

See key rates data from our weekly survey of card APRs covering 2007-2019

Published: August 14, 2019

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Credit Card Rate Report Updated: August 14th, 2019
Business
15.55%
Airline
17.50%
Cash Back
17.63%
Reward
17.50%
Student
17.69%

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