Credit card interest rates unchanged after holiday

But experts see signs that lenders' grip on credit may be loosening

Credit card issuers took a holiday from raising interest rates this week, as experts began to see signs that consumers' access to credit may be starting to ease.'s weekly rate chart
  Avg. APR Last week 6 months ago
National average 12.71% 12.71% 12.25%
Business 9.74% 9.74% 10.24%
Low interest 11.65% 11.65% 11.77%
Cash back 12.08% 12.08% 12.24%
Balance transfer 12.13% 12.13% 10.46%
13.29% 13.29% 13.30%
Instant approval
13.32% 13.32% 11.57%
Airline 13.60% 13.60% 13.21%
Bad credit 13.74% 13.74% 11.74%
Student 14.89% 14.89% 14.52%
Methodology: The national average credit card APR is comprised of 95 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: 12-3-2009

Banks left annual percentage rates on new credit card offers unchanged at 12.71 percent, according to the Weekly Credit Card Rate Report, giving a welcome break to cardholders. Consumers have had to deal with increasingly costly borrowing terms, as banks struggle to protect their profits in the face of increased regulation, as well as cardholder delinquencies spurred by the economic downturn. Over the past six months, the national average APR has risen nearly a half point from an average of 12.25 percent in July.    

Nevertheless, some experts say the situation is improving. "Credit conditions remain tight, but we are starting to see indications that standards will ease through 2010," says Robert Dye, senior economist with the PNC Financial Services Group in Pittsburgh, Pa. 

Federal Reserve data support that outlook. On Wednesday, the Fed's Beige Book survey of its regional banks showed eight of 12 regions noting some pickup in activity or improvement in conditions. Banks reported that credit standards remained tight, with half of the banks reporting increasingly tight credit standards. Still, only four regions -- New York, Philadelphia, Dallas and San Francisco -- reported signs of deteriorating credit quality, while Cleveland, Chicago and Kansas City characterized credit quality as stable or mixed and Chicago pointed to some improvement outside of commercial real estate.

Fed Chairman Ben Bernanke, meanwhile, used his Thursday confirmation hearing before the Senate Banking Committee to highlight the central bank's response to "extremely trying conditions" over the past two years. Bernanke's current four-year term ends on January 1. Although President Obama has already nominated Bernanke for another term, the full Senate must approve the Fed chief to allow him to keep his position. They're expected to do that soon.

Among other steps taken toward the central bank's goals of strengthening the labor market and keeping inflation in check, Bernanke highlighted the Fed's special programs, including the central bank's Term Asset-Backed Securities Loan Facility program. Bernanke said the TALF has so far helped finance more than 100 million credit card accounts. Dye questioned Bernanke's math. "We don't know how many accounts would have folded without the TALF," Dye says. The TALF program seeks to encourage lending by providing banks with cheaper financing for card debt.

The Fed chief has his fair share of opposition, including those angered by a banking collapse they believe the Fed did too little to prevent. Still, Dye says that the Fed's monetary policy decisions -- such as lowering lending rates to nearly zero -- have helped the economy through a rough patch. Fed programs have had a "major stabilizing effect on U.S. financial systems and prove to be foundational in the developing economic recovery," he says.

In the meantime, both cardholders and banks would be advised to avoid repeating the recent mistake of taking on excessive debt. "Households and businesses were too highly leveraged leading up to the financial crisis. I would hope one of the lessons learned from that is too much leverage can be a very dangerous thing," Dye says.'s weekly credit card rate survey is based on a sample of about 95 national credit cards; the sample is chosen to be representative of the most frequently used cards by both popularity and type. That sample is updated as cards come and go from the market, and as the popularity among different types of cards shift.  

See related: A comprehensive guide to the Credit CARD Act of 2009

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Updated: 03-24-2019