December 13, 2007
Austin, Texas - Interest rates for select major credit card were mixed this week, as banks managed to avoid broadly sharing the Federal Reserve's latest interest rate cut with cardholders.
A majority of banks index their credit card annual percentage rates (APRs) to the prime rate, which moves in lock step with Federal Reserve decisions. According to the Fed, 54 percent of issuers tie card interest rates to prime, with most banks adjusting variable rates 30 days or one billing cycle after a change in the prime rate.
Of the nine card types tracked, four had higher rates this week, three were lower, and two were unchanged. Rates for card categories tracked by CreditCards.com are listed below:
|Credit Card Rate Averages|
On Tuesday, the Fed lowered the federal funds rate a quarter point to 4.25 percent. In its accompanying statement, the central bank dropped prior language that called growth and inflation risks essentially balanced, adding that it will "act as needed to foster price stability and sustainable economic growth," suggesting more rate cuts could follow.
Economic data showed that consumers continued to use plastic. The central bank's October consumer credit numbers showed an 8.3 percent increase in revolving credit, which includes credit cards. Meanwhile, November retail sales sharply outpaced expectations.
The CreditCards.com credit card rate survey is conducted weekly using data from the leading card issuers in the United States.
Introductory offer periods and regular interest rates can vary depending on applicants' credit quality and issuer risk-based pricing policies.
CreditCards.com is a leading online credit card marketplace connecting consumers with multiple credit card issuers, including nine of the ten largest in the United States, based on credit card transaction volume. Through its website, https://www.creditcards.com/, CreditCards.com enables consumers to search for, compare and apply for more than 150 credit cards and offers credit card issuers an online channel to acquire qualified applicants.
For more information, contact:
Director of Marketing
512-996-8663, ext. 106
NOTE TO EDITORS: The information contained in this release is available for print or broadcast with attribution to CreditCards.com.