Credit Card Rates Archive - July 31 2010
- Average consumer credit card rate, overall market: 16.79%
- Average credit card rate, non-reward consumer cards: 15.22%
- Average reward credit card rate: 17.46%
- Average student credit card rate: 16.23%
- Average business credit card rate (non-reward): 13.75%
- Average business reward credit card rate: 15.92%
Credit card rates on new consumer accounts came down by a smidgen in the last two weeks, according to the latest IndexCreditCards.com sampling.
The average rate offered on all consumer accounts dropped to 16.79% from 16.85%. The decrease was due to a decline in the average rate for non-reward credit cards to 15.22%, down from the earlier average of 15.43%. Average reward credit card rates stayed the same at 17.46%.
Although any decrease is welcome, the rates are still well above their levels from a year ago when the average overall consumer rate was still below 15%. Average rates escalated throughout 2009 as issuers braced themselves for new regulations stemming from the Credit CARD Act, signed into law in May that year. Average rates broke the 16% barrier in December 2009 for the first time since IndexCreditCards.com began tracking rates in 2005. They have continued rising in 2010, but at a slower pace than the year before.
Student credit card rates also dropped slightly this month to 16.23% from 16.27%. Under new federal credit card regulations, credit card companies can no longer market cards on college campuses or give free merchandise to students just for filling out applications. They also must require students under 21 to get adult co-signers or provide information showing they have independent means to pay off any credit that's extended.
The federal Credit CARD Act's rules don't apply to business credit cards. Rates for small businesses have remained fairly stable in the last few months. However, this month, business reward credit card rates rose to 15.92% from the early July level of 15.74%. Non-reward business credit card rates stayed the same at 13.75%.
To pinpoint an average credit card rate, IndexCreditCards.com takes into account all the rates offered for each card included in the survey sample. Many credit cards offer tiered rates, with the lowest rates reserved for customers with excellent credit and the highest rates for applicants that have poor credit.
The average rate offered to consumers with excellent credit is 11.17% for non-rewards cards and 12.92% for rewards cards.
This rate survey coincides with release of a new report by the Pew Charitable Trusts that finds most of the practices considered unfair or deceptive by the Federal Reserve have disappeared from new credit card offers since the federal Credit CARD Act was signed into law. But Pew's study also finds a troubling rise in cash-advance fees and a trend toward credit card companies failing to disclose penalty interest rates in their online terms and conditions. Companies are allowed to hike interest rates on an existing balance if the customer is more than 60 days behind on payments.
Meanwhile, despite predictions that new regulations would trigger new fees, Pew found minimal change in the number of cards that charge an annual fee, although it noted an increase in the median size of those fees.
Clearly, though, new regulations were followed by a rise in interest rates offered on new accounts, despite the slight decrease in average rates in the latest sampling.
Financial institutions represented in the IndexCreditCards.com survey include American Express credit cards, Bank of America, Capital One, Chase, Citi, Discover, HSBC, PNC/National City, Iberia Bank, Simmons National Bank, U.S. Bank, Wells Fargo, and more.
Published 07/31/10 (Modified 05/14/14)