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June 11, 2009

Weekly Averages:

• Average consumer credit card rate, overall market: 14.67%
• Average credit card rate, non-reward consumer cards: 13.24%
• Average reward credit card rate: 15.28%
• Average student credit card rate: 15.33%
• Average business credit card rate (non-reward): 12.66%
• Average business reward credit card rate: 13.49%

Average Credit Card Rates Hit 52-Week High
Average credit card rates rose significantly in all categories again this week, reaching the highest levels seen in the last 12 months --- actually, the highest since February of 2008. The average rate for credit cards across all consumer sectors jumped to 14.67%, up a half-point in just the last month. Issuers continue to re-price based on market conditions as well as in anticipation of business practice restrictions spelled out in the recently passed credit card law.

(In pinpointing a single "average" rate, IndexCreditCards attempts to include all of the various rate tiers that card issuers offer based on an applicant's credit history, as well as the different rates associated with non-reward versus reward cards. Consumers with better credit histories can often find offers well beneath this average, while those with bad credit histories will likely be offered rates higher than the average.)

The average credit card rate for non-reward consumer credit cards increased to 13.24%, up from 12.92% last month. The average rate for credit cards offering rewards jumped to 15.28%, from 14.89% a month ago.

While the averages listed above attempt to take into account the multiple tiers that many credit card issuers offer, IndexCreditCards.com also tracks the very lowest listed rates, those reserved for customers with the very best credit. This week those averages are 11.17% for the market as a whole (10.80% last month), with a 9.86% average for non-reward cards (previously 9.55%) and a 11.73% average for consumer cards with rewards (11.33% previously).

Rates on student credit cards are now rising rapidly. The average rate for student cards jumped to 15.33%, up significantly from 14.72% last month. Under the new credit card law, students will have a much more difficult time acquiring new cards at all --- they must be over 21 or be able to show proof of income under the new law, otherwise they will require a co-signer to be approved. This will undoubtedly shrink the student card market significantly.

Business credit card rates also continue to rise. The average rate for non-reward business credit cards increased to 12.60% (from 12.24%), while the average rate for business credit cards with rewards increased to 13.49% (up from 13.25% in our last report).

Financial institutions represented in the survey include American Express, Bank of America, Capital One, Chase, Citi, Discover, HSBC, PNC/National City, Pulaski Bank, Simmons National Bank, U.S. Bank, Wells Fargo, and more.

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