Average Credit Card Rate Tops 13 Percent
NOTE:
To offer content from IndexCreditCards.com, including our weekly
summary of credit card rates, Credit
Card Monitor, in your publication or on your Web site, please
contact syndicate@indexcreditcards[dot]com.
Average Credit Card Rate Tops 13 Percent
Tuesday's
hike in federal interest rates -- the fourteenth straight hike
from the Federal Reserve -- helped push the average credit card
interest rate past the 13 percent mark, according to the weekly
IndexCreditCards.com Credit Card Monitor. Major credit card
issuers including Bank of America, Citibank, National City,
US Bancorp and Wells Fargo announced increases in their lending
rates in response to the Fed hike, meaning another quarter-point
bump for holders of these issuers' variable-rate credit cards.
Variable-rate credit cards offer interest rates based on a formula
that includes a base rate plus a percentage tied to federal
lending rates. When federal rates move up, credit card rates
follow.
The average credit card rate for standard, non-reward credit
cards jumped to 13.02% this week, while the rate for credit
cards offering rewards passed the 14 percent mark, to 14.09%.
The news is better for consumers with the very best credit --
for them, these averages are 10.28% and 11.61%, respectively.
As always, college students who carry balances are paying more.
The average APR for a student credit card moved to 15.59% this
week.
For the first time in five weeks, the average business credit
card rate also increased. However, the rise was slight, and
business card rates remained far below consumer rates. Standard
business credit cards offered an average APR of 11.37%, while
business reward credit cards offered an average rate of 13.22%.
"It's unclear whether the Fed hikes are over," says Adam Jusko,
Research Director for IndexCreditCards.com. "With Ben Bernanke
officially taking over for Alan Greenspan as Federal Reserve
chairman, predictions are varied as to his philosophy. However,
most experts think we'll see at least one more quarter-point
hike in March, so if you're carrying a variable-rate credit
card, now's the time to get it paid off."
Financial institutions represented in the survey include Advanta,
American Express, Bank of America, Capital One, Chase, Citi,
Discover, MBNA, National City, Providian, Pulaski Bank, U.S.
Bank, Wachovia, Wells Fargo and more.
Published 02/02/06 (Modified 05/07/12)
No Comments