Credit Card Interest Rates Trend Upward
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Credit
Card Interest Rates Trend Upward
Average
credit card rates continue to climb. A quarter-point increase
on many American Express cards had the biggest impact on this
week's averages. The increase from American Express was not
surprising, as a hike in federal lending rates last month had
already caused other financial institutions to raise rates.
"Top-level"
consumer credit cards averaged a 9.64% Annual Percentage Rate
(APR) in the latest survey, up from 9.51% last week. The lowest
rate found for consumer credit cards without an annual fee was
the Capital One Platinum MasterCard, offering a 5.9% APR. During
the last week, Capital One shuffled its card lineup, removing
the PrimeLock credit card from its offerings while reducing
the APR on its Platinum card.
"Top-level"
business credit cards averaged a 9.91% APR, up from 9.87%. The
lowest rate for business credit cards with no annual fee was
the Advanta Platinum BusinessCard, offering a 7.99% APR, as
well as a program with travel or cash back rewards.
IndexCreditCards.com uses "top-level" to describe Platinum or
similarly designated credit cards that generally offer the lowest
interest rates to eligible cardholders.
"These
averages are based on the best rates published by the issuing
credit card banks," cautions Adam Jusko, Research Director
for IndexCreditCards.com. "Consumers or businesses with excellent
credit should be able to find cards at these rates, but those
with shakier credit histories may not. If you don't have top
quality credit, add 2% to these averages as a rule of thumb
in determining your probable rate."
IndexCreditCards.com also surveys rates of reward credit cards
for consumers and businesses, as well as student credit cards.
The latest averages include:
- Reward
cards for consumers averaged a 10.77% APR, up from 10.75%.
The lowest APR in this group belonged to the MBNA Rewards
American Express Card at 7.9%.
- Rewards
cards for businesses had an average interest rate of 11.37%,
up from 11.31%. The Advanta Platinum BusinessCard referenced
above was the lowest rate offered at 7.99%.
- Student
credit card rates stayed steady, with an average 14.72% APR.
The Wachovia Student Visa offered the best APR at 9.9%. Student
credit cards generally offer higher interest rates than basic
consumer credit cards due to students' lack of credit history.
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, and Wells Fargo.
Published 10/12/05 (Modified 01/21/13)
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