Credit Card Rates Stable, But Fed Rate Hike Soon to Kick In
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Credit Card Rates Stable, But Fed Rate Hike Soon to Kick In
After eight
weeks of increases, average credit card rates have now stayed
the same for two weeks in a row, according to the IndexCreditCards.com
weekly Credit Card Monitor. However, as predicted, the Federal
Reserve Board raised federal lending rates a quarter-point on
Tuesday, meaning credit card rates will soon follow.
"Next week's report will definitely show a rise in card rate
averages, as the Fed hike cycles through the issuing banks,"
says Justin McHenry, Research Director for IndexCreditCards.com.
"As always, variable-rate credit cards will raise their rates
to match the federal increase."
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.
Curent credit card averages include:
- "Top-level"
consumer credit cards averaged a 9.97% Annual Percentage Rate
(APR). (IndexCreditCards.com uses "top-level" to describe
Platinum or similarly designated credit cards that generally
offer the lowest interest rates to eligible cardholders.)
- Consumer
reward credit cards offered an average 11.27% APR for those
with good credit.
- Average
student credit card rates remained at 15.03%.
- Business
credit card rates held steady for the fourth straight week,
at an average 9.99% APR for top-level business cards and an
average 11.74% for business reward cards.
"Averages are based on the best rates published by credit card
issuers," says McHenry. "If your credit is not top-notch, expect
rates about 2% higher than those quoted here. If your credit
is poor, obviously your rates may be even higher." 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 12/15/05 (Modified 05/07/12)
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