Weekly Averages:

• Average consumer credit card rate, overall market: 13.86%
• Average credit card rate, non-reward consumer cards: 12.40%
• Average reward credit card rate: 14.48%
• Average student credit card rate: 14.22%
• Average business credit card rate (non-reward): 10.18%
• Average business reward credit card rate: 11.80%

Though many credit card companies are raising interest rates and changing rate formulas to protect profitability, the recent Federal Reserve rate cuts have still been strong enough to knock average rates down, at least a little. (Federal Reserve rate cuts affect the rates on variable-rate credit cards, which include about 70% of all cards issued.)

The average credit card rate across all consumer credit card types and credit histories is 13.86% this week, down slightly from 13.88% previously.

The average credit card rate for non-reward consumer credit cards actually increased slightly, to 12.40% from 12.37% previously, yet the average rate on credit cards with rewards fell, down to 14.48% from 14.53%. Having rates on non-reward cards rise while reward card rates fall is a rare occurrence. However, the cuts in reward card rates may be coinciding with decreased rewards from many cards. Cash-back cards in particular are becoming less generous.

The averages listed above attempt to take into account the multiple tiers that many credit card issuers offer, instead of accounting for only the lowest listed rates. However, IndexCreditCards.com also tracks the very lowest listed rates, those reserved for customers with the very best credit. This week those averages are 10.99% (previously 11.26%) for the market as a whole, with a 9.11% (previously 9.15%) average for non-reward cards and a 11.79% (previously 12.16%) average for consumer cards with rewards. This reflects a significant decrease in rates for those with the very best credit — these are the customers that credit card issuers currently crave the most, as the economy has caused more and more of the less credit-worthy consumers to default on their balances.

In the current market, it is surprising to see student credit card rates continue to drop. The average rates on student cards fell to 14.22% this week, a significant drop from 14.45% less than three weeks ago. While published rates do not necessarily reflect how many students are actually being accepted at these low rates, it is still surprising that the card companies have not re-worked rates to the upside.

Small business credit card rates dropped this week also, with the average rate for non-reward business credit cards falling to 10.18% from 10.43%, and the average rate for business credit cards with rewards declining slightly, to 11.80% (from 11.83%).

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

November 3, 2008 By Justin McHenry

In a down economy and an unsure holiday season, Office Depot hopes to sell more computers, printers, cameras and more by announcing today that holders of its Worklife Rewards Visa card who make purchases of over $499 with the card won’t have to make any payments until January of 2010. The offer began yesterday (November 2) and runs through December 24.

Those who sign up for the Worklife Rewards Visa (issued by Chase) for the first time will also get a $20 bonus credit after they use the card for the first time.

The Office Depot Worklife Rewards Visa offers a 5% rebate on purchases at Office Depot, and 1% cash back on all other purchases. You can compare it to other cards offering cash rebates in our cash back credit cards section.

October 28, 2008 By Justin McHenry

Continental Airlines announced today that fliers who use their Continental credit cards or debit cards to purchase tickets will get a break on the first-checked-bag charge of $15 that Continental recently implemented. Continental Presidential Plus cardholders will have the fee waived for their first two checked bags — a savings of $40 per trip.

The fee waiver also extends to those traveling with the cardholder, provided they are part of the same reservation and check in with the Continental credit card holder.

Continental said that over 1 million people hold a Continental credit or debit card. The airline added the $15 first-bag fee last month.

For more information on the Continental credit card and other travel-related credit cards, see our page on travel credit cards.

Using government debt data and census data, IndexCreditCards.com has determined that the average American adult is carrying $4,208 in revolving debt (mainly credit card debt) and the average American household is carrying $8,188 in such debt.

Data released earlier this month from the Federal Reserve Board estimates that revolving consumer debt in the United States totals $969 billion. Using census data from 2006 to the present, IndexCreditCards.com estimates the adult (18 and over) population of the U.S. at 230,286,530 and the total number of households at 118,344,141. Dividing the total revolving debt by the population/household figures gives the resulting debt averages.

(Federal Reserve surveys suggest that about 75% of households have at least one credit card, and 25% have none. If we count only those households that report actually having one or more credit cards, the average household credit card debt would be $10,917.)

Revolving debt is mainly debt from credit cards, although related revolving consumer debt such as home equity lines of credit are included as well.

A caveat: Not all revolving debt is long-term debt accruing interest — some of this debt is paid off each month. (Although pinpointing how much debt gets paid off every month is difficult, various surveys have reported that 40% to 55% of card holders say they pay off their full balances every month.)

October 17, 2008 By Justin McHenry

The Toyota credit card announced earlier this year is now available to interested cardholders. The Toyota Rewards Visa offers points good toward the purchase or lease of a Toyota vehicle, or toward Toyota parts, service and accessories.

The rewards point formula is as follows: Cardholders earn 5 points per dollar charged to the card on purchases at Toyota dealerships, and 1 point per dollar on all other purchases. You’ll also get a bonus of 2,500 points after you actually use the card for the first time.  Points convert to cash that can be used toward future Toyota purchases at a rate of 100 points equaling one dollar.

If you are interested, click for the Toyota Rewards Visa. Alternately compare the Toyota Visa to cards from other auto makers in our Automotive Credit Cards section.

October 9, 2008 By Justin McHenry

Virgin America, the U.S.-based airline partially owned by Richard Branson’s Virgin Group, is set to launch a Visa Signature credit card that will give cardholders the ability to earn the airline’s Elevate frequent flyer points for card purchases.

The Virgin America Visa will offer triple Elevate points on Virgin America purchases, and 1 point per dollar on all other purchases. Those who sign up by November 30 and use the card by January 31, 2009 will also get a bonus of a free one-way ticket on Virgin America.

Virgin America is a newer airline, launched in August of 2007 and based out of San Francisco. While it is partially owned by Branson’s Virgin Group, it is not connected with the larger Virgin Atlantic that calls London home.

September 29, 2008 by Justin McHenry

When JP Morgan Chase bought the assets of the failed bank Washington Mutual for $1.9 billion last week, it became the second biggest bank in the country behind Bank of America. It also became the largest credit card issuer in the United States, at least in terms of outstanding loan balances.

Washington Mutual purchased the credit card company Providian in 2005, and began marketing cards under the WaMu brand as well as being the issuer for credit card partners such as retailers, associations, sports teams, and more. With the WaMu acquisition, Chase not only increases its customer base, but it buys these contractual relationships with outside partners, a valuable asset in the competitive credit card market.

While the credit card market remains competitive, Chase’s acquisition of WaMu — coupled with today’s news that Citi will buy Wachovia — means the market has consolidated further, with even fewer players dominating the lion’s share of the market. This is probably not currently a concern to regulators who are preoccupied with stabilizing financial markets, but over time it could mean less choice for consumers as it becomes more difficult to gain credit and also avoid the higher interest and fees that most of the major issuers offer.

September 24, 2008 By Justin McHenry

The U.S. House of Representative yesterday overwhelmingly passed a bill dubbed the “Credit Cardholders Bill of Rights” by a vote of 312 to 112, but the chances of it passing in the Senate — especially with the massive loan bailout front and center — is much less likely.

The bill’s intent is to curb credit card company practices that are seen as unfair or deceptive, such as the ability to raise interest rates on existing credit card balances, or to raise rates on very short notice. While consumer groups welcome the bill’s passage, the card companies and the White House argue that it takes away the companies’ ability to price for risk and may have unintended consequences, such as further tightening already shaky credit markets.

In the end, whether the bill ultimately becomes law may not matter much. The Federal Reserve has already proposed a set of regulations similar to those in the bill, and it has the ability to enforce these regulations without Congressional approval. Some form of credit card reform is therefore likely early in 2009, although what its final makeup will be is still in doubt.

September 23, 2008 By Justin McHenry

Visa announced today that it has opened the doors for banks and other card issuers to offer Visa credit and debit cards without the raised embossing that most cardholders have come to expect. While on the surface the change seems slight, it is significant in that it gives banks the ability to issue cards immediately — customers who apply at a bank branch or other physical location can be approved and walk out with a card on the same visit.

Visa had run a series of pilot tests that it considered to be successful, including testing through Commerce Bancshares, Inc., TD Banknorth and United Heritage Credit Union.

The unembossed Visa cards will work at most merchants, although not at merchants that still use the older style of credit card machine that requires a physical imprint of the card’s information.

September 11, 2008 by Seth Harbison

MasterCard announced yesterday that most Rite Aid drug stores are now accepting its PayPass “Tap & Go” contactless credit & debit cards for payment. The technology, which allows consumers to pass their cards quickly in front of a special reader instead of swiping it through a machine, is designed to speed up the sales process.

Rite Aid has installed the readers at the front counter of 3,800 of its more than 5,000 stores across the country.

The PayPass-enabled MasterCards also allow consumers to pay without signing a credit slip for transactions under $25.