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Consumer Credit Card Rates Jump to Highest Level of 2009

by Peter Andrew

Weekly Averages:

  • Average consumer credit card rate, overall market: 14.17%
  • Average credit card rate, non-reward consumer cards: 12.80%
  • Average reward credit card rate: 14.76%
  • Average student credit card rate: 14.15%
  • Average business credit card rate (non-reward): 11.77%
  • Average business reward credit card rate: 12.84%
Interest rates on consumer credit cards jumped significantly this week, with Bank of America raising rates on some of its main offers, as well as a few hikes by other issuers. The average rate for credit cards across all consumer sectors jumped to 14.17%, the highest rate thus far in 2009, and up from 13.89% three weeks ago.

(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 12.80%, up from 12.47% previously, while the average rate on credit cards with rewards jumped to 14.76%, up from 14.50%.

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 were also up, to 11.21% for the market as a whole (previously 10.84%), with a 9.77% average for non-reward cards (previously 9.29%) and a 11.83% average for consumer cards with rewards (previously 11.50%).

Bucking the trend, curiously enough, were student credit cards, whose average rate fell to 14.15% from the previous average of 14.26%. Are students really getting these lower rates, or are card companies using them as teasers before offering higher rate cards? It's hard to say, but published offers do suggest that student rates have become virtually equal to those of the consumer market in general. If this is indeed true, it would be unprecedented, as student rates are generally much higher than those offered to older adult consumers.

Business credit card rates, which have been on the rise recently, have stalled, with no changes since last month. The average rate for non-reward business credit cards remain at 11.77%, while the average rate for business credit cards with rewards remains at 12.84%.

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

Published 04/06/09 (Modified 04/20/12)


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