Credit Card Rates Up, Cash Back Cards Especially Hit
Rate hikes in line with the recent Federal Reserve rate increase are still making their way through the credit card industry, pushing average rates higher again this week, according to the weekly IndexCreditCards.com Credit Card Monitor. In addition, in a development sure to upset reward seekers, cash back credit cards are becoming more expensive for those who carry balances.
The average rate for non-reward consumer credit cards increased to 13.45% this week, up from 13.40% last week. For consumers with the highest credit scores, that average is 10.68%, up from 10.64% last week. Reward credit cards took a big jump for the second straight week, up to an average APR of 15.08% from 14.75% last week and 14.46% the week before. For consumers with excellent credit, the average reward card rate increased to 12.67%, from 12.23% last week. In the last two weeks, both Citi and Capital One have increased the rates on their cash back credit cards (the Dividend Platinum Select and the No Hassle Cash Rewards cards, respectively) by more than 4 percent. Student credit card rates hit the 16 percent mark this week, up from 15.94% last week. The average student rate is up exactly three-quarters of a point since starting the year at 15.25%. For business credit card holders, the news continues to be brighter. No changes in rates this week, with the average non-reward business card rate remaing at 11.33%, and the average reward business card rate at 13.44%%.
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.
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