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.
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