With Thirteenth Straight Federal Increase, Credit Card Rates Rise Again
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With Thirteenth Straight Federal Increase, Credit Card Rates
December 13th, the Federal Reserve Board hiked bank lending
rates for the 13th straight time, meaning bad luck for credit
card holders who carry a balance. This week, average credit
card rates rose above 10% for even the most credit-worthy customers,
while the overall rate average rose to over 12.5%, according
to the IndexCreditCards.com Credit Card Monitor.
Federal lending rates directly impact the rates on variable-rate
credit cards, and, over the long term, generally affect the
fixed rates that card issuers can offer. Federal lending rates
have risen 3.25% since June of 2004 and are at their highest
point since May of 2001. Among the card issuers applying quarter-point
increases on variable-rate cards this week: American Express,
Citibank, National City, U.S. Bank.
The average credit card rate for standard, non-reward credit
cards is currently 12.58%. The average rate for consumer credit
cards with rewards is 13.64%. For consumers with excellent credit,
these averages are 10.07% and 11.38%, respectively. In the last
two months, average rates have risen over a quarter-point (.37%)
on standard credit cards and over a half-point (.54%) on reward
(Starting this week, IndexCreditCards.com has added the “standard”
averages quoted above to the Credit Card Monitor. Previously,
only “top level,” or platinum-type cards were used, with the
lowest published rates used in calculating averages. This additional
statistic should provide a clearer picture of what the “typical”
consumer is paying in today’s market.)
“Even customers with the best credit are paying over 10% on
average,” says Justin McHenry, Research Director for IndexCreditCards.com.
“There are still good credit card deals out there, but it takes
more digging to find them than in recent years.”
Other credit card averages:
average student credit card rate rose to 15.13%, up from 15.03%
credit card rates rose to an average 10.58% for standard cards
and 12.81% for business reward credit cards.
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.
Disclaimer:The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we cannot guarantee the accuracy of the information in this article. Reasonable efforts are made to maintain accurate information. See the online credit card application for full terms and conditions on offers and rewards. Please verify all terms and conditions of any credit card prior to applying.
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