Rate survey: Average card APR holds still at 16.41 percent

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Kelly Dilworth

Personal finance writer
Specializing in new trends in credit

The
national average credit card APR clocked in 16.41 percent Wednesday for the
seventh consecutive week, according to the CreditCards.com Weekly Credit Card
Rate Report.

CreditCards.com
reviewed the APRs, annual fees and promotional terms of 100 of the most popular
U.S. credit cards.

Most
issuers left interest rates alone this week.

Capital
One introduced some alternative offers on its line of credit cards for
consumers with average credit. However, not all who visited the
Capital One website were shown the same offer. Occasionally, issuers float test
offers on their websites or show varying terms to different visitors.

Issuers
have largely left credit card offers alone in recent weeks. However, rates are
expected to bump up again as soon as the Federal Reserve raises its benchmark interest rate
by another quarter of a percent. When the Federal Reserve increases interest
rates, most variable rate loans, including credit cards, eventually increase rates by the same amount.

The
average card APR is already at a record high. Another quarter-point increase in
the federal funds rate could put the average card APR within rounding distance
of 17 percent for the first time in more than a decade. When CreditCards.com
began tracking rates in mid-2007, the average card APR remained near 13 percent
before falling by more than a full percentage point the following year.

Today,
minimum card APRs below 12 percent are rare, even on cards advertised as low interest rate credit cards. Among the low interest cards included in the weekly
rate report, the average APR is 13.14 percent. Meanwhile, the average minimum
APR for rewards cards is 16.51 percent.

Affirm adds an in-store credit card
option

Consumers who
don’t mind sharing personal details about themselves that aren’t traditionally
included in a credit report will soon have more borrowing options to choose
from.

The
alternative lender Affirm – which uses nontraditional data to size up potential
borrowers – announced this week it is partnering
with Apple Pay on a virtual card consumers can use in brick-and-mortar stores.
However, unlike traditional credit cards, Affirm’s new card option won’t offer
a revolving line of credit. Instead, cardholders will be approved just before
checkout for a three- to 24-month installment loan that’s good for a single
purchase. 

Affirm
will also offer an in-store credit option at participating retailers for consumers
who don’t have Apple Pay.

Previously,
Affirm’s digital credit option was only available on websites that accepted it.
Many of the retailers partnering with Affirm are furniture stores and other
providers of big-ticket purchases that consumers often need to finance.

By adding
a digital card to its lineup, Affirm will be joining just a small handful of
card issuers that use nontraditional data to score borrowers who are new to
credit or are rebuilding their traditional scores.

Over the
past year, a growing number of lenders have started to offer in-store financing
options for consumers who are believed to be better credit risks than their
traditional credit scores indicate.

In the
fall of 2017, for example, the nontraditional lender Petal introduced a credit card that considers
alternative sources of information, such as bank statements and spending
histories, when evaluating potential borrowers.

Not long
after, the alternative lender Deserve said that it too would use
non-credit-related banking information and other personal details to score
borrowers who are interested in its new student credit card.



















CreditCards.com’s Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 16.41% 16.41%
16.15%
Low interest 13.14%
13.14% 12.89%
Cash back 16.67%
16.67%
16.40%
Balance transfer 15.63%
15.63%
15.38%
Business 13.93%
13.93%
13.68%
Student 15.92%
15.92%
15.70%
Airline 16.41%
16.41%
16.07%
Reward  16.51%
16.51%
16.24%
Instant approval 18.82%
18.82%
18.60%
Bad credit 23.62%
23.62%
23.46%
Methodology: The national average credit card APR is comprised of 100 of the most popular credit cards in the country, including cards from dozens of leading U.S. issuers and representing every card category listed above. (Introductory, or teaser, rates are not included in the calculation.)
Source: CreditCards.com
Updated: March 21, 2018


See related: Historic credit card rates chart, Infographic: Cards, debt, delinquencies all on the rise, Best credit cards for grocery shopping





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