A weekly rate report by credit card issuers shows that interest rates on new credit card offers have remained steady for a record fourth consecutive week.
The national average annual percentage rate (APR) has remained steady at 14.65% over the past four weeks, and has remained fairly static since the beginning of the year. However, the average rate is still higher than what it was six months ago when the national average APR was sitting at 14.35%.
The national average credit card APR is calculated by taking the average rates offered to new customers on over 100 of the most popular credit card in the United States. The range of cards used covers all of the leading card issuers and represents a variety of different card categories including cash back cards, student cards, business cards, airline cards, reward cards, balance transfer cards, and cards aimed at those with bad credit.
In addition to the national average, averages are also calculated for each of the categories individually. These averages have also remained static with the lowest average rate being 11.18% in the low interest category and the highest of 23.95% in the bad credit category. Introductory offer rates, also known as teaser rates, are not included when calculating the national average APR.
Although the national average remained the same, several credit card issuers including Citigroup, American Express and Pentagon Federal Credit Union (PenFed) did make some adjustments to their cards’ introductory offers and rates on purchases and/or balance transfers.
This continues a recent trend for longer introductory offer periods. For example, Citi extended their introductory 0% balance transfer offer to 21 months on their Platinum Select MasterCard, while PenFed offered a 4.99% rate for the life of balance transfers made before June 30, 2011 on their Promise and Visa Platinum Cashback Rewards cards.
Overall, it looks like credit card issuers are continuing with the trend of testing out credit card offers. Market research shows that term period extensions have been on a steady increase since mid 2010.
The squeeze on credit observed during mid 2009 is being reversed and many issuers are now offering durations of 15, 17, or 18 months or more. We have even seen offers with 24 and even 30 month long introductory rate durations in recent months,
said spokesman Andrew Davidson of market research firm Mintel Comperemedia.