For the first time in the industry’s history, average credit card rates have plummeted below the 15.00% level. However average rates could have been hovering below 14.00% if the full impact of the Fed rate deductions had been passed on to cardholders. Today’s surprise rate cut may drive rates a little lower but floor rates and fixed rates will prevent more than half of the cardholders in the U.S. from benefiting from the rate cut. The 6.00% prime rate, that takes effect today, is the lowest since variable credit card rates emerged on the scene in 1991. Since January 1st of this year, the prime rate has dropped from 9.50% to 6.00% while average credit card rates have fallen from 16.57% to 14.98%.
Average Credit Card Interest Rates December 2000: 16.57% January 2001: 16.49% February 2001: 16.31% March 2001: 16.16% April 2001: 15.91% May 2001: 15.83% June 2001: 15.43% July 2001: 15.02% August 2001: 14.98% Source: CardData.com