Consumer Payment Card News

Credit Card APRs Surpass 30 Year Levels as Prime Rate Hits 5.50%

Credit card rates (nominal) among banks and credit unions issuing Visa and Mastercards nationally increased 35 basis points (bps) in the final three months of 2018, compared to the third quarter. Compared to one-year ago nominal or offered credit card annual percentage rates (APRs) have soared 157 bps.

Credit Card Rates Soar

Accessed interest rates on accounts with revolving balances rose 40 bps from the third quarter of 2018 and are now up 187 bps.

The U.S. prime rate, the basis for more than 90% of U.S. credit cards, has increased from 4.50% to 5.50% over the past year, or 100 bps, according to data gathered by CardData.

American credit card debt now tops $1 trillion with total consumer credit is hovering around $4 trillion.

Highest in 30+ Years

The current interest rate, both nominal and assessed, is now at 30 year highs, according to analysis by RAM Research.

Nominal credit card interest rates among the Top 6 Visa and Mastercard issuers rose in tandem with the prime rate (now 5.50%) or 105 bps YOY. Nominal rates are the rates offered on all accounts.

Current Credit Card Rates

According to data collected by the Federal Reserve, nominal credit card interest rates rose to 14.73% in 4Q/18, compared to 14.38% in 3Q/18, and 13.16% for 4Q/17. Accessed interest rates (accounts with revolving balances) increased from 14.99% one-year ago to 16.46% in the prior quarter, and 16.86% for 4Q/18.

According to CardData and RAM Research, the average lowest nominal rate credit card interest rate among the nation’s leading issuers remains at 9.24% plus prime or 14.74% in 4Q/18. The average highest nominal rate credit card interest rate, among the Top 6 remains at 20.49% plus prime or 25.99% in 4Q/18.

Big 6 U.S. Visa/Mastercard Issuer APRs

Chase nominal credit card interest rates vary from 6.74% to 25.99%. Chase’s most common nominal annual percentage for all credit card accounts is currently 11.74% to 20.49% plus 5.50% a 5.50% prime rate, based on creditworthiness. Latest Chase Data

Capital One offers three nominal U.S. credit card interest rates of 9.74%; 16.24%; and 19.74% plus a 5.50% prime rate. Capital One’s most common nominal annual percentage rates are currently 15.24%; 21.74%; and 25.24%. The higher interest rates offered reflect the sub-prime (FICO below 660) portion of Capital One’s which currently represents about a third of its total U.S. credit card portfolio. Latest Capital One Data.

Bank of America, the nation’s third largest bank credit card issuer, offers nominal interest rates ranging from 9.99% to 19.99% plus a 5.50% prime rate. Bank of America’s most common nominal annual percentage rates currently range from 15.49% to 25.49%, based on creditworthiness. Latest BofA Data

Citibank offers nominal interest rates ranging from 10.24% to 20.24%, plus a 5.50% prime rate. Citibank’s most common nominal annual percentage rates currently range from 15.74% to 25.74%. Latest Citibank Data

Wells Fargo offers nominal interest rates ranging from 9.24% to 21.74% plus a 5.50% prime rate. Wells Fargo’s most common nominal annual percentage rates currently range from 14.74% to 27.24%, based on creditworthiness. Latest Wells Fargo Data

U.S. Bank offers nominal interest rates ranging from 10.74% to 19.74% plus a 5.50% prime rate. U.S. Bank’s most common nominal annual percentage rates currently range from 16.24% to 25.74%. Latest U.S. Bank Data

Nominal U.S. Credit Card Interest Rates

2Q/17: 12.77%
3Q/17: 13.08%
4Q/17: 13.16%
1Q/18: 13.63%
2Q/18: 14.14%
3Q/18: 14.38%
4Q/18: 14.73%

Accessed U.S. Credit Card Interest Rates

2Q/17: 14.00%
3Q/17: 14.80%
4Q/17: 14.99%
1Q/18: 15.32%
2Q/18: 15.54%
3Q/18: 16.46%
4Q/18: 16.86%

U.S. Prime Rate

2Q/17: 4.25%
3Q/17: 4.25%
4Q/17: 4.50%
1Q/18: 4.75%
2Q/18: 5.00%
3Q/18: 5.00%
4Q/18: 5.50%

Complete Historical Credit Card Interest Rate Data

Source: Federal Reserve; Chase; Capital One; Bank of America; Citibank; Wells Fargo; U.S. Bank; Discover CardData; RAM Research