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Credit Card Applications » News » Other » Consecutive increases in credit card interest rates

Consecutive increases in credit card interest rates

October 25, 2010
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For the second week in a row, credit card interest rates saw a hike although it is a marginal increase this time around. The national average for annual percentage rate has seen an increase following the APR changes made by Discover. The new credit card interest rates are sitting at 14.35 percent on an average according to reports, which is a slight increase from last week which saw a major jump in the interest rates. The lower spectrum of the APR has been raised by Discover on the More card which saw a hike from 11.99 to 12.99 percent. The top end is sitting pretty stable though at 19.99 percent. Although it was the only interest rate change that was seen in the entire week, it was more than sufficient to push the national average a bit higher. This is the first time since late June that back to back interest rate hikes have been witnessed.

It is not for the first time that credit card issuers have tweaked the terms and conditions including fees, APRs, introductory rates etc. for some reason or the other. Although there haven't been a lot of changes, the overall pattern that has emerged as far as rate hikes is concerned has been upward. Currently a typical card holder with a debt of 5000 dollars paying 150 dollars per month would need to pay 183 dollars more to pay off the debt that he would have needed to on January 1st 2010. The national average at that point of time almost 9 months ago, was 12.97 percent.

As unemployment rates seem to be high and there aren't many signs of their abating, these numbers are not likely to be received warmly by the American consumers. The number of jobs in the private sector according to some reports has decreased by a whopping 40,000 in the last one month. This is likely to trigger measures such as purchase of Treasury Bonds by the Federal Reserve to boost the economy following a barrage of bad news from economic data point of view. Further action will be taken according to the president of the New York Fed, unless there are signs of the outlook of the overall economy changing including reduction of unemployment rates. However, a change in the credit card rates is not necessarily due to the fed's measures. The overall rates though are indirectly controlled by the Fed.

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