The national average interest rate on new credit cards reached 14.78 percent. This record level interest rate is coincided by the national average credit card APR being at peak levels. The APR is comprised of about 100 of the most popular credit cards in the country, including cards from dozens of leading U.S. issuers. But these high APRs are not a new phenomenon for consumers. In fact, in the third quarter a survey shows that more executives actually increase their APRs then decrease them. However, Chase defied these increasing APRs by lowering the bottom end of the APR range on its Freedom card to 11.99%. Chase is not the only sign of there being hope for credit card consumers though. The Federal Reserve recently multiple senior loan officers for major banks. They found that more than 12 percent of lenders reported easing their credit card approval standards in the third quarter of 2010. This is a sign of what is to come for the credit card industry.
Even though credit rates are at record highs, borrowers will soon have an easier time getting a new credit card. But until these interest rates decrease they will continue to have a real impact on cardholder’s economic situations. Consumers can have as many credit cards as they want but with the interest rate increasing it will take them even longer to pay off the debt which will leave them in debt for years to come.
Source:
http://www.creditcards.com/credit-card-news/interest-rate-report-101110-1276.php
I believe that Chase's decrease in APR is indicative of its health and good standing within the industry. Given that the Fed expects JPMorgan Chase to "pass" its stress test (view my last blog post), the bank has the capacity to decrease interest rates with the hopes of attracting consumers. We should look to see if Wells Fargo is also lowering any of its fees. Banks that are able to lower their fees will be very competitive within the industry as consumers look to grab the sweetest deals.
ReplyDelete