In the latest data collected by independent analysts, banks and card issuers remained unsure on how to react to the pending credit industry regulations that will take effect next year. This week’s annual average percentage rate (APR) remained unchanged at 12.17 percent. However, analysts point out that card companies are still trying to experiment in light of new regulations.
This week’s APR is lower than the figures six months ago. In fact, half a year ago, the average APR in the U.S. was much nearer to the 13-percent mark at 12.93 percent. Over the next months, this went down gradually to its present level. Balance transfer fees also declined to 10.14 percent across the nation, down from 11.18 percent just six months ago.
Of the nine credit card categories examined by industry experts, business APR dropped significantly with this week’s level at 11.07 percent. Analysts say that the figure is a far cry from the 16.74 percent APR six months ago. Also, cash back rates also dropped almost two percent, with the weekly APR at 11.77 percent, down from 13.76 percent half a year ago.
However, instant approval APR went up to almost 13 percent at 12.99 percent, from a previous 11.29 percent a mere six months prior. Airline APRs also rose to an average of 13.48 percent, slightly more than the 13.25 percent just six months before. Experts also point out that card issuers have tightened their policies regarding bad credit accounts, with the national average APR for bad credit standing at 14.29 percent this week, up from 13.18 percent half a year ago.
Most card companies, on the other hand, slashed student APRs to an average of 14.45 percent from 15.94 percent not six months ago. Analysts say that the recent drop in interest rates for student cardholders is because of the banks’ attempts to encourage young American consumers to sign up for cards.
The uncertainty over how card companies and banks should react to the new credit card regulations is forcing many card issuers to resort to a variety of changes in the APR. Cardholders can also expect some of their perks to be scaled down or even removed completely as card companies try to stay afloat amidst the tougher regulations.
Federal Reserve officials have also said that there is no need to adjust their policies. Experts say that this is good news for consumers since card companies will not be forced to change their rates for the time being.