Interest rates in credit cards remain steady
According to the Weekly Credit Card Rate Reports, the interest rates on credit cards have remained steady this week. The APR or the annual percentage rate on the new credit cards have remained at 14.8% this week despite changes in card offers from Discover as well as sporting goods retailer, Cabela’s.
Both Discover and Cabela’s have changed the APR range of their top end cards. Only the APR ranges of the low end cards are used for calculation, hence, the national average APR has remained unaffected with these moves.
The range of the top end cards from Cabela’s has dropped from 18.25% to 18.20%, and the low end has been steadily holding at 9.99%. Kevin Werts, Cabela’s CFO has stated that the change was due to the movement in Libor which is British equivalent of the US Federal Funds Rate. Most of the variable rate credit cards in the US are tied to the US prime rate which moves depending on the changes in the Federal Reserve’s federal funds rate. Likewise, Cabela’s card is tied to Libor. Hence, when Libor moves up and down, the APRs of the credit cards which are tied to Libor also move in the same direction and by the same amount.
Even the range of the high end cards of Miles from Discover also dropped and has fallen from 16.99% to 15.99%. The low end has remained at 10.99%. Matthew Towson, spokesman from Discover refused to comment stating that Discover doesn’t believe in commenting on the pricing strategies due to competitive reasons.
With the nearing of the summer travel season, there might be an increase in the number of people seeking the airline rewards cards like the Miles card. The latest decrease in APR on the cards, in combination with the generally stable APRs in credit cards will bring about some cheer for those cardholders who will be traveling this summer season, on a budget. However, before applying for any of the airline or the reward cards, you must ensure that you do sufficient research and make comparisons to avail the best offers.
Most of the airline rewards credit cards could be divided into two major categories which is the airline-specific card which features both the airline’s name as well as the logo for MasterCard, Visa, American Express or Discover, as well as the generic airline miles cards which offers miles but is not tied to any particular airline.
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