Credit Card Interest Rates Hit New Highs

Consumers are paying more in credit card interest than ever before

Shaun Plum
MoneyTips Contributor

Borrowing Credit Cards

Credit Card Interest Rates Hit New Highs
September 26, 2016

The amount of debt consumers have has continued to increase over the last few years as the auto loan industry and student loan debts hit new highs. Credit card debt also continues to grow, especially with annual percentages rates (APR) also hitting all-time highs.

Today the average consumer pays an APR of 15.22%. The credit card industry has not seen APRs this high since December 2011. However, interest rates dropped in January 2012, a trend that is normal due to many shoppers making purchases around the holiday season.

This year, however, shows a different trend. The average APR has been over 15% since the start of the year. The balances consumers are carrying on their cards has also increased. In June, balances increased by 11.5%, while July saw a more modest rise of 3.4%.

Credit card debt now stands at $969 billion, a number not seen since 2008. Consumers began purchasing less on credit following the recession that began that year. However, credit card use has been steadily rising since then.

Most of this card use comes from new accounts. It's estimated that upwards of ten million credit card users recently opened their first credit card account. Many of these individuals (52%) are under the age of 30.

Despite this, the delinquency rate has not shown a major increase. In quarter 2 of 2016, it remained at a fairly low 1.29%.

If you want more credit, check out MoneyTips' list of credit card offers.

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Ronert | 09.27.16 @ 09:10
The economy needs resolve.
$commenter.renderDisplayableName() | 11.25.20 @ 02:05