For the first time in U.S. credit card history, interest rates charged by some major U.S. issuers have blasted through the 30% barrier. Due to the increase in the prime rate last month to 6.25%, Chase, Citibank, and Bank of America are now charging some cardholders this month an annual interest rate of 30.24%. With the likelihood that rates will rise further this week and beyond, it is possible that some mainstream customers will see credit card rates of 32% or more by the end of this year on cards issued by the nation's top issuers. Chase (#1), Citibank (#2), and Bank of America (#4) levy a punitive interest rate of prime + 23.99% to customers who make late-payments, exceed the credit line, or who are otherwise considered undesirable or risky. According to CardWeb.com's "August Credit Card Rates," as published since 1988 in Wall Street Journal, the other top ten issuers charge punitive interest rates ranging from 19.99% to 29.99%. MBNA, which recently experienced some backlash over its pricing policies, assesses the lowest punitive rate of 19.99%. The average punitive rate charged by the top ten issuers is now 27.48%. For consumers, the best advice is to avoid making a late payment, exceeding the credit limit or bouncing a payment to avoid the bite of a loan sharking interest rate.
HIGHEST RATES CHARGED BY TOP ISSUERS
RANK/ISSUER A.P.R.
1. JPM Chase 30.24%
2. Citibank 30.24%
3. MBNA 19.99%
4. Bank of America 30.24%
5. Discover 26.24%
6. Capital One 27.24%
7. American Express 28.24%
8. HSBC 28.49%
9. Providian 29.99%
10. Wells Fargo 23.90%
AVERAGE: 27.48%
Source: CardWeb.com
August Table of Credit Card Rates as
published 8-8-05 in The Wall Street Journal
For the first time in U.S. credit card history, interest rates charged by some major U.S. issuers have blasted through the 30% barrier. Due to the increase in the prime rate last month to 6.25%, Chase, Citibank, and Bank of America are now charging some cardholders this month an annual interest rate of 30.24%. With the likelihood that rates will rise further this week and beyond, it is possible that some mainstream customers will see credit card rates of 32% or more by the end of this year on cards issued by the nation's top issuers. Chase (#1), Citibank (#2), and Bank of America (#4) levy a punitive interest rate of prime + 23.99% to customers who make late-payments, exceed the credit line, or who are otherwise considered undesirable or risky. According to CardWeb.com's "August Credit Card Rates," as published since 1988 in Wall Street Journal, the other top ten issuers charge punitive interest rates ranging from 19.99% to 29.99%. MBNA, which recently experienced some backlash over its pricing policies, assesses the lowest punitive rate of 19.99%. The average punitive rate charged by the top ten issuers is now 27.48%. For consumers, the best advice is to avoid making a late payment, exceeding the credit limit or bouncing a payment to avoid the bite of a loan sharking interest rate.
