Credit Card Interest Rates on the Rise

Credit Card Interest Rates on the Rise

Credit Cards
Image: File
Credit Cards
Image: Thinkstock

Credit card comparison website CardHub recently released its Credit Card Landscape Report for the second quarter of 2014.

This report analyzes the latest developments when it comes to interest rates, rewards, and fees within the credit card market.

Here are some of the survey results:

  • Generally, interest rates rose an average of 1.18% across all credit scores and user segments compared with the same quarter in 2013.
  • The most significant increase in interest rates can be seen when it comes to secured credit cards, which have risen by 2.77% compared with the previous quarter and 3.49% compared with the previous year. CardHub asserts that banks are likely taking advantage of the fact that consumers with poor credit are satisfied with just getting approved for a credit card. This group of card holders is less likely to carefully compare options.
  • There has been less interest rate increase when it comes to miles and points rewards cards. They have shown a 0.88% increase in ongoing rewards and a 5.32% increase in initial bonus rewards compared with the first quarter of this year. Ongoing rewards for cash back have remained mostly the same and the initial bonus was reduced by 0.69%. CardHub says this might be due to the fact that issuers want to leverage as many rewards limitations as they can.
  • Complaints about rewards and fees rose in the second quarter, with 45.02% and 23.08% increases, respectively.