The new year has kicked off with near-record-high credit-card rates that experts say aren’t likely to diminish for a while despite mild signs of an economic recovery.
This week’s national average rate on new credit-card accounts is expected to remain steady for a second week at 15.14 percent, the second-highest in the past four years, according to , which tracks the rate weekly.
The record-high credit-card rate — 15.22 percent — came in mid-December.
“I guess the banks are just trying to make up for lost revenue from the other places they used to make money, such as fees and repricing rates on existing balances,” said Ben Woolsey, director of consumer education at .
The higher card rate is sizably more than the 12.3 percent average in 2009 when Congress began hammering away on card companies for heavy-handed practices, leading to legislative changes.
The Credit Card Accountability Responsibility and Disclosure (CARD) Act eventually restricted companies from hiking rates without warning, prevented certain fees and penalties, and corralled introductory rates that blindsided new account holders with rate hikes.
The restrictions cost issuers billions in revenues. The higher rates today might be to catch up, Woolsey said.
“It’s improving slowly, especially as banks become pretty profitable again and casting their nets wider,” he said.
The average rate on existing consumer credit cards is 12.36 percent, with an average card debt of slightly more than $7,100 per household.
David Migoya: 303-954-1506, dmigoya@denverpost.com,
