What Is the Average Rate on a Bank Credit Card?

Credit cards have become an absolute necessity for most people despite the high rates charged on revolving loan balances.  Whether traveling anywhere in the world or just buying a cup of coffee at Starbucks, a credit card allows the purchaser a safe, convenient, and fast method of paying for a purchase.

The use of both checks and cash has declined greatly as banks have pushed credit cards into every income and credit group.  When was the last time you saw someone paying by check or cash at a retail store?

Customers aren’t the only ones who love credit cards.  Banks love the credit card business since it is the only significant loan sector on which they can charge high rates.   According to creditcards.com the average rate on a credit card is about 15%.

As banks follow the money, many customers who were previously unable to qualify for credit cards are now being chased by banks as they feel more secure in lowering credit standards.  Default rates on credit cards are currently at all time lows despite the fact that most credit cards are approved without verifying income.  Applying for a credit card is fast and easy and absolves customers of the hassles of turning in reams of documents to prove their income.

Have the banks’ efforts to put more credit cards in the hand of consumers resulted in a surge of credit card debt?  Interestingly enough, consumers have shown great restraint in the use of credit card debt.  The lesson burned into the minds of many people from the financial crash is that debt is a trap when overdone.  The amount of credit card debt held by banks and the amount of unused credit lines has remained relatively flat since March 2012.

During the financial meltdown many consumers found themselves trapped in mortgage and credit card debt levels that could not be repaid.   As a result personal bankruptcies soared as consumers sought to have their debts expunged in bankruptcy court.  Both consumers and banks learned a costly lesson about easy debt during the financial crisis and so far both parties have shown remarkable restraint from falling into the same trap again.