0% balance transfer offers are dwindling, and offer lengths are shrinking – The Balance
- August 7, 2020
- By: Greenpath Financial Wellness
Excerpt from The Balance looks at current trends in credit card interest rates.
Featuring Jeff Arevalo, GreenPath Financial Wellness Expert
The average credit card interest rate is 20.21%, according to data collected by The Balance in July 2020.
That’s down a hair from June’s average rate of 20.22%, but not because of any major card APR shifts. The Balance refined database calculations in July, and recorded just a few small card APR increases, but those offer changes were not significant enough to move the average rate needle drastically.
0% Balance Transfer APR Offers Are Shrinking
Introductory rate offers typically ebb and flow, but recent cutbacks have stood out. In March there were 95 cards in our database advertising promotional balance transfer rate offers for new cardholders, and today there are 78.
Fewer cards are offering balance transfer APR deals that last 15 months or longer these days, too. Most recently, Bank of America decreased the 0% balance transfer APR offer lengths on two of it’s cards—Bank of America Cash Rewards Credit Card and Bank of America Cash Rewards for Students—from 15 months to 12.
What Average Credit Card APRs Mean For You
We know there are many other things grabbing your attention these days, but credit card interest rates are still important numbers to watch, especially if you carry a balance on your card month-to-month. This is not a time to brush off numbers that can quickly add dollars to your credit card bill.
“COVID-19 is directly impacting consumers’ ability to pay even the most basic bills right now and credit card debt can’t be ignored,” said Jeff Arevalo, an expert with GreenPath Financial Wellness, a nonprofit credit counseling agency. “For people utilizing credit more and having problems making payments or meeting the minimum payments on credit cards, a high balance and accruing interest makes it more difficult to get out of debt.”
Right now, focus on managing the accounts and balances you may already have. Interest rates won’t likely go down anytime soon, and a generous 0% balance transfer deal may not be as easy to come by to help relieve interest cost burdens.
Here are three key takeways from the article:
- Store credit cards have the highest average interest rate.
- Business credit cards have the lowest average interest rate.
- Student credit cards have the lowest average interest rate among consumer cards.
Read the full article from The Balance.
Have Questions About Managing Your Credit Cards?
GreenPath’s NFCC-certified credit counselors can walk you through tips for using credit. They will also show you how to get a free review of your credit report. They’ll explain how to read the report and how credit scoring works, and answer your questions. Together let’s make a plan for managing your credit to support your goals.
Jeff Arevalo is a Financial Wellness Expert and has been with the Greenpath since 2006. He possesses a strong passion for helping others and takes great pride in providing strong financial education and effective money management tools to help make a difference in people’s lives. Jeff and his wife recently welcomed a baby boy to their family and are excited to navigate the world of parenthood for the first time.