The average rate on new credit card offers has climbed above 16%, according to an IndexCreditCards.com survey.
Issuers are boosting rates to cope with higher defaults (charge-off rates now exceed 10%) and new restrictions on raising rates that take effect in February.
Higher rates are putting a squeeze on many customers. The old advice, to simply “move your business elsewhere” if you don’t like how you’re being treated, still works if you have high (750+) credit scores. Otherwise, you face a rougher road.
“There is no guarantee that other companies want your business, and no guarantee they’ll offer you better rates even if they accept you,” said Adam Jusko, IndexCreditCards.com’s founder. “The best advice we can give is to have a few cards in your wallet, and patronize whoever treats you the best. If you’re currently relying on a single credit card, you may want to seek an additional card before you need it, so you don’t find yourself in a desperate situation in which you’ll take any offer you can get.”
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