Credit Card Interest Hits All-Time Low : Survey: Average rates tumble as competition in the industry heats up. And they could fall even further.

Credit card interest rates hit an all-time low in early April, a new survey said Wednesday, and rates are expected to fall even further.

The monthly survey by Ram Research Corp. showed the average of credit card interest rates was 16.47% among the 533 banks, thrifts and credit unions that issue Visa, Mastercard, Discover and Optima credit cards.

That breaks the previous all-time low of 16.89% in 1978, said Robert McKinley, president of the credit card research firm based in Frederick, Md.

“The market is competitive as hell. I don’t know how else to put it,” said David Brancoli, spokesman at Visa USA Inc. in San Francisco.

Banks have been sharply cutting interest rates in the last year because of unprecedented competition from non-banking companies, such as American Telephone & Telegraph’s no-fee and low-rate Universal card.

In two years, the average card interest rate has fallen by 2 percentage points from 18.53%, according to Ram’s survey.

One company, First Consumer Bankcard of Richmond, Va., offers a 6.90% variable annual rate with a $29 annual fee, which Ram Research says is the lowest rate in the country.

In addition, banks have been sweetening their card offerings with extra incentives, such as buyer-protection plans and 24-hour service lines. Banks and non-banks offering these low-rate deals have experienced huge growth in their card portfolios: Wachovia Bank’s portfolio grew 33% last year, McKinley said. Bank of New York Corp.’s credit card portfolio grew 22% in the first quarter alone, the bank said.

Mastercard International, which has captured a large share of the new non-bank card business, said purchase and cash-advance volume grew 20% to $22.5 billion during the first quarter from the year-ago period.

Credit unions have influenced pricing in the market by offering low-rate deals, prompting consumers to drop more expensive cards with large banks such as Citibank, Ram Research said. Just last month, Citibank cut interest rates to 13.4% for new cardholders, which contributed to the overall decline in rates.