Credit card interest rates start new year near record highs

New year, new credit card? With interest rates averaging near record highs at more than 15%, it’s going to cost you.

A report Wednesday from has rates averaging 15.14% after peaking at 15.22% in mid-December. And a survey from the card-tracker site shows late payment penalties are becoming more expensive.

Card holders with bad credit are shelling out an average 24.96% APR, while rates for reward, cash back, airline and student cards are on a six-month upward trend.


Many issuers may be boosting standard rates to try to compensate for the effects of a recent law that limited when penalty rates could be applied to late-paying consumers.

Many companies, including Wells Fargo, HSBC and U.S. Bank, have stopped enforcing the penalty rates. But the ones that still do — 69% of card companies in 2011 compared with 91% the year before — have raised their percentages, often on top of one-time late fees.

Those rates jumped to 28.6% last year from an average of 27.9%, based on’s review of 100 online credit card offers. Barclays, whose cards include LLBean Visa and Visa Black, has the highest penalty rate with 30.24%.

But at least it may all soon be easier to grasp. Last month, the Consumer Financial Protection Bureau showed off a proposed credit card agreement form that would allow potential card holders to better understand rate terms and compare options.


Many Americans confused by credit-card terms, consumer agency says