Interest rates on new credit card offers dipped this week,
according to the CreditCards.com Weekly Credit Card Rate Report.
The national average (APR) on new card offers fell 0.01 percent to
14.91 percent Thursday.
The rate change was spurred by a new higher rate on the Texaco
Visa card and by the replacement in the CreditCards.com database of
the Bank of America Student Platinum Plus card with the
BankAmericard for Students.
The APR on the Texaco Visa rose from 23.99 percent to 26.99
percent this week. However, the card's impact on the national
average was blunted by a change to Bank of America's student credit
The bank discontinued its Student Platinum Plus card, confirmed
Bank of America spokeswoman Betty Riess. The card wasn't as popular
with students as other Bank of America cards, she said. "Even when
we had the student-branded card, the majority of students who
applied and qualified for a credit card selected a card other than
the Student Platinum Plus card," wrote Riess in an email.
The Student Platinum Plus card featured a flat APR of 14.24
percent and no promotional offers. Students searching for a basic
credit card on the Bank of America website can still select a
BankAmericard for Students, which has a significantly lower minimum
APR and offers a 0 percent APR on purchases and balance transfers
for 15 months.
CreditCards.com replaced the Student Platinum Plus card in the
database with the BankAmericard for Students, which features an APR
range of 10.99 percent to 19.99 percent. Because CreditCards.com
only factors in the lowest possible APR when calculating rates,
only the card's low-end APR affected the national average, helping
push the average down to 14.91 percent.
Due to the change, the average APR for student cards is the
lowest it has been for more than a year. Today, the average student
cardholder pays just 13.31 percent in interest when they carry a
balance each month. That's lower than the national average.
However, it's still significant.
For example, a student who borrows $1,000 on a credit card to
pay for books or entertainment, and pays $50 monthly at 13.31
percent interest, will pay $137 in interest to clear the balance.
But many students pay just the minimum payment. That same student,
paying a 3 percent minimum monthly payment would pay far more --
$311 -- to get to a zero balance on the card. (See Calculator: How
long will it take to pay off your credit card if you just pay the
That said, students aren't locked in to choosing a student card
-- if they have the credit history to qualify for another one.
"Students who qualify for credit can apply for the card that best
meets their needs," says Bank of America's Riess.
Many credit card issuers, including Bank of America, also offer
rewards student credit cards. However, as with other rewards credit
cards, the APRs tend to be higher.