NEW YORK - Reductions in the prime rate by the Federal Reserve are starting to show up in more attractive terms on credit cards. During October, the average Single/Go-to APR based on credit card solicitations was 12.51%, down from 12.94% in third quarter, according to data from Mail Monitor, a direct mail tracking service and a unit of market research company Synovate. The Single/Go-to APR is the rate that a card jumps to following its introductory or promotional rate period. “The 50 basis point reduction of the Prime Rate in September had an immediate impact on credit card offers,” said Andrew DavidsonVP-competitive tracking services for Synovate’s Financial Services Group. “Issuers began to promote lower rates but fixed them in anticipation of further cuts to the Prime Rate.”
Processing Content
Thirty-nine percent of offers received by US households in October promoted fixed Single/Go-to APR’s compared to just 29% during the third quarter. The average Single/Go-to APR for fixed rate offers dropped to 10.55% from 11.03% over the same time period.
Issuers increasing the volume of lower fixed-rate deals include Chase, BofA and Discover.
Discover introduced an 8.99% fixed rate offer in October while Chase and Bank of America mailings continued to promote fixed rates as low as 7.99%. The lowest fixed rate offers captured by Mail Monitor in October were from First National Bank of Omaha (5.99%) and RBS Citizens Bank (6.99%). (c) 2007 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com
