AT&T, Chemical Cutting Interest Rates on Cards
NEW YORK - As rumblings of an impending credit card rate war begin to shake the industry, some issuers who offer consumers variable interest rates pegged to the prime will lower their rates next week.
AT&T Universal Card Services Corp. said Thursday that beginning July 1, cardholders who signed on before March 26, 1991 will pay an annual percentage rate of 17.4% on unpaid balances - one-half percentage point less than they pay now.
Cardholders who applied for the card after that date will also benefit from a one-half percentage point decrease; they will pay 18.4%.
The telecommunications company's move affects 10.5 million holders of its combination MasterCard or Visa card and telephone calling card.
Chemical Banking Corp., which began offering its cardholders a variable rate last month, will also decrease its rates by one-half percentage point on July 1.
Cardholders who hold a ChemPlus account at Chemical Bank, and gold card holders, will pay 16.0% on unpaid balances. Other cardholders, who were recently paying as much as 19.5% on their unpaid balances, will now pay 18.4%.
The average interest rate charged by major credit card issuers is 19.8%.