Interest rates on credit cards are falling as Americans keep deleveraging and banks tighten consumer credit standards.

A study by the American Bankers Association found that the average cost of credit for card users fell to 11.25% in the first quarter, down from 11.3% a quarter earlier. The association's Credit Card Market Monitor, released Thursday, also found that the cost of credit, measured as interest charged as a percent of outstanding balance, has fallen every quarter since peaking at 13.26% in early 2010.

Americans also reduced their credit card debt after the recession, while lenders have tightened up their credit policies. Total outstanding credit card credit, as a percentage of disposable income, has declined steadily since the recession, dropping to 5.4% at March 31. That measure stood at 7.9% at the end of 2008; its peak was 8.3% in the first quarter of 2003.

"A change in consumer behavior coupled with shifts in the risk profile of bank portfolios means that the effective cost of credit card credit for consumers is falling," Kenneth Clayton, executive director of the association's card policy council, said in a press release. "At the same time, access issues influenced by continued economic uncertainty and regulatory limits on the ability to manage risk remain."

The credit squeeze has been particularly harsh on Americans with lower credit scores. Total credit card credit lines were about $2.4 trillion at the end of last year, falling 6% from a year earlier and 27% from the end of 2008. Superprime credit lines have fallen just 17% since 2008, to roughly $1.6 trillion, while prime lines fell by 38% and subprime lines by 43% over that period. Superprime credit lines rose in 2010 and 2011, but fell last year. Prime and subprime lines have fallen consistently since 2009.

Credit card lending has declined more than other forms of credit since the recession. Credit card loans have fallen 32% since the third quarter of 2008, while mortgages have declined by 16%. Business and auto loans have recovered after a sharp decline in 2009 and 2010; each has increased 1% since the third quarter of 2008. Since early 2011, auto loans have increased 28.4% and business loans 14.5%, while credit card loans have contracted by 8.4% and mortgage loans by 7.2%, the association said.

While interest rates have fallen across the board in the last five years, credit card rates have not fallen as much as other types of debt. Since the end of 2008, the average interest rate on a mortgage has fallen 41%, to 3.5%, while the rate on an auto loan has decreased by 34%, to 4.7%. In comparison, credit card interest rates have fallen just 7% over that time, to 11.26%.

The association's credit card monitor uses public and proprietary data compiled by Argus Information and Advisory Services, with analysis provided by Keybridge Research.

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