Three Hikes Tue, Sep 21, 2004
By Jennifer Dewalt, CardTrak.com
The Fed increased short-term interest rates by 25 basis points which will push the prime rate to 4.75% this week, and raise variable credit cards accordingly. Due to the timing of the rate increase, all of the nation's top ten issuers will pass along the latest increase within the next 30 days on their variable rate cards. The rate increase also comes just before the start of a new quarter, affecting cards that are adjusted quarterly. Most issuers use the last business day of the month as the index date for setting rates. Providian uses the 22nd day of the month. This is the third rate increase since June 30th.
VARIABLE RATE INDEX DATES (Effective 10/1/04)
Top Ten Issuers Ranked by Outstandings
1. Citibank - Two days prior to the closing date of the billing cycle
2. MBNA - Last business day of the month.
3. Bank One - Two days prior to the closing date of the billing cycle
4. Bank of America - Last business day of the month
5. Chase - Last business day of the month
6. Discover - Last business day of the month
7. Capital One - March 25, June 25, Sept 25 and Dec 25: applies day after the closing date of the billing cycle
8. American Express - Higher of the 1st or the 20th of each month
9. Household Bank - Last business day of the month
10. Providian - 22nd day of each month
Source: CardWatch® (www.cardwatch.com)
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