Interest rates charged on variable rate credit cards are set to climb another 16 basis points within the next 45 days after the Federal Reserve this week raised its target for the federal funds rate to 4.75%. The action prompted many banks to raise the prime rate to 7.75%, the highest since May 2001. The current average for variable rate cards is 15.81% while the average fixed rate is at 14.15%. More than 80% of credit cards have a variable rate structure, generally pegged to the prime rate. In March 2005, the average go-to variable interest rate was 13.08% versus 13.32% for fixed rate cards. (The averages do not include introductory or punitive interest rates.)
| CREDIT CARD INTEREST RATES |
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| Month | Prime | Fixed | Variable |
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| Mar 05 | 5.75% | 13.32% | 13.08% |
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| Apr 05 | 5.75% | 13.39% | 13.17% |
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| May 05 | 6.00% | 13.48% | 13.45% |
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| Jun 05 | 6.00% | 13.59% | 13.61% |
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| Jul 05 | 6.25% | 13.64% | 13.84% |
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| Aug 05 | 6.50% | 13.76% | 14.24% |
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| Sep 05 | 6.75% | 13.80% | 14.49% |
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| Oct 05 | 6.75% | 13.87% | 14.64% |
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| Nov 05 | 7.00% | 13.91% | 14.89% |
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| Dec 05 | 7.25% | 13.93% | 15.20% |
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| Jan 06 | 7.50% | 14.08% | 15.53% |
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| Feb 06 | 7.50% | 14.11% | 15.75% |
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| Mar 06 | 7.75% | 14.15% | 15.81% |
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| Source: CardData (www.carddata.com) |
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