Friday, August 19, 2011 - 9:57 AM

Interest Rate Gap Between Rewards And Non-Rewards Cards Widens

According to recently released figures, the difference between the interest rates offered by rewards credit cards and non-rewards credit cards has increased over the course of last month as card issuers struggle to meet the costs of their rewards and incentives programs.

As of 31 July, the average interest rate for a consumer credit card was 16.5 percent. This figure has risen slightly from the mid-month average which was 16.43 percent. However, the average interest rate offered on rewards credit cards was much higher, with an average of 17.27 percent. This is a much larger increase, with the average rate having jumped from 17.09 percent mid-month.

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WhataBummer413 posts since
Oct 15, 2010
Rep Points: 1,577

1. Friday, August 19, 2011 - 11:08 AM

The article goes on to state:

Credit card offers often come with seemingly generous perks and incentives including free travel, hotel stays, cash back or other gifts and rewards. However, these ‘free’ gifts do actually come at a cost to consumers. This is becoming increasingly apparent as the difference in interest rates between rewards credit cards and non-rewards credit cards continues to wide.

There is only a "cost to consumers" if they carry a revolving balance. My hunch is that very few readers of this blog who have rewards credit cards carry a balance.

Stewie55 posts since
Jan 18, 2010
Rep Points: 308