CBS Evening News

Credit Card Rates Remain High

By CBSNews.com staff CBSNews.com staff

November 26, 2001 / 1:18 PM EST / CBS

Alan Greenspan has lowered interest rates 10 times this year. Mortgage rates are at 30-year lows and auto companies are offering zero percent financing. But have you looked at the rates on your credit cards lately?

"They should be lower. They keep dropping it down. They should be really lower," said one woman.

The average interest rate on credit cards is still nearly 14-and-a-half percent.

Why so high? Check your small print. Many cards have floors — rates they won't go below.

Shop Around

Looking for a credit card with a low APR? Don't want an annual fee?

Click here to shop around and compare credit card company interest rates and fees from cardweb.com.

"Many cards have literally bottomed out. Some of the most widely held cards in the country stopped declining two or three rate cuts ago," said Robert McKinley of cardweb.com.

He says rates have dropped more than 2 percent so far this year.

"Actually credit card rates this year have come down to their lowest level in the entire history."

Credit Card Offers

As credit card companies intensify their marketing campaigns to boost profits, more and more glossy credit card offers are coming at us fast and furious — the average household receives eight credit card offers each month.

Click here for U.S. PIRG's tips on navigating credit card offers.

And those rate cuts have saved consumers about $11 billion in card payments. But, reports CBS News Correspondent Anthony Mason, lower interest rates have saved the card issuers an estimated $19 billion.

"The industry's profits are way up bcause their cost of money is way down," explained Ed Mierzwinski of U.S. Public Interest Research Group.

MBNA, the largest card issuer, saw profits soar 33 percent in the second quarter.

"It's disgraceful really, because Alan Greenspan wants the economy to get going. He wants to help consumers. The credit card companies are pocketing the money and getting rich," said Mierzwinski.

The Federal Reserve has made sure there's plenty of cheap money to be had in this struggling economy, but Greenspan can't help you with your credit card bill.

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