Lower-rate credit cards have become scarcer for Californians than a year ago, a consumer group has found.
In a survey to be released today, Consumer Action in San Francisco found that only 16 cards with annual percentage rates of 16% or less were made available to Californians by out-of-state financial institutions. That was down from 27 cards a year earlier.
Among California-based institutions, only four cards were available with rates of 16% or less, compared to nine a year earlier, the survey found.
It also found that the average interest rate on credit cards offered by California institutions was 17.97%, up slightly from a year earlier. The average annual fee was $15.16, down slightly.
The group cited three major reasons for the reduced availability of lower-rate cards. First, some institutions raised rates. Second, some lower-rate out-of-state cards were no longer available to Californians. Third, some credit card portfolios were sold to other institutions.
Consumer Action surveyed California institutions on Sept. 4. The group surveyed 18 out-of-state institutions that make cards available to Californians on Oct. 5.
Consumer Action said it did not survey all financial institutions, adding that it is possible, but unlikely, that other lower-cost cards are offered.
Among California institutions that raised rates, the largest increase was by American Savings Bank, the once-troubled institution based in Stockton that was taken over last December by investor Robert M. Bass. Last year, American's rate was 15%. As of September of this year, it was 18.9%, up about 26%.
Dianne Nelson, an American Savings spokeswoman, said the large percentage increase is misleading because American in the past was very aggressive in marketing credit card accounts. It offered an unusually low rate before, she said, and now offers a rate similar to those of its competitors.