Rate survey: Credit card interest rates don't budge
Interest rates on new credit card offers stayed put
this week, according to the CreditCards.com Weekly Credit Card Rate Report.
|CreditCards.com's Weekly Rate Report
||6 months ago
|Methodology: The national average credit card APR is comprised of 100 of the most popular credit cards in the country, including cards from dozens of leading U.S. issuers and representing every card category listed above. (Introductory, or teaser, rates are not included in the calculation.)
|Updated: June 13, 2012
The national average annual percentage rate ( APR) on
new card offers held steady at 14.92 percent Wednesday after dipping the
None of the cards that CreditCards.com tracks
featured offer changes this week. That's not unusual in the current card
climate. In the past two months, credit card offers, including promotional
balance transfers and purchase rates, have remained unchanged five weeks out of
In the past two months, just three issuers -- Barclays, U.S. Bank and Bank Of America -- changed promotions on the cards that
CreditCards.com tracks. Similarly, just three issuers -- Discover, Citi and PNC Bank -- altered rates.
The relative lack of movement is unusual, however, when you
compare it to previous years when issuers adjusted offers more often. In 2012, average
rates have remained unchanged 14 weeks out of 24 and promotional terms have
changed far less often as well. By contrast, during the same period in 2010, rates
stayed flat just twice, and issuers regularly experimented with new promotional
offers, according to CreditCards.com data.
offers from card issuers have also plummeted
aren't receiving as many card offers either, according to new research from Ipsos,
which tracks credit card mailings. Issuers
sent out far fewer offers in the first quarter of 2012 than they did in the
last quarter of 2011. Then in April, issuers sent out the least number of
mailings in two years, according to the Ipsos Mail Monitor.
Research from Mintel Comperemedia, which also tracks
credit card mailings, found a similar trend. "April marks a new low for the
credit card direct mail decline that began in December 2011," said Andrew
Davidson, senior vice president at Mintel Comperemedia, in a report released
Tuesday. "The last time volumes were lower was back in March 2010. At that time,
a comeback in direct mail was gathering steam following severe cutbacks during
the recession. That comeback turned into a two-year period of expansion that peaked
in June 2011, when 497 million offers were received by U.S. households."
Experts say that banks have been reluctant to send
out more offers until the economy shows stronger, more persuasive growth and
consumers show more interest in borrowing significant amounts. "It's all about the economy," says Roy
Persson, director of competitive tracking services at Ipsos. "It's all about
the fact that banks are skittish about lending and consumers are skittish about
Relatively new regulations, such as the Durbin
Amendment, which went into effect last fall and capped debit card transaction fees, have also taken a significant bite
out of lenders' pocketbooks -- and that, too, has played a role in banks'
unwillingness to aggressively spend money on mail promotions, says Persson.
In a report released to CreditCards.com, researchers
at Ipsos Mail Monitor say the combination of stricter regulations, a painfully slow
recovery and consumers' unwillingness to take on more debt has put
significant pressure on banks. "With the economy taking its time to get back to
full swing, and revenue lines being pinched by federal regulations, it's no
surprise issuers are rethinking the investment placed into direct mail," wrote
Ipsos researchers in the report. "Overall, industry volume
has receded by one-third compared to [the last quarter] of 2011, with major
issuers like Citi and Chase taking the biggest step backwards. Issuers like
Barclays, US Bank and PNC, on the other hand, have increased their mail volume,
capitalizing on the decreased presence from 'big' issuers."
That said, households with good but not great FICO
scores have seen a slight uptick in the number of credit card offers they
receive, according to research by Ipsos. However, many consumers have also seen
higher annual fees listed on some offers. (The good news is
the overall number of cards with annual fees has not yet increased, say researchers.)
Meanwhile, "balance transfer fees of less than 3
percent are becoming nearly impossible to find," wrote Ipsos researchers in the
report released to CreditCards.com. That can make transferring a balance on a lower-interest credit card particularly costly for
consumers, especially if a bank doesn't offer a cap on the amount that can be
See related: Fed survey: Recession shrank card debt, crushed household wealth
Published: June 13, 2012