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Rate survey: Credit card interest rates stay fixed

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Interest rates on new credit card offers held steady for the third consecutive week, according to the CreditCards.com Weekly Credit Card Rate Report.

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.92%
14.92%
15.19%
Low interest 10.40%
10.40% 10.84%
Balance transfer 12.46%
12.46%
13.00%
Business 12.67%
12.67%
13.13%
Student
13.77%
13.77%
13.77%
Cash back  14.24%
14.24%
14.86%
Airline  14.63%
14.63%
14.54%
Reward 14.71%
14.71%
14.86%
Instant approval 15.49%
15.49%
15.49%
Bad credit 23.64%
23.64%
24.96%
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.)
Source: CreditCards.com
Updated: June 27, 2012

The national average annual percentage rate (APR) on new card offers remained fixed at 14.92 percent Wednesday.

This is the 16th time this year that credit card interest rates have stayed flat. Issuers also refrained from changing promotional balance transfer offers and promotional APRs.

As a result, credit card applicants are likely to see the same offer today that they would have seen a week ago -- or even several weeks ago. After a significant amount of activity early in the year, issuers have left promotional terms on new credit cards alone for much of the second quarter.

For example, since the beginning of April, only 11 of the 100 cards that CreditCards.com tracks have featured new promotional balance transfer offers or new short-term APRs.  

The promotional offer changes have cut both ways: Some cards now feature longer balance transfer and introductory periods, other offers have been tightened considerably, with significantly shorter interest-free periods.

New cardholders are also contending with bigger interest payments. Average APRs have remained near record-highs for most of the year, becoming the norm for 2012. As a result, new borrowers are paying significantly more to carry a balance than they did a year ago when average rates were lower.

For example, a cardholder who borrows $5,000 on a credit card today and pays $100 monthly at 14.92 percent interest will have to pay $2,867 in total interest to pay off the balance. That's $62 more than would have been required at this time last year, when average APRs clocked in at 14.75 percent. (Calculator: How long will it take to pay off your credit card balance?)

Bigger incomes for some
The good news is that some borrowers have slightly fatter wallets than they did last year, making it easier to pay their bills.

Personal income growth rose by 0.8 percent in the first quarter of 2012, according to the Bureau of Economic Analysis. That's twice the growth that workers saw during the period last year.

The growth in pay wasn't evenly distributed, however. Health care professionals, construction workers and people who work in the hospitality industry saw the biggest boosts in pay; people who work in real estate saw their earnings decline. Information workers and those who work in the utilities industry also experienced slower income growth in the first quarter of the year.

Meanwhile, consumers living in Northern states were more likely to get a raise this year than those living in the South. For example, workers in Montana, Washington, North Dakota, Nebraska, Indiana, Kentucky, New York, Massachusetts and Vermont saw the biggest growth in earning power early in the year. However, workers in Nevada, Arizona, New Mexico, Oklahoma, Arkansas, Louisiana, Alabama and West Virginia, sustained the lowest amount of growth. Workers in Kansas and Mississippi saw their incomes decline.

Consumers slightly more optimistic about the economy, pessimistic about incomes
Despite the uptick in income for some consumers, many still think they're unlikely to get a raise any time soon. Consumer confidence fell for the fourth consecutive month in June, according to the Conference Board's Consumer Confidence Index.

Consumers were slightly more upbeat about the overall strength of the economy. Their low expectations of pay raises could cause them to think twice about spending on new goods and services. 

"Income expectation, which had improved last month, declined in June," said the Conference Board's Lynn Franco in a statement. "If this trend continues, spending may be restrained in the short-term."   

See related: More issuers offer credit cards with no foreign transaction fee

Published: June 27, 2012


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Updated: 12-03-2016


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