Rate survey: Credit card average APR holds steady at 14.98%
Interest rates on new credit card offers held steady
for the third straight 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: Sept. 12, 2012
The national average annual percentage rate (APR) on
new card offers stayed anchored at 14.98 percent Wednesday. This is the
eighth straight week that interest rates have remained just below 15 percent.
Among the 100 cards that CreditCards.com tracks,
only one card featured a rate change. The sporting goods store Cabela's lowered
the highest available rate on the Cabela's Club Visa card from 18.24 percent to
The rate change didn't affect the national average,
however, because CreditCards.com only considers a card's lowest possible
interest rate when calculating average rates.
Every other card in CreditCards.com's database
featured the same rates as last week. Other terms -- on promotional
balance transfers and introductory purchases -- also remained unchanged
cautious, consumers cut debt
Issuers have refrained from heavily experimenting with offer terms for most of
2012. In the past eight months, for example, the national average has moved
just 13 times. Promotional offers on balance transfers and introductory
purchase rates also have rarely changed.
Experts say that issuers are remaining cautious
about the credit they extend to new customers due to the slow pace of recovery from the recession.
The national unemployment rate has stubbornly
remained above 8 percent since 2009 and the number of new jobs created in the
past two quarters of 2012 has fallen far short of economists' expectations.
Credit card holders, in turn, appear to be
responding to the rocky economic environment by trimming their credit card
balances and shying away from charging significant amounts.
Since January, credit card debt has fallen five
months out of seven, according to research by the Federal Reserve. Total
consumer credit, meanwhile, tumbled in July, the first such decline in almost a year,
according to the Fed's monthly consumer credit report released Monday.
consumers miss loan payments
Consumers aren't just cutting back on debt, however. A record number also are steadily
rebuilding their credit histories and paying their bills on time, according to
Late payments on credit cards, for example, fell to
a record low in August, according to the Fitch 60-Day
Delinquency Index. According to a press release the ratings company issued Monday, the
percentage of credit card delinquencies
its lowest point since Fitch Ratings began tracking credit card payments in the
Credit card holders are also paying off their
balances more quickly, according to Fitch. The Fitch Monthly Payment Rate
Index, which tallies the rate at which cardholders pay down their credit card
balances, also rose to a record high in August.
In addition, significantly more consumers are paying
their home and automobile loans on time as well, according to multiple reports.
The number of late payments on automobile loans fell in the second quarter of 2012, reaching a record low, according to
an analysis report from credit reporting agency TransUnion. The steady reduction in late payments occurred
despite a significant rise in the amount of debt consumers are taking on to buy
new cars and an uptick in the number of loans given to borrowers with less-than-perfect credit, the agency noted in a press release.
Late payments on houses also dipped this summer,
according to the July Mortgage Monitor, released Monday by residential mortgage data company Lender Processing Services.
Not all consumers, however, are having an easier time paying their bills. Late payments on student loans
increased two quarters in a row in 2012, according to the New York Federal
Reserve's most recent report on household debt and credit. The total amount of debt that students are taking on has also increased sharply this year, according to Federal Reserve data.
See related: Libor, the federal funds rate and the US prime rate: A primer
Published: September 12, 2012