Credit card interest rates frozen at 15.06 percent
|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: Jan. 15, 2014
Average rates on new credit card offers remained stuck at
15.06 percent Wednesday, according to the CreditCards.com Weekly Credit Card
This is the ninth straight week the national average annual
percentage rate (APR) has remained at 15.06 percent.
None of the cards tracked by CreditCards.com advertised new
interest rates. However, some issuers tinkered with terms.
For example, Chase sweetened a promotional offer on one of
its business credit cards. Applicants who qualify for the Ink Cash card now
have 12 months to take advantage of interest-free purchases and balance
transfers. Previously it was 6 months.
Meanwhile, Navy Federal Credit Union reintroduced an
introductory balance transfer promotion to its stable of credit cards,
including the Cash Rewards Visa and the Platinum MasterCard. Qualified
applicants are now offered a 2.99 percent APR on balance transfers for up to 12
Credit card use
Over the past several years, many credit card holders have
hesitated to use credit as often as issuers would like. However, multiple reports
released earlier this month suggest a substantial number of cardholders are
finally starting to warm up to using their cards.
According to the Federal Reserve's December consumer credit report, for example, revolving debt -- which is mostly credit card
debt -- inched up in November 2013 for the second straight increase after tumbling four
months in a row earlier last year.
New research from First Data Corporation also shows
that credit card usage picked up substantially in December. "Spending growth on credit
cards hit a four-month high in December as consumers increasingly turned to
credit to fund discretionary holiday purchases," said First Data's Krish
Mantripragada in a statement released with the data Jan. 13.
According to First Data's SpendTrend report, credit card spending rose by 7.8 percent in December -- a big increase
from November's 4.9 percent rise.
Spending growth on debit, by contrast, slowed in December
for the second straight month. In December, consumers spent 8.3 percent more on
signature and PIN debit combined than they did the previous month -- down from 9.2 percent in November.
Looking at all types of payment card together -- including credit, debit and prepaid cards -- spending rose significantly in December as
more people flooded stores in search of last-minute gifts. "Spending
growth was strong in December as shoppers were more confident and enjoyed
stronger income growth compared to 2012," said First Data's Mantripragada.
Overall spending rose 6.1 percent
in December, according to First Data, while retail spending increased by 3.1 percent.
Delinquencies on the
As people warm to using their cards, delinquncies are also starting to tick up, according to new
research from the American Bankers Association.
According to the banking group's latest Consumer Credit
Delinquency Bulletin, credit card late payments by 30
days or more rose slightly in the third quarter of 2013 to 2.55 percent of
Despite the slight increase recorded during the fall of
2013, late payments are still exceptionally low compared to previous years.
With nowhere to go but up, some experts expect that delinquencies will become increasingly common in
months ahead -- though it's nowhere near unanimous.
According to a FICO
survey of bank risk professionals in the U.S. and Canada, 28 percent
expect that credit card delinquencies in increase in the next six months -- barely ahead of the 24 percent who expect to see a drop.
Far more bank risk professionals -- 58 percent --
expect credit card balances to swell, and 44 percent predict
lenders will approve more credit in the months ahead.
See related: Infographic: Credit card delinquencies up after three-year slide, Credit card late fees could rise in 2014
Published: January 15, 2014