Rate survey: Interest rates don't budge for 10th straight week
Interest rates on new credit card offers remained
unchanged for the 10th 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: Jan. 18, 2013
The national average annual percentage rate (APR
remained fixed at 14.96 percent Wednesday. None of the cards that
CreditCards.com tracks featured rate changes this week.
In today's credit card environment, that's nothing
new. Average rates have remained just below 15 percent since November 2012 and
have remained within rounding distance of 15 percent since October 2010.
In recent weeks, credit card issuers have been
especially inactive. The past 10 weeks marks the longest period that average
rates have remained the same since CreditCards.com began tracking rates in
Previously, the longest stretch of time issuers left
interest rates on new card offers alone was six weeks.
How it began
Credit card interest rates first began stabilizing in 2011 after bouncing
around more frequently the previous year. In 2010, issuers were just coming to
terms with new rules from the Credit CARD Act of 2009, which went into effect
in February 2010, and frequently tested new offers as they tried to make up for
the profit losses they sustained as a result of the sweeping legislation.
One of the most significant rules set by the CARD
Act for credit card APRs was limiting a card issuer's ability to revise terms
after a consumer received a new card. Specifically, the CARD Act sharply restricted issuers'
ability to change cardholders' interest rates at any time, requiring a 45-day notice before changing a credit card's APR.
During the months before CARD Act's effective date, issuers rapidly raised credit card interest rates on new card offers. Between Jan. 6, 2010, and Feb. 24, 2010,
average interest rates rose by nearly 2 percentage points, from 12.87 percent
to 14.62 percent.
Since then, average rates on new card offers have
increased only slightly, settling at about 15 percent by the end of 2010 and
staying near that mark since.
continue to fall
Credit card issuers show few signs of altering their course any time soon. However, they
are enjoying a period in which more cardholders are paying their bills on time,
which may give them more flexibility to make positive changes to card terms in
Six of the top credit card issuers in the United
States reported that late payments on credit cards fell in December. Analysts say that trend will likely reverse in 2013, if only because late
payments on credit cards are already so rare.
That said, the rise in delinquencies is unlikely to be steep, say analysts.
Late payments on credit cards are currently at
historic lows and analysts say delinquencies (late payments by 30 days or more)
may have already hit bottom or are close to it.
The number of late payments on bank cards, for
example, fell to an 18-year low in the third quarter of 2012, according to a
report by the American Bankers Association.
Though fewer of them are behind on their credit card bills, consumers are remaining careful and cultivating stronger credit scores while the economy remains weak, the ABA said
"Consumers are paying close attention to their
finances as they continue to pay down debt in an uncertain economy," said James
Chessen, chief economist at the American Bankers' Association in a statement
released with its report. "The conservative approach consumers have taken to
credit over the last several years has allowed them to better manage their debt
and better position themselves for the future."
"As long as job creation and GDP growth remain
relatively stable with no unexpected shocks, we continue to expect strong
credit quality, though delinquencies will likely increase into 2012," wrote
analysts at Credit Suisse, a financial services firm, in a research note
See related: Bankruptcies fell 14 percent in 2012, continuing two-year decline
Published: January 16, 2013