Rate survey: Interest rates don't budge for 10th straight week

By Kelly Dilworth

Interest rates on new credit card offers remained unchanged for the 10th straight week, according to the CreditCards.com Weekly Credit Card Rate Report.

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 mid-2007.

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.

Delinquencies 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 the future.

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."   

See related: Bankruptcies fell 14 percent in 2012, continuing two-year decline

Published: January 16, 2013

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