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Credit card interest rates remain locked at 15.06 percent

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CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.06%
15.06%
14.96%
Low interest 10.46%
10.46% 10.37%
Balance transfer 12.55%
12.55%
12.39%
Business 12.98%
12.98%
12.98%
Student
13.27%
13.27%
13.16%
Cash back  14.62%
14.62%
14.85%
Airline  14.51%
14.51%
14.63%
Reward 14.91% 14.91%
14.79%
Instant approval 28.00%
28.00%
28.00%
Bad credit 23.48%
23.48%
23.64%
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: Jan. 22, 2014

Average rates on new card offers remained unchanged this week, according to the CreditCards.com Weekly Credit Card Rate Report.

The national average annual percentage rate (APR) remained locked at 15.06 percent Wednesday for the 10th consecutive week.

None of the cards tracked by CreditCards.com advertised new terms this week. Promotional offers, including 0 percent balance transfers and introductory APRs, also remained unchanged. 

Credit card APRs are currently at their highest point since early 2012, and issuers show few signs of substantially lowering rates any time soon. In 2013, for example, the national average fell just five times in 12 months. In 2012, it fell just nine times.

The small number of declines underscores just how reluctant issuers have been in recent years to lower credit card APRs.

The national average has remained above 15 percent for the past 18 weeks.

Economists raise hopes for 2014
Despite higher rates on new card offers, consumers are still spending substantially more these days than they were a year ago. According to multiple reports, consumers boosted spending significantly in the final quarter of 2013, raising hopes that consumers' newfound willingness to spend will last well beyond the holidays. 

On Jan. 21, the International Monetary Fund announced that it had raised its expectations for the U.S. economy in 2014, thanks in part to an increased demand for goods and services.

Economists at the IMF also said Congress' recent budget negotiations helped brighten the 2014 forecast, since some of last year's spending cuts have been eliminated. Economists widely believe the mandatory cuts were a major drag on economic growth.

The IMF economists now say the U.S. is likely to grow by 2.8 percent in 2014. That's up significantly from 2013 when growth slowed to an estimated 1.9 percent. In 2012, the U.S. also grew by 2.8 percent.

The IMF expects the economy to do even better next year, according to the report, projecting the economy will grow by at least 3 percent in 2015.

Consumers rather save money, than spend it
The forecast for a strongly growing U.S. economy is based in large part on the belief that American consumers will continue to expand their spending, as they did during the 2013 holiday season. But a new poll from Harris Interactive indicates that a substantial number of consumers may be more likely to save their money over the next six months than spend it.

According to the Jan. 22 poll, 58 percent of respondents plan to save or invest a larger percentage of cash over the next six months -- up from 47 percent in September. Fifty-five percent also plan to eat out less, while 52 percent plan to spend less money on entertainment.

The silver lining for retailers is that at least 38 percent of respondents expect to have more money to spend on discretionary purchases -- up from 28 percent in September. Fewer people also said they were cutting back on small-dollar purchases, such as magazine subscriptions or bottled water, which could mean people aren't feeling quite as financially pinched as they have been in recent years.      

See related: Credit card late fees could rise in 2014, Card balances rise again

Published: January 22, 2014


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