Rate survey: Credit card interest rates slip to 14.95 percent
Interest rates on new credit card offers fell Wednesday
for the first time in nearly a month, 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: Feb. 20, 2013
The national average annual percentage rate (APR) returned
to 14.95 percent this week after remaining at 14.96 percent for two consecutive
This week's dip in rates was minor. However, it's significant
in that it marks just the third time in 33 weeks that average rates have
Wells Fargo spurred this week's rate change by
lowering the APR on the Wells Fargo Cash Back College Visa Card. Previously,
the card featured an APR range of 12.15 percent to 21.99 percent. It now
features a slightly lower range of 11.15 percent to 21.15 percent.
Wells Fargo spokeswoman Natalie Brown confirmed this
week's rate change and said that the issuer was simply adjusting to market
continue to be frugal with credit
Fargo's Brown didn't elaborate on any particular market condition prompting the bank to cut the rate on its student card. However, card issuers are facing increasingly favorable conditions as they head into the
second quarter of 2013.
Credit card holders have been steadily paying down the
debt they owe for the past several years and even paid a record number of bills on
time in the third quarter of 2012, according to the American Bankers
Association's most recent Consumer Credit Delinquency Bulletin. Bank card
delinquencies -- meaning, the number of
late payments that consumers make by 30 days or more -- fell to their lowest levels since
1994, according to the bulletin, underscoring the fact that
consumers are still extra cautious with their cards.
Late payments on credit cards did increase slightly
in December, according to the consumer reporting company TransUnion's quarterly trends data, released Feb. 20.
However, experts say that card delinquencies were already so low by
the summer of 2012 that it was inevitable that they would rise again at some point.
Average credit card balances per borrower also rose slightly in
the fourth quarter of 2012, according to TransUnion, from $4,966 in the third
quarter of 2012 to $5,122 in the fourth quarter.
Though balances ticked up over the past three months, they're still lower than they were a year ago when they averaged $5,204, say
The lower balances may mean that holiday shoppers
were slightly more frugal this year with the amount of debt they put on their
cards. Research from the Federal Reserve also showed that consumer credit card
balances fell in the last month of the year.
December's drop in debt was unexpected since consumers
typically finance much of their holiday shopping with their cards.
"The fourth quarter traditionally results in higher
credit card balances and delinquencies, much of it to do with the holiday
shopping season," said Ezra Becker, vice president of research and
consulting at TransUnion in a statement. "Though serious delinquencies
have risen seven basis points in the last year, average credit card debt has
actually dropped, which is a sign that consumers continue to manage their
Compared to previous years, however, "both credit card
delinquencies and balances are below historic norms," Becker also noted.
Experts say that the historically low number of late
payments in recent months and the relatively modest credit card balances are signs that
more consumers have learned to use credit responsibly -- and are unlikely to make the
same mistakes they did before the recession any time soon.
"Consumers continue to value their credit card
relationships and are diligent about paying off their balances in a timely
fashion," said Becker in a statement. "This is a positive sign
as more and more subprime borrowers have either entered or re-entered the
credit card market."
See related: Fed: Banks remain reluctant to ease terms on new cards
Published: February 20, 2013