Credit card interest rates hold steady at 15.01 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: Feb. 26, 2014
Average rates on new credit card offers stayed put this
week, according to the CreditCards.com Weekly Credit Card Rate Report.
None of the cards tracked by CreditCards.com advertised new
interest rates. Also left unchanged were cards' promotional terms, including introductory APRs and
Average rates in two subcategories did change slightly this
week. However, that was due to a minor reshuffling of the CreditCards.com
database, rather than a rate change.
The national average has remained at or above 15 percent for
the past 23 consecutive weeks. That's the longest stretch of time average rates
have remained above 14.99 percent since CreditCards.com began tracking rates in
Issuers ramp up
Credit card issuers show few signs of substantially lowering
rates any time soon. Average APRs on new card offers have fallen just 13 times
in the past two years and, each time, the drop has been tiny. The last time
average rates fell below 14.9 percent was in February 2012.
Banks are sweetening promotional terms on new card offers,
however, as they try to win over more cardholders in 2014.
According to data from the market research firm Mintel
Comperemedia, card issuers sent out significantly more offers with 0 percent APRs in
January than they did during the same time last year. They also lengthened the average
amount of time consumers can take advantage of interest-free balance transfer offers after shortening them toward the end of 2013.
In a research note released Feb. 23, analysts at financial
services firm Credit Suisse said competition for new cardholders is heating up
and is likely to intensify as the year goes on. "We expect an increase in
industry competition in 2014," said Credit Suisse analysts Moshe Orenbuch,
James Ulan and Leslie Robertshaw in the note.
That could mean consumers will receive a lot more card
offers in 2014 than they did the year before. Issuers have already increased the
total amount of mail they send to consumers' homes by 15 percent, compared to
last year, according to Mintel Comperemedia data cited by Credit Suisse.
By the end of 2014, Credit Suisse analysts predict the total
number of card offers consumers receive over the course of the year to increase
by approximately 25 percent.
Issuers have already stepped up the competition for new
cardholders substantially in just the past month, according to Credit Suisse.
In January, for example, consumers received approximately
229 million card offers with a 0 percent balance transfer deal. That figure represents 82 percent of all card offers, and is up from 199
million offers the previous year. Issuers also sent approximately 249 million offers with
a 0 percent purchase APR in January -- up from 231 million such offers in 2013.
Despite this activity, the average length of 0 percent
balance transfer deals has declined, according to figures released by Credit Suisse, from 20 months in January 2013 to 17 months in January 2014.
See related: Fed: Card balances leap in December
Published: February 26, 2014