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Wednesday, April 23rd 2014

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Credit card interest rates remain at 15.01 percent

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CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.01%
15.01%
14.99%
Low interest 10.33%
10.33% 10.46%
Balance transfer 12.66%
12.66%
12.41%
Business 12.98%
12.98%
12.98%
Student
13.27%
13.27%
13.27%
Cash back  14.84%
14.84%
14.51%
Airline  15.30%
15.30%
14.51%
Reward 14.97% 14.97%
14.82%
Instant approval 28.00%
28.00%
28.00%
Bad credit 22.73%
22.73%
23.48%
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: March 5, 2014

Average rates on new credit card offers remained at 15.01 Wednesday for the third consecutive week, according to the CreditCards.com Weekly Credit Card Rate Report.

Most card issuers left interest rates alone this week. The sporting goods store Cabela's readjusted the APR on the Cabela's Club Visa by 0.01 percent. However, the rate change was too small to affect the national average.

Frequent Cabela's shoppers who want to use the card for non-Cabela's store purchases may now qualify for an APR between 15.14 percent and 21.14 percent.

Cabela's revised the store card's APR after the one-month LIBOR rate decreased from 0.16 percent to 0.15 percent. Unlike most U.S. credit cards, which are tied to the U.S. prime rate, the Cabela's Club Visa is tied to the 30-day LIBOR rate. When the one-month LIBOR rate falls, the APR on the Cabela's Club Visa automatically declines as well.

Consumer credit risk falls
Card issuers are still stingy about the amount of credit they're willing to lend to consumers with less-than-perfect credit scores, according to research from the Federal Reserve. But experts say some lenders may start to ease up in the near future -- particularly since many lenders are writing off a lot less unpaid debt than they used to, making it easier to lend to riskier prospects.

According to research from credit reporting agency TransUnion, the average amount of risk that lenders have to deal with dropped to an almost nine-year low in December, thanks in part to more consumers paying their bills on time.

As a result, lenders are more willing to take bigger risks on cardholders who have made mistakes in the past, say experts.

"With credit risk at such low levels, there is a possibility that consumers in higher risk segments may see more credit offers, as some lenders decide they have the room in their profit models to take on greater risk," said TransUnion's Ezra Becker in a March 5 press release.

Whether lenders remain willing to extend credit to consumers with riskier credit scores depends on a healthy economy. There, the results remain mixed. By one measure -- consumer spending on nonessential goods -- the economy still lags. 

Consumers spend more on services, less on retail
Consumers did spend more in January. But they weren't spending that money at the mall, according to Commerce Department research.  Instead, consumers spent more money than usual heating their homes due to record-cold temperatures brought on by January's Polar Vortex.

The department's research, released March 3, shows spending on services, including utility services, jumped by 0.8 percent in January -- thanks in part to larger heating bills.

Consumers also spent substantially more on health care in January, according to the Commerce Department, which helped push overall spending up. The department estimates consumers spent an extra $29 billion on health care services in January after millions of Americans became insured under the Affordable Care Act.

Overall consumer spending picked up by 0.4 percent in the first month of 2014. The overall increase masked a decline in spending on nonessential purchases, such as retail.

Many consumers did get raises in January, which significantly increased their spending power. According to the Commerce Department, income rose by 0.3 percent in January, after falling by less than 0.1 percent the previous month.

January's increase in income is partially due to higher wages for federal workers, said the Commerce Department. Subsidies from the Affordable Care Act also helped boost the amount consumers had to spend. 

See related: Fed: Banks keep tight grip on card loans

Published: March 5, 2014


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Credit Card Rate Report

Updated: 04-23-2014

National Average 15.00%
Low Interest 10.37%
Balance Transfer 12.64%
Business 12.80%
Student 13.27%
Cash Back 14.84%
Reward 14.96%
Airline 15.30%
Bad Credit 22.73%
Instant Approval 28.00%

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