Credit card interest rates remain stuck at 15.01 percent

By's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.01%
Low interest 10.33%
10.33% 10.46%
Balance transfer 12.66%
Business 12.98%
Cash back  14.84%
Airline  15.30%
Reward 14.97% 14.97%
Instant approval 28.00%
Bad credit 22.73%
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: March 12, 2014

Interest rates on new credit card offers remained unchanged this week, according to the Weekly Credit Card Rate Report.

The national average annual percentage rate (APR) remained stuck at 15.01 percent Wednesday for the fourth consecutive week.

All but one of the issuers tracked by left credit card terms alone this week.

TD Bank shortened the promotional offer on the TD Easy Rewards Visa card. Cardholders now have just 12 months to take advantage of interest-free balance transfer offers. Previously, TD Bank's balance transfer promotion lasted for 18 months.

Most of the balance transfer cards tracked by feature similar promotions. Among the 100 cards in the database, 24 cards offer a promotional balance transfer rate for exactly 12 months. Eleven cards feature a promotional balance transfer offer that lasts longer than a year.

Credit card issuers are more generous than they used to be with 0 percent balance transfer offers. Shortly after the 2008 credit crisis, credit card companies sharply reduced the number of 0 percent balance transfer offers they mailed to prospective customers.

Over the past several years, however, 0 percent balance transfer offers have become much more ubiquitous. A February 2014 analysis by the financial services firm Credit Suisse found the number of offers containing a 0 percent balance transfer promotion increased significantly in just the past year.

Consumers are also seeing more offers advertising a promotional purchase APR, according to Credit Suisse. The introductory offers are designed to attract more customers and encourage them to spend.

Despite the efforts of issuers, new research released this week suggests that encouraging cardholders to spend more than they already are continues to be an uphill battle.

Credit card spending growth slows
Credit card holders are still relatively cautious about the number of purchases they're willing charge to their cards -- and payments firm First Data Corporation suggests that situation is unlikely to change anytime soon.

According to First Data's February SpendTrend Report, credit card spending increased by just 4 percent in February -- down from 4.1 percent in January.

That's the smallest single increase in more than a year, according to SpendTrend data. The last time credit card spending increased by less than 4 percent was in September 2012.

Overall, credit card spending growth has slowed down substantially since 2013. According to an analysis of previous SpendTrend reports, card spending grew by an average of 7.6 percent per month in 2013.

In the first two months of 2014, by contrast, spending on credit cards increased by an average of just 4.05 percent.

Year-over-year, credit card spending growth is also down significantly. In February 2013, credit card spending increased by 7.9 percent, according to previous First Data reports. That's nearly twice the amount it grew by in February 2014.

Despite the slower rate of growth in the first two months of the year, analysts at First Data Corporation say that card spending overall is still relatively robust.

"Credit card spending growth continues to be strong as consumer confidence remains pinned near post-recession highs," said First Data's Krish Mantripragada in a press release. That has "fueled consumers' appetite for credit and should support more spending growth."

See related: Card debt falls in January

Published: March 12, 2014

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