Rate survey: Credit card interest rates hold steady at 15.01 percent for fourth straight week
|CreditCards.com's Weekly Rate Report|
|Avg. APR||Last week||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: May 29, 2014|
Interest rates on new credit card offers remained unchanged this week, according to the CreditCards.com Weekly Credit Card Rate Report.
The national average annual percentage rate (APR) remained at 15.01 percent Thursday for the fourth consecutive week.
None of the cards tracked by CreditCards.com advertised new interest rates. Most credit card issuers left promotional balance transfer offers and introductory APRs unchanged as well.
Bank of America reinstated the 0-percent balance transfer offer on the MLB BankAmericard Cash Rewards credit card after briefly eliminating it last week. Major League Baseball fans now have 12 months to take advantage of the interest-free offer. Cardholders also have up to a year to make interest-free purchases.
Credit card issuers frequently test new offers in this way. Issuers will often introduce new terms for a short period and then reinstate the card's original offer.
Consumer confidence advances in May
Consumers are feeling slightly better about their finances this month, thanks in part to stronger job growth.
The Conference Board reported Tuesday that consumer confidence ticked up in May after sagging the previous month.
Consumers reported feeling somewhat more confident about the current job market. Fewer respondents complained that jobs are hard to come by and slightly more said jobs are relatively "plentiful." In addition, a larger number of consumers expect businesses to increase their hiring in the months ahead.
However, the number of people who think the job market is going to contract, rather than expand, is still notably higher than the number of people who think the labor market is bound to improve. For example, just over 15 percent of consumers expect businesses to increase their hiring within the next six months. Slightly more than 18 percent think businesses are going to cut back.
Similarly, around 32 percent of consumers still think jobs are "hard to get," while just over 14 percent say there are ample jobs available for those in need.
The number of consumers who are dissatisfied with the current business environment is also higher than the number of consumers who think things are going relatively well. For example, just over 21 percent of consumers think businesses are dealing with relatively favorable conditions -- down from around 22 percent of consumers in April. Just over 24 percent think current business conditions are rotten.
Despite having a less favorable view of the U.S. economy, consumers are more optimistic than they were in April that conditions will improve over the next six months. More than 17 percent of consumers think the business environment will pick up by Thanksgiving. Only around 10 percent think conditions will get worse.
More consumers also expect to get a raise in the months ahead. But an increasing number of consumers are also expecting a pay cut, rather than a pay hike. For example, just over 14 percent are expecting a decline in income over the next six months -- up from nearly 13 percent in April. Just over 18 percent of consumers are expecting some kind of boost.
Consumers plan to increase spending in 2014
Despite subdued expectations for the U.S. economy, U.S. consumers are starting to ramp up their personal spending, according to new data from the market research firm Mintel Comperemedia.
Mintel estimates that consumers spent a record $10 trillion in 2013 and are likely to spend even more in the year ahead. Overall, Mintel projects consumers will increase their spending by 3.6 percent by the end of 2014. That's "more than three times the projected rate of inflation for the year," says Mintel.
In addition, Mintel says that consumers are likely to increase their spending significantly over the next year on nonessential items, such as new video game equipment or tickets to a big event.
Already, fewer consumers say they're saving their disposable income rather than spending it, according to Mintel. And a larger number have at least some cash on hand to spend on what they want, rather than what they need.
A substantially larger number of consumers also say that they're spending at least some of their extra money on a vacation. In addition, consumers are expected to spend more on leisure and entertainment.
"In 2014, it appears that America has finally stopped holding its collective breath, waiting for the other economic shoe to drop," said Mintel's Fiona O'Donnell in a press release. "After years of slow but steady growth, Americans have passed the tipping point of prolonged economic worry and have cautiously accepted that things are better. Confidence in personal finances has allowed consumers to think about the future and look forward rather than linger over the past."