Rate survey: Credit card interest rates remain stuck at 15.01 percent for 5th week
By Kelly Dilworth | Published: June 4, 2014
|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: June 4, 2014|
Interest rates on new card offers remained at 15.01 percent Wednesday for the fifth straight week, according to the CreditCards.com Weekly Credit Card Rate Report.
This is the 37th consecutive week that average rates have remained above 15 percent. They began the year at 15.06 percent and then dropped to 15 percent in the final week of January. Since then, they've mostly hovered between 15 percent and 15.01 percent for nearly all of 2014.
Issuers have been reluctant to change rates for most of this year. The national average, for example, has changed just five times since Jan. 1. Issuers usually change promotional terms more frequently. However, most issuers left introductory APRs alone this week.
Bank of America reintroduced a test offer on the MLB BankAmericard. The bank is varying its pitches to Major League Baseball fans: Some do, some don't get offered an interest-free balance transfer.
Consumer spending dips in April
Consumers spent considerably less in April than they did the previous month, according to new research from the Commerce Department.
Revised figures also show that consumer spending was stronger in March than it's been in years -- indicating to analysts that consumers' appetite for spending is still strong.
According to the Commerce Department, consumer spending fell by 0.1 percent in April, due in part to reduced spending on durable goods and services.
This is the first time since April 2013 that consumer spending has faltered. However, this year's April slump may be only temporary.
The same report also showed that consumers spent more in March than they have since before 2010. In addition, a large chunk of that spending was on durable goods -- long-lasting items such as washing machines and cars. That means fewer consumers needed to buy a durable good in April.
According to revised figures from the Commerce Department, consumer spending rose by a full percentage point in March after increasing by a healthy 0.6 percent the previous month. Consumers spent substantially more on durable goods and they also upped their spending on nondurable goods, such as food and clothing, and on services, such as utilities.
Income ticks up
Despite spending somewhat less money on goods and services in April, many consumers got a substantial raise that month, which could bode well for future spending.
According to the Commerce Department, incomes rose by 0.3 percent in April after increasing by 0.5 percent in March.
April marks the fourth month in a row that incomes have picked up, according to historical data supplied by the department.
Although consumers had more money to spend on nonessential purchases, more consumers chose to save their money rather than spend it. According to the Commerce Department, the personal savings rate ticked up to 4 percent in April after falling to its lowest point in more than a year in March.
Daily spending spikes in May
Consumers' newfound inclination to save may not last through the summer, however. According to a second report from Gallup, consumers increased their discretionary spending considerably in May, spending an average of $98 per day on mostly nonessential purchases, such as dining out, entertainment and gas. (Buying a new home or car doesn't count in the daily average.)
According to Gallup, that's the most consumers have spent, on average, since 2008. Memorial Day sales helped drive up some of that spending, according to Gallup. However, analysts say that the increase in sales is also a sign that consumers' personal finances are looking up.
"Though Americans' views of the economy on a monthly basis have been flat throughout 2014, the May increase in spending suggests the possibility of some economic improvement," wrote Gallup's Justin McCarthy in a news release. "The six-year-high spending average last month is an indicator that regardless of whether Americans are feeling more confident about the economy, their personal cash flows have picked up."