Credit card interest rates remain at 14.96% for fifth week
By Kelly Dilworth | Published: July 24, 2013
|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: July 24, 2013|
Interest rates on new credit card offers remained unchanged Wednesday for the fifth consecutive week, according to the CreditCards.com Weekly Credit Card Rate Report.
Rates on all 100 cards tracked by CreditCards.com stayed the same this week. As a result, the national average annual percentage rate (APR) remained fixed at 14.96 percent.
Promotional offers -- including 0 percent balance transfer offers and introductory APRs -- were also unchanged.
This week marks the 22nd week this year that interest rates have remained flat. Credit card issuers have been slow to change card offers for most of 2013.
For a brief period, card issuers were more active. Between April 24 and June 19, for example, the national average spiked three times and fell twice as card issuers tested new APRs on a select number of cards. The activity didn't last long, however. Most card offers haven't changed since June.
Issuers dial back summertime
Credit card terms aren't the only items receiving less attention this summer. Issuers also spent considerably less money on direct mail offers last month -- a sign that they may be dialing back marketing efforts after ramping up briefly in May.
Twelve percent fewer offers were mailed to consumers' homes in June, according to a research note released July 22 by the financial services firm Credit Suisse, which cited Mintel Comperemedia research.
Issuers substantially increased the number of glossy mailings sent to consumers' homes earlier this summer, but then cut back significantly the following month.
Overall, 328 million targeted offers were mailed in June -- down from 360 million offers in May.
The cutbacks aren't nearly as much as those made in 2012, however. Despite the month-over-month drop in credit card mailings between May and June, the total number of offers sent last month is still slightly above average for 2013.
So far, card issuers have mailed, on average, about 327 million offers per month over the first six months of 2012.
That's significantly above the amount mailed in 2012, when issuers were spending far less money on direct mail. Overall, consumers have received about 23 percent more offers this year than in the first six months of 2012.
Last year, the number of offers were dialed back by nearly half and issuers instead focused on other, cheaper methods for marketing cards to new customers.
"Last year was characterized by a significant slowdown in mail volume as the two largest mailers in 2011 (Citibank and Chase) notably slowed," wrote Credit Suisse Analysts Moshe Orenbuch and Meredith Roscoe in Monday's note.
This year, issuers -- especially Citibank -- are competing more fiercely for new accounts and are pouring far more resources into attracting new cardholders, say analysts. (Mailing offers directly to consumers' homes is particularly expensive compared to other forms of credit card marketing.)
"Competitiveness among the large commercial banks has increased," wrote Orenbuch and Roscoe in the note.
Citibank, specifically, has sent the largest number of mailings over the past 12 months, according to CreditSuisse.
In June, the majority of offers consumers received were from Citi. New card offers from Capital One, Discover and American Express also made up a substantial portion of the offers landing in consumers' mailboxes.
Overall, issuers are expected to mail about 3.6 billion offers by the end of 2013, according to analysts at CreditSuisse -- up from 3 billion in 2012.
Issuers still aren't spending nearly as much money on direct mail offers as they did before the recession, however.
In 2007, for example, issuers mailed 7.2 billion offers, according to data released by Credit Suisse. In 2006, issuers sent 8.1 billion offers -- more than twice the number of offers that issuers are projected to send in 2013.
The smaller number of offers that issuers now mail underscores just how much the financial services industry has changed since the recession.
Credit card issuers are slowly loosening their standards for new cardholders and reaching out to a broader pool of applicants. However, they are still very cautious about the amount of risk they're willing to take on attracting -- and accepting -- new customers.
- Cash advance survey 2017: Read fine print before seeking quick cash – A review of 100 credit card cash advance policies found cash advance transactions can quickly consume an available credit line with fees, high interest charges, among other undesirable terms ...
- Household debt passes pre-recession peak, NY Fed finds – U.S. household debt has surpassed its pre-recession peak for the first time, says new data from the New York Fed. Economists say milestone doesn't mean consumers are over-leveraged ...
- Poll: Credit card fraud alerts surge, false alarms still common – Consumers report a 15 percent increase in contacts from banks about credit, debit card fraud ...