Card APRs locked at 15.03 percent for 5th week

By's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.03%
Low interest 10.37%
10.37% 10.46%
Balance transfer 12.64%
Business 12.80%
Cash back 14.91%
Airline 15.46%
Reward 15.00% 15.00%
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 all leading U.S. issuers and representing every card category listed above. Introductory, or teaser, rates are not included in the calculation.
Updated: Aug. 6, 2014

Interest rates on new credit card offers held firm at 15.03 percent for the fifth consecutive week, according to the Weekly Credit Card Rate Report.

Most issuers left credit card terms alone this week. The sporting goods store Cabela's fine-tuned the APR on the Cabela's Club Visa by .01 percent, but the change was so small, it didn't affect the national average.

Unlike most U.S. credit cards, the Cabela's Club Visa is tied to the 1-month Libor rate, which increased this week from 0.15 percent to 0.16 percent. As a result, the APR on the Cabela's Club Visa inched up as well.

Frequent Cabela's shoppers who apply for the store card will now be offered an APR as low as 15.15 percent for nonstore purchases or as high as 21.15 percent.  

Consumer spending picks up
Consumers are spending slightly more this summer, according to multiple reports. But they're being careful about what they buy and limiting how much they spend on discretionary purchases  such as restaurant meals and vacations.

According to the U.S. Commerce Department, total consumer spending rose 0.4 percent in June, after increasing by a revised 0.3 percent in May.

Consumers spent significantly more on nondurable goods, such as food and clothing, after pulling back on these types of purchases in May. They also spent more on durable goods, such as new cars and appliances.

A separate report released by Gallup showed that spending on nonessential items also increased in July, boding well for retailers gearing up for back-to-school season. But not everyone was in the mood to spend last month.

Wealthier Americans spent considerably more in July, increasing their average daily spending on discretionary items from approximately $157 per day to approximately $190 per day. That helped push the average daily spending for all Americans to about $94 per day.  

But low- and middle-income consumers who make less than $90,000 per year were feeling more pinched last month and reduced their average daily spending from approximately $79 per day to an average of about $75 per day.

July was the first time since April that low- and middle-income Americans tamped down their spending. Gallup data shows that most Americans haven't changed their spending habits much at all this year. Since January, for example, average daily spending for Americans who make less than $90,000 has hovered between $69 per day and $79 per day, which is similar to how much they spent in 2013. That suggests that most Americans have developed a budget for their daily spending and are sticking to it.

Wealthier Americans, by contrast, have substantially stepped up their spending since the beginning of the year. In January, for example, Americans who make more than $90,000 spent an average of $137 per day on store and online purchases, meals out and gas. In July, they spent approximately $53 more than that, on average, suggesting to analysts that upper-income Americans have a lot more room to spend on summertime activities such as summer vacations and meals out.

In an Aug. 6 blog post, New York Federal Reserve economist Jonathan McCarthy noted that, overall, discretionary spending in the U.S. is increasing as the economy continues to improve. But it's still far below pre-recession levels and most Americans show few signs of letting their guard down any time soon. "It appears that households remain - almost five years after the end of the recession -- wary about their future income growth and employment prospects," wrote McCarthy in the post. Until Americans begin to feel more confident in the U.S. economy, consumer spending is likely to remain relatively "soft" for some time.

See related: How America pays: Fed study paints big picture of card trends

Published: August 6, 2014

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