Rates remain stuck at 15.06 percent for fourth week
By Kelly Dilworth | Published: September 17, 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: Sept. 17, 2014|
Average rates on new credit card offers didn't budge this week, according to the CreditCards.com Weekly Credit Card Rate Report.
The national average annual percentage rate (APR) remained stuck at 15.06 percent Wednesday for the fourth consecutive week.
None of the issuers tracked by CreditCards.com revised credit card terms this week. They left promotional rates, including 0 percent balance transfer offers and introductory APRs, alone as well.
The national average is currently just 0.07 percent higher than it was a year ago, when average rates hit 14.99 percent. On Sept. 25, 2013, the national average rose to 15.03 percent and has remained at 15 percent or higher ever since.
The relative stability in credit card interest rates underscores just how reluctant issuers have been to substantially change rates. Average card rates have remained within rounding distance of 15 percent for nearly four years.
Retail sales rebound in August
New research from the Commerce Department shows that retail spending jumped 0.6 percent last month, helping ease economists' fears that consumer spending was beginning to contract.
The Commerce Department also helped tamp down concerns by revising its July estimate upward. The department reported that retail sales rose by 0.3 percent in July, thanks in part to stronger clothing and specialty store sales. Previously, the department said retail sales hardly moved in July after inching up by just 0.2 percent in June.
The latest estimates are welcome news to retailers after the Commerce Department reported in August that total spending fell in July by 0.1 percent.
Automobile sales were especially robust last month, rising by 1.5 percent. Consumers also spent significantly more on building materials and gardening supplies, furniture and electronics, health and personal care items, music, books, sporting goods and hobby items and meals out. In addition, they spent slightly more on groceries and clothing.
Last month's broad-based increases indicate that consumers are not only feeling relatively confident about their finances, they also have enough room in their budgets to splurge on entertainment items, such as music and electronics.
Economists caution, however, that the pickup in retail sales may only be temporary -- particularly since wages are still relatively flat. "The rise in consumer confidence, labor markets and retail sales is encouraging," said the National Retail Foundation's Chief Economist Jack Kleinhenz in a statement. A National Retail Foundation analysis also found that retail sales jumped last month.
"August sales figures signal that consumers are willing and ready to spend as the economy improves," Kleinhenz added. "However, until the pace of income picks up, we should not expect a sustained surge in spending."
Credit card usage also strong
That said, consumers are borrowing more heavily, which could indicate that consumers are feeling confident enough in their job status.
Year over year, credit card spending grew by 5.8 percent last month, according to First Data Corp. research, thanks in part to stronger retail, hotel and travel sales. Debit card spending, by contrast, advanced much more slowly. Spending on signature debit grew by just 1.9 percent in August. Debit card spending using a PIN grew by 3.4 percent.
Consumers also used plastic more regularly in August. Credit card transaction growth -- which measures the total number of times consumers used their cards -- expanded by 6.1 percent.
See related: Card balances rise for 5th straight month