Credit card interest rates remain at 14.89 percent for third week
|CreditCards.com's Weekly Rate Report
||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: Jan. 21, 2015
rates on new credit card offers remained at 14.89 percent Wednesday for the
third consecutive week, according to the CreditCards.com Weekly Credit Card
the cards tracked by CreditCards.com advertised new interest rates. Issuers
left promotional rates alone as well.
credit card interest rates are currently at their lowest point in nearly three
years. The last time rates were this low was in February 2012 when the national
average briefly dipped to 14.87 percent.
the first time since August 2011 that the national average APR has remained
below 14.9 percent for more than two consecutive weeks.
past three years, credit card interest rates have mostly increased. In 2012,
for example, the national average APR for the year was 14.96 percent. In 2013,
it rose to 14.98 percent. In 2014, average rates climbed to 15.02 percent.
rates are expected to increase sometime in 2015 when the Federal Reserve raises
the federal funds rate target after leaving it near 0 percent for more than six
years. However, the Fed has declined to give a specific date for when it will
finally begin to raise rates.
variable rate cards are tied to the U.S. prime rate, which is directly
influenced by the federal funds rate. When the U.S. prime rate finally does go
up, interest rates on variable rate credit cards will also automatically increase.
Late payments inch up
five years after the Great Recession, consumers are still being extra careful
about how much debt they take on and are repaying their bills at record rates.
However, a growing number of consumers are starting to fall behind on their
payments, according to research released Jan. 20 by S&P Dow Jones Indices
fifth month in a row, the group's composite index -- which measures late
payments on auto loans, home loans and credit cards combined -- increased in
December as a larger number of consumers struggled to pay their bills during
had an especially hard time paying their mortgage and credit card bills last
month. For example, the default rate for first mortgages increased to 1.02
percent of all accounts in December -- up from 0.97 percent of accounts the
previous month. The first-time default rate for bank-issued credit cards rose to 2.65
percent of all accounts -- up from a historic low of 2.59 percent of all
accounts in November.
default rate on auto loans, by contrast, fell last month from 1.05 percent of
all accounts to 1.02 percent.
are still managing their finances much better than they had in previous years as they were significantly less likely to miss
a credit card payment last December than they were the previous year. The
credit card default rate for December 2013 was 2.98 percent. Late payments on
credit cards also continue to be near historic lows and show few signs of
increasing sharply any time soon.
sluggish wages could make it harder for some consumers to remain on top of
their bills, says S&P Dow Jones Indices' David Blitzer. "While the
economy is strengthening and consumer spending is gaining, wages have shown
little growth," said Blitzer in a news release. Even with the recent dip in gas
prices, a significant number of consumers are still struggling to keep up.
"Default rates remain very low, but could be a cause for concern if the
rising trend gains strength," said Blitzer.
Financial optimism abounds
stubbornly slow wage growth and uncertainty over interest rates, a growing
number of consumers agree that they are much better off now than they were last
January. According to Gallup's personal financial assessment poll released Jan. 15, 47
percent of consumers say their finances are in better shape this year than they
were at the beginning of 2014. Only 28 percent said their finances have
2014, by contrast, 42 percent of consumers said their finances were in worse
shape that year, while 35 percent said they were in better shape.
Gallup poll shows a clear majority of Americans -- 65 percent -- think their
personal finances will continue to improve over the next 12 months. Only 15
percent think their finances will sour. "Americans' ratings of their
personal financial situations have improved greatly over the past year,"
said Gallup's Jeffrey M. Jones in a news release. "The current personal
financial situation ratings are now at or near the high levels Gallup measured
in the past four decades when the U.S. economy was strong."
See related: Fed: Countdown to higher rates continues at 'patient' pace
Published: January 21, 2015