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Credit card interest rates stuck at 15.06 percent

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CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.06%
15.06%
14.96%
Low interest 10.46%
10.46% 10.37%
Balance transfer 12.55%
12.55%
12.39%
Business 12.98%
12.98%
12.98%
Student
13.27%
13.27%
13.16%
Cash back  14.62%
14.62%
14.85%
Airline  14.51%
14.51%
14.63%
Reward 14.91% 14.91%
14.79%
Instant approval 28.00%
28.00%
28.00%
Bad credit 23.48%
23.48%
23.64%
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.
Source: CreditCards.com
Updated: Dec. 24, 2013

Average rates on new credit card offers remained unchanged this week, according to the CreditCards.com Weekly Credit Card Rate Report.

The national average annual percentage rate (APR) remained fixed at 15.06 percent for the sixth consecutive week.

Average rates are currently at their highest point since 2012. For the past 14 weeks, the national average has hovered above 15 percent. As a result, the average APR for the year recently increased to 14.98 percent -- .02 percent higher than the average APR for 2012.

None of the cards tracked by CreditCards.com advertised new interest rates this week. Issuers left most credit card promotions alone as well. 

Discover reintroduced a promotional APR to the "it" card for students, offering new cardholders six months to make interest-free purchases. Students are also offered a 10.99 percent promotional balance transfer for the same amount of time.

Holiday shopping pushes up consumer spending
Retailers are just now wrapping up their holiday promotions. However, new research from the Commerce Department shows that retailers have already rung up a substantial number of sales early this holiday season. 

According to a report the department released Dec. 23, consumer spending increased by a full half percent in November, the biggest increase since June.

Revised estimates also showed that consumers increased their spending by 0.4 percent the previous month.

November's relatively big increase in spending is good news for the U.S. economy, since economic growth is heavily dependent on consumer spending.

On Dec. 20, the Commerce Department reported that GDP grew at a significantly faster pace in the third quarter of 2013 than the government previously estimated, in part because of stronger consumer spending.

According to the revised report, the economy grew by 4.1 percent last quarter and by 2.5 percent in the second quarter. Consumer spending, meanwhile, picked up by 2 percent overall in the third quarter of 2013. 

Income ticks up
Consumers also had slightly more to spend this holiday season, according to the Commerce Department's most recent report. However, research shows that the total number of raises consumers received is tiny compared to previous months.

According to the report, disposable personal income increased by just 0.1 percent in November, after falling by 0.2 percent in October.

Despite having slightly more money to sock away, consumers didn't save nearly as much of their money last month as they did during October. According to the Commerce Department, consumers saved $46.4 billion less in November than they did the previous month. As a result, the personal savings rate fell to 4.2 percent in November -- down from 4.5 percent in October.

Consumer confidence increaseas, but ... 
As consumers spend a bit more and save a bit less, they are also feeling significantly more confident about the future, according to research from the University of Michigan and Reuters.

According to the group's Dec. 23 consumer confidence index, for example, consumer sentiment rose by nearly 10 percent this month, compared to the previous month, when consumers were still reeling from a 16-day government shutdown in October.

Analysts say that consumers are feeling nearly as good now as they did before October's fiscal crisis. However, consumers' brighter moods are largely due to holiday promotions and short-term economic gains, rather than renewed confidence in the U.S. government, say analysts.

"Consumers were clearly relieved when the D.C. gridlock ended. Confidence has bounced back to nearly the same levels it was before the crisis in mid-2013," said Surveys of Consumers chief economist Richard Curtin in a statement. However, "simply ending the shutdown or passing a new budget to keep the government open, however welcome, is not seen by consumers as a proactive step toward better economic policy."

Consumers have less faith these days in the government's economic policies, said Curtin. They also feel less sure about their income prospects. According to the Survey of Consumers' most recent data, for example, most consumers said their personal finances improved at least somewhat in recent months. However, none of the consumers surveyed expected much of a raise in the months ahead.

"While they anticipate the economy to improve and retailers to offer larger discounts, most consumers still anticipate tiny wage gains -- gains that are even smaller than the currently low inflation rate," said Curtin. "Consumers are not ready to celebrate, aside from those who have benefited from rising stock market wealth."

See related: Fed: Credit card balances shot up in October, How to use the grace period to avoid paying interest

Published: December 24, 2013


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