Oct. 1, 2014: Average rates on new card offers jumped this week to their highest point in nearly three years, according to the CreditCards.com Weekly Credit Card Rate Report.
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The national average annual percentage rate (APR) rose to 15.07 percent Wednesday after falling to 15.05 percent the previous week. The last time the average rate was this high was in January 2012, when the national average hit 15.14 percent.
This week’s rate increase was spurred by a change to a regional issuer’s card offerings. First National Bank of Omaha is no longer offering the Graphite American Express card. CreditCards.com replaced it in its database with another cash-back credit card offered by the same bank, the First National Bank American Express card.
Unlike the Graphite card, the First National Bank American Express card does not carry an annual fee, but it does have a slightly higher minimum APR of 15.99 percent.
Consumer spending rebounds
Consumer spending bounced back strongly in August, according to research from the Commerce Department.
Total consumer expenditures rose by 0.5 percent, according to the department’s latest analysis of income and spending, bolstering economists’ predictions that July’s tepid sales were just a temporary blip.
The Commerce Department previously estimated that consumer spending fell in July for the first time since January, but revised estimates show that consumers were slightly more active that month. Total consumer spending rose by less than 0.1 percent in July after increasing by 0.5 percent in June.
Many Americans also received a raise in August, boosting their overall spending power. Personal income rose by 0.3 percent, according to the Commerce Department, after increasing by just 0.2 percent in July.
Additional research released last month hinted that consumer spending was on the rise. Retail sales rose by 0.6 percent in August after inching up by just 0.3 percent in July, according to the Commerce Department.
Consumer appetite for new cars is especially strong this year, indicating that many are feeling good enough about their personal finances that they’re willing to take on a major purchase. “Purchases of motor vehicles and parts accounted for about half of the August increase,” reported the Commerce Department in its latest release on income and spending.
Consumers also spent considerably more on nondurable goods, such as clothing and personal products, and on services in August after pulling back the previous month.
Increased spending on nondurable goods is good news for retailers gearing up for the holiday season. However, consumers may not be in the mood to spend nearly as much as retailers would like.
Consumer confidence ebbs
According to from The Conference Board, consumer confidence tumbled in September after increasing several months in a row.
Consumers were substantially more pessimistic about the current job market, according to The Conference Board’s Consumer Confidence Survey. Consumers also expressed growing cynicism over the economy. For example, fewer Americans expected business conditions to improve over the next six months. Slightly more predicted that business conditions would get worse.
Meanwhile, a shrinking number of consumers were willing to say jobs are easy to get.
|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: Oct. 1, 2014|
See related:Study reveals rewards cards’ boom in popularity, Fed speeds up interest rate hike timetable