Rate survey: Credit card interest rates stay put at 14.96 percent

Interest rates on new credit card offers remained at 14.96 percent Wednesday for the fourth consecutive week, according to the CreditCards.com Weekly Credit Card Rate Report.

CreditCards.com's Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 14.96%
Low interest 10.40%
10.40% 10.40%
Balance transfer 12.62%
Business 13.13%
Cash back  14.30%
Airline  14.63%
Reward 14.80%
Instant approval 15.49%
Bad credit 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. 5, 2012

None of the cards monitored by CreditCards.com advertised different rates this week, but that's nothing new.

Since January, the national average annual percentage rate ( APR) has changed just 16 times, often by just a hair.

Each time the national average has shifted, the movement has been by less half of a percentage point. As a result, average rates have hovered within rounding distance of 15 percent for the past two years.

In fact, average rates are so sticky these days, the current average APR is just 0.02 percent shy of where it was during the same week in 2011, when average rates hit 14.98 percent. Two years ago, average rates were just slightly lower, at 14.63 percent.

Issuers have been reluctant to make substantial changes to their credit card offers for some time, either in rates or  in the promotional offers they dangle in front of customers to get them to apply for a new card. Among the 100 cards tracked by CreditCards.com, the majority of cards have featured the same introductory balance transfer offer and promotional APR all year.

Banks remain cautious, but profits are way up
In previous years, issuers tested new offers and courted new customers more aggressively. This year, consumer demand for new credit has been noticeably weak, according to Federal Reserve research. Economic growth has been fitful, and fiscal uncertainty has remained high, thanks to serious economic challenges in Europe, lackluster growth in the U.S. and the looming possibility that the U.S. may dip back into recession if Congress fails to stop the automatic series of tax hikes and spending cuts, known as the fiscal cliff, that are scheduled for Jan. 1.  

As a result, issuers have remained exceptionally cautious about the amount of credit they're willing to extend to new and current customers. Consumers, meanwhile, have shown little interest in signing up for the cards they could get if they tried.  

Despite this year's economic challenges, however, issuers' finances appear to be doing just fine. Bank profits soared to a six-year-record in the third quarter of 2012, according to a report released Dec. 4 by the FDIC, thanks in part to fewer bad debts the banks had to write off and significant growth in the number of home and auto loans made to consumers.

Consumers' household finances have also improved, with late payments on credit cards falling steadily through most of the year. Consumers' wages, however, are still stagnant, according to the Commerce Department, and spending is now down after a promising spike earlier this fall. Consumer spending fell by $20.2 billion in October, said the Commerce Department in a report released Friday, in part because of the damage wrought to many consumers' incomes by Hurricane Sandy.  

Retailers expect holiday boost
Despite the economic uncertainty facing many consumers this Christmas, retail experts are predicting a healthy jump in holiday spending, according to projections released earlier this year by the National Retail Federation, a few weeks before Hurricane Sandy hit the East Coast.

Retailers hope that consumers' determination to remain relatively frugal during the holidays is just wishful thinking. "There's still some general anxiety amongst consumers when it comes to how the state of the economy is impacting their spending plans," said NRF chief economist in a statement released in October, before the relatively strong Black Friday sales had been tallied. "But retailers can expect to see excitement around their promotions and plenty of bargain hunters both online and in stores in the coming months."   

See related: Consumers spend more on cards, but avoid taking on new credit

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Updated: 03-25-2019