December 17, 2014: Average rates on new credit card offers decline slightly to 14.92 percent this week, according to the CreditCards.com Weekly Credit Card Rate Report.
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|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: Dec. 17, 2014|
Average rates on new credit card offers decreased slightly this week, according to the CreditCards.com Weekly Credit Card Rate Report.
The national average annual percentage rate (APR) decreased to 14.92 percent Wednesday as a result of an update to CreditCards.com’s card database.
Chase no longer offers the University of Florida rewards credit card, so it was replaced with the Frontier Airlines MasterCard, which has a 15.99-24.99 percent variable APR. This airline rewards card also offers a 0 percent introductory balance transfer APR to new cardholders for 15 months.
For the fourth week in a row, issuers did not make any annual fee or promotional offer changes.
Credit borrowing, balances growing
Nonmortgage credit balances reached their highest level in more than five years last month, according to the November 2014 Equifax National Consumer Credit Trends Report. Nonmortgage credit balances — auto loans and cards issued by retailers and banks — totaled $3.1 trillion in November, with each sector showing year-over-year balance increases as well.
Retailer-issued card balances increased 4.8 percent ($71.1 billion) from 2013. Additionally, the total number of new retail card accounts issued from January to September of this year reached 28.5 million, a 2.5 percent increase over 2013 and the highest since 2007.
Balances on those new card accounts reached a six-year high, totaling $48.1 billion (3.4 percent year-over-year increase).
Bank-issued card balances are also up 4.7 percent ($611.7 billion) from 2013 as well. The total number of new cards issued year-to-date in September was 37.7 million, a six-year high and a 20.1 percent increase over last year’s numbers, according to the Equifax report.
Of the country’s top 25 largest metropolitan areas, 17 have seen increases in total consumer debt — mortgages, autos, home equity loans, bank and retail cards — in the third quarter compared to the same time last year.
Total U.S. consumer debt grew by nearly 1 percent year-over-year, from $9.82 trillion in the third quarter of 2013 to $9.91 trillion in 2014, according to Equifax.
Consumer confidence, spending surge
New consumer confidence data indicates that these borrowing and spending trends are likely to continue through the end of the year.
American’s confidence in their personal finances has hit new highs this month in the midst of the holiday shopping season, according to the Thomson Reuters/University of Michigan index of consumer sentiment.
The preliminary December index reached 93.8 last week, the highest point since January 2007 and up from 88.3 last month.
Months of falling gasoline prices combined with sustained hiring and wage growth are freeing up disposable income for households during the busiest retail shopping season.
“Everything is pointing in the right direction for the consumer,” said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto, in a Bloomberg article. “We expect a pretty good run for consumption growth in the fourth quarter.”
The latest MasterCard SpendingPulse data reports total U.S. retail sales increased by 2.3 percent in November. Thanksgiving weekend retail sales in particular increased 0.9 percent over 2013, which MasterCard has attributed to the increasing levels of economic confidence among consumers.
Based on this initial data, SpendingPulse forecasts total retail sales to grow 5.5 percent for the entire holiday season.