Rate survey: Credit card interest rates still stuck at 14.96 percent

Interest rates on new credit card offers remained locked at 14.96 percent for the sixth 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. 19, 2012

None of the cards tracked by CreditCards.com featured rate or offer changes this week. However, that's been the norm nearly all year.

Credit card interest rates have remained in a holding pattern for most of 2012. Since January, rates have remained unchanged 35 weeks out of 51.

In the past six months, interest rates have been especially sticky, changing just six times, usually by just a hair. In June, the national average APR clocked in at 14.92 percent, less than half of a percentage point shy of the year's highest average rate, 15.14 percent. The all-time record high national average for new card offers online was 15.22 percent, set in December 2011.

Since June, average rates have ticked up only slightly, hitting 15.01 percent in October, before falling to 14.96 percent the following month.

The changes have been so small they have made little impact on cardholders' pocketbooks. Average interest rates have remained within rounding distance of 15 percent since October 2010, and show few signs of changing significantly anytime soon.

Financial prudence here to stay
Despite the stagnant average interest rate on new credit card offers, many cardholders are managing their credit card bills much better than they did in the past. Credit card delinquencies -- which measure the number of late payments issuers receive by at least 30 days or more -- fell steadily through most of the year, before increasing slightly by the third quarter of 2012

Experts predict that cardholders will continue to place a high priority in 2013 on paying their credit card bills on time. However, a slightly larger number of cardholders may miss at least some of their payments next year, according to the credit reporting agency TransUnion's most recent credit card delinquency forecast.    

TransUnion predicts that the number of cardholders who will miss payments by 90 days or more will tick up to 0.87 percent of all accounts by the fourth quarter of 2013, up from 0.83 percent in the fourth quarter of 2012.

That's still extremely low, however, by historical standards, note TransUnion analysts. "Between 2000 and 2011, the credit card delinquency rate has averaged 1.24 percent during the fourth quarter," wrote the analysts in a press release announcing the credit reporting agency's most recent forecast. "In the 51 quarters since Q1 2000, the credit card delinquency rate has only been below the 0.90 percent threshold 10 times."  

Experts say that the predicted increase in credit card delinquencies is partially due to the fact that so many consumers have refocused their efforts on paying their bills on time, it's inevitable that delinquencies will rise once consumers get more comfortable with carrying credit card debt. 

The slight uptick in credit card delinquencies may also be due to the fact that credit card issuers are approving more applicants in the past few years than they were in the immediate aftermath of the recession, said TransUnion's Steve Chaouki in a statement.  

"The credit card delinquency rate continued to remain low in 2012 after reaching its lowest level since 1994 in the second quarter of 2011. We expect much of the same in 2013 as consumers have come to rely on their credit cards for liquidity with continued high unemployment rates," said Chaouki.

However, he notes, "we have seen credit card delinquencies drift somewhat higher in the past year. Some of this can be attributed to the fact that credit card delinquencies were so low, that at some point they were bound to increase. A more significant factor may be that credit card originations have been increasing in the past few years, and with that increase we have seen nonprime borrowers receive not only more credit cards, but also comprise a larger share of new credit cards."

The increase in the number of consumers with blemished credit who were approved for a new card in 2012 compared to the previous year was relatively small, according to TransUnion. However, there has been a much sharper rise in the number of nonprime consumers being approved for new cards compared to two years ago, when credit card lending standards were much tighter.  

TransUnion analysts also expect cardholders to carry slightly larger credit card balances in 2013. Consumers are currently carrying an average of $5,050 in credit card debt, according to TransUnion. Analysts expect that figure will balloon to around $5,446 by the end of next year.

Despite analysts' predictions that cardholders will fall behind somewhat in 2013, consumers have high hopes for keeping their finances in check and paying down the debt they already have. According to a separate survey released Dec. 17 by TransUnion, 53.5 percent of consumers say they plan to save more money in 2013, while more than 48 percent say they want to trim the amount they spend on discretionary purchases. Around 42 percent say that one of their New Year's resolutions is to pare down the debt they currently owe. 

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

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Updated: 04-19-2019