Average rates on new credit card offers remained stuck at 15.01
percent Wednesday for the fifth straight week, according to the
CreditCards.com Weekly Credit Card Rate Report.
Most card issuers left credit card terms unchanged this
Capital One boosted the maximum possible APR on the Quicksilver
Cash Rewards credit card by 2 percentage points. However, the rate
hike didn't affect the national average because CreditCards.com
only considers a card's lowest possible rate when calculating
average interest rates.
Cardholders who apply online for the Quicksilver Cash Rewards
card are now offered a wider range of possible APRs. Applicants
with the best credit may qualify for an APR as low as 12.9 percent.
Applicants with lower scores could receive an APR as high as 22.9
percent, up from 20.9 percent.
This higher APR exceeds the national average for cards geared
toward consumers with bad credit, but despite the higher rate, the
Quicksilver Cash Rewards is marketed toward consumers with
Borrowers reprioritize debt payments
For the first time since the recession, cash-strapped borrowers are
placing a higher priority on their mortgage payments than credit
card bills, according to new research from the credit reporting
agency TransUnion. That could signal that U.S. consumers are
feeling more comfortable about their job prospects.
The research, released March 19, reveals the credit card
delinquency rate (measured by payments at least 30 days late) for
consumers who carry three types of loans -- mortgages, credit cards
and auto loans -- was higher in September 2013 than the mortgage
delinquency rate for the same group of borrowers.
Previously, the mortgage delinquency rate was typically higher
because recession-scarred consumers were choosing to let their
mortgages go and pay their credit card bills first.
The same study also reported the credit card delinquency rate
was higher than the mortgage delinquency rate in December 2013 as
well -- indicating to analysts that consumers' payment habits are
finally starting to shift for the first time in nearly five years.
"This reverses a trend that began in September 2008 when the
mortgage crisis drove consumer payment preferences toward paying
credit cards ahead of mortgages," said TransUnion in a
Before the 2008 financial crisis, consumers who didn't have
enough cash to pay their bills on time typically chose to pay their
mortgages first and let their credit card bills slide. But soon
after the economy crashed and credit became extremely difficult to
get, many consumers began placing a higher priority on credit card
payments -- often at the expense of their mortgages.
"One of the biggest impacts of the Great Recession to the credit
system was its influence on consumer payment patterns," said
TransUnion's Ezra Becker in the press release. "As unemployment
rose and home prices cratered, increasingly more consumers were
faced with financial constraints and had to make difficult
Since credit cards allowed consumers to continue making
purchases long after they ran out of cash, many chose to place a
higher priority on maintaining good relationships with their card
issuers, said Becker in the release. That way, they could continue
making purchases even if they lost their job or had trouble finding
a new one.
"This was a measurable result of the economic environment,
wherein many consumers were underwater on their mortgages and at
the same time needed the liquidity afforded by credit cards to make
ends meet," he said.
Now that the job market and the housing market have both
improved significantly and consumers have more buying power, many
consumers appear to be less afraid of losing that liquidity. And,
as a result, are choosing their homes over their credit cards --
just like they did before the Great Recession.