Average rates on new credit card offers held steady this week,
according to the CreditCards.com Weekly Credit Card Rate
The national average annual percentage rate (APR) remained at
15.06 Wednesday after ticking up the previous week for the second
time in four weeks.
This is the 10th week this year that the national average has
remained above 15 percent. Average rates began periodically
increasing in September after remaining largely unchanged for most
On Sept. 4, the national average rose from 14.95 percent to
14.99 percent, then increased to 15.02 percent three weeks later.
Since then, the national average has increased three more times
over the course of two months.
This year, issuers have raised credit card interest rates more
times than they have lowered them. Since Jan. 1, for example, the
national average has increased nine times and fallen just five
Credit card late payments increase slightly
Despite slightly higher APRs on new card offers, cardholders have
managed to stay on top of their bills through most of 2013.
Late payments on credit cards, for example, fell to record lows
earlier this year, according to multiple reports, and are just now
starting to creep higher.
Delinquencies (late payments by 90 days or more) rose to 1.36
percent last quarter, according to TransUnion's latest quarterly
report, after falling near record lows the previous quarter.
Year-over-year, the national delinquency rate is down
significantly from where it was in 2012, according to TransUnion.
In the third quarter of 2012, for example, the national delinquency
rate hit 1.50 percent. "While consumer credit card delinquencies
increased on a quarterly basis, they continued an overall trend of
strong performance as evidenced by the yearly decline," said
TransUnion's Ezra Becker in a
Late payments are expected to increase again in the final
quarter of the year as more people fall behind on payments during
the holiday season. However, experts say that generally happens
this time of year when people traditionally increase their overall
Credit card balances remain near record lows
Consumers are expected to significantly increase the amount they
spend over the next few months as they gear up for the holiday
However, new research from TransUnion shows that credit card
holders are continuing to be careful about the amount of debt they
take on and may not have the appetite to maintain a big balance for
According to TransUnion's latest report, for example, the
average credit card holder carried about $5,235 in card debt in the
third quarter of 2013 -- $70 less than last year.
In the second quarter of 2013, cardholders carried an average of
$5,226 in credit card debt -- just $9 less than they carried the
Experts say that cardholders' relatively low levels of debt show
that many credit card holders are still chipping away at their
balances and are focusing more heavily on getting rid of the debt
"Our data show that consumers continue to deleverage, with
balances dropping in the past year and remaining near historical
lows," said TransUnion's Ezra Becker in the release.
That could bode well for future card offers, said Becker, since
consumers are more attractive customers when they have lower levels
of debt. "It appears that, with continued strong credit performance
and relatively low debt levels, consumers may be in a strong
position to receive more attractive, feature-rich offers from
credit card lenders."
However, issuers are still careful about the total amount they
lend, said Becker, and aren't approving nearly as many cards for
consumers with blemished credit.
According to TransUnion's most recent report, the total number
of open credit card accounts increased year over year by about 6.5
million in the third quarter of 2013. The percentage of accounts
belonging to consumers with less-than-prime credit scores actually
fell this year -- from 29.82 percent of all accounts in the third
quarter of 2012 to 29.06 percent in the third quarter of 2013.
"Both the demand for and the supply of credit cards appears to
be rising," said Becker in the release. "It's a good trend for
consumers and lenders alike, particularly as delinquency rates
remain low. Yet despite low delinquency numbers, card lenders have
remained cautious in their underwriting, as can be seen by the
differences in originations from the recent past in terms of both
overall volume and the portion of new cards going to non-prime
Income growth stalls
Lenders are likely to remain cautious for awhile. The job market
has improved significantly in recent months, giving issuers a
reason to hope that cardholders' personal finances will continue to
But the amount of income cardholders have to spend has grown
slowly and unevenly in recent years and, according to new research
from the Commerce Department, income growth actually stalled in
some parts of the country in 2012.
released Nov. 21, personal income grew more slowly in 2012 than it
did the previous year in the majority of metropolitan areas around
the country. More than 300 metropolitan areas saw slower growth in
the number of raises handed out in 2012, compared to 2011. Only 65
metropolitan areas saw faster growth.
Overall, consumers living in metropolitan counties had about 4.2
percent more money to spend in 2012. Consumers living in more rural
areas brought in about 3.7 percent more money.
NY Fed: Household debt rise marks a turning
Credit card balances extend their slide