Interest rates on new credit card offers rose to 15.05 percent
this week, according to the CreditCards.com Weekly Credit Card Rate
Barclays spurred this week's rate change by increasing the APR
on the Wyndham Rewards Visa Signature card. Applicants who access
the card online are now offered an APR range of 15.24 percent to
19.99 percent. Previously, some applicants were offered an APR as
low as 13.24 percent.
American Express and Chase were active this week as well. Chase
reinstated the 15-month, 0 percent APR offer on the Chase Freedom
card after briefly eliminating it. American Express modified the
introductory offer period for the Blue for Business card. Its
cardholders now have nine months to make interest-free
Balances nearly unchanged
Credit card issuers have had a hard time this year encouraging new
and current cardholders to spend.
Average bank card balances, for example, hardly budged in the
third quarter of 2013, compared to the same time last year,
according to new research from the credit agency Equifax.
In 13 of the 25 largest metropolitan areas in the U.S., card
debt rose by less than 1 percent in the past year. It six metro
areas, card debt declined.
Metro regions that saw significant drops in card debt include
Detroit, Chicago and Phoenix.
Experts often point to declining credit card debt as a sign that
cardholders are worried about their finances and, as a result, cut
back on spending or repay their balances in full.
Some metro areas, particularly those with significantly improved
local economies, fared better, according to Equifax. For example,
credit card debt rose by nearly 2 percent in the
Washington-Baltimore metro region and by nearly 3 percent in
Houston and its surrounding cities.
Residents in the Miami-Fort Lauderdale metro region, in
Dallas-Fort Worth and in San Diego also increased their average
debt loads by more than 1 percent, according to Equifax.
Analysts often pay close attention to regions that are
increasing their average debt loads, since it could mean that
residents in those areas are feeling more economically confident --
and thus willing to take the chance on higher credit card
Still, a large number of U.S. cardholders are still cautious
about how much debt they're willing to carry and are limiting the
amounts they charge.
Retail cards see pop in usage
Retailer credit cards, however, are seeing a bigger uptick in debt
than mainstream card issuers.
According to data released Nov. 5 by Equifax, card balances on
cards issued by retail store brands grew by more than 7 percent in
the third quarter of 2013, compared to the same time last year.
Card balances nationwide grew by just 0.37 percent last
General-purpose bank cards in metro areas such as Phoenix and
Detroit saw significant declines in balances, but balances on store
cards in those regions grew. For example, in the Phoenix-Mesa metro
region, retail card balances swelled by 7.67 percent in the third
quarter. In the Detroit-Ann Arbor-Flint metro area, debt on store
cards grew by 6.28 percent.
Analysts say that part of the reason why retail card balances
have grown at a faster pace than bank cards may be because frugal
consumers are taking advantage of store card deals that often lower
the cost of a purchase.
"Consumers may be opting for retail credit cards because of the
promotions, discounts and other perks they get at the register,"
said Equifax's Trey Loughran in a
"Other consumers are likely compartmentalizing their purchases,"
he added, by "opening retail accounts to pay for larger purchases
over time and using their bank cards for everyday purchases like
gas and groceries to be paid in full each month."
Consumers with lower credit scores -- many of whom live in
economically depressed regions -- also have an easier time gaining
access to store credit, says Loughran, and that, too, may partially
account for the steeper rise in debt.
"Retail card issuers are continuing to extend credit to
near-prime borrowers, making store credit a viable option for
consumers with lower scores who may have difficulty opening a bank
card," said Loughran in the release.
Some traditional bank card issuers are slowly
loosening their credit standards
for select applicants, according to research released Nov. 4 by the
Federal Reserve. However, it's still not easy for consumers with
blemished credit to qualify for a new card with favorable
Fed keeps its foot on the gas