Interest rates on new card offers held steady this week,
according to the CreditCards.com Weekly Credit Card Rate
The national average annual percentage rate (APR) stayed put at
15.03 percent Wednesday after increasing incrementally for two
None of the cards tracked by CreditCards.com introduced new
terms this week. Issuers left promotional balance transfer offers
and introductory APRs alone as well.
Most card issuers have left interest rates alone throughout
2014. Over the past few months, Chase has gradually increased APRs
on a handful of travel rewards cards, including the United
MileagePlus Explorer card, the Southwest Airlines Rapid Rewards
Plus card, the IHG Rewards Club Select card and the Marriott
Rewards Visa Signature card.
The few times that APRs have changed, they've usually gone up.
Since Jan. 1, for example, the national average has increased five
times and declined twice.
Credit card spending picks up
Credit card holders are using their cards more often this summer.
According to First Data Corporation, credit card transaction growth
-- which measures the number of times people swiped their cards --
jumped 5.3 percent last month.
The total amount of money people spent on their cards also
picked up by 3.9 percent. However, the rate of growth was slower in
June than it was the previous month, when card spending grew by 4.9
percent compared to the previous year.
Despite last month's slower rate of growth, credit card spending
is still growing faster than debit card spending, according to
First Data's latest SpendTrend report.
Spending on signature debit, for example, grew by just 2 percent
last month. Spending on PIN debit grew by 3.3 percent.
The total number of transactions people are making using their
debit cards also grew more slowly this summer -- especially
compared to credit.
The number of times that debit card holders punched in a PIN,
for example, grew by just 2.8 percent last month. Meanwhile, the
number of times that people used signature debit was roughly equal
to June 2013.
Analysts say that part of the reason why more people are turning
to their credit cards this summer rather than their debit cards or
other forms of payment is because many people are using credit to
finance their summer vacations. People typically prefer to pay for
hotels and airfare with credit cards, rather than cash.
According to First Data's Krish Mantripragada, consumers are
also feeling much more comfortable with using credit now that the
economy has significantly improved. In addition, credit is somewhat
easier to get.
"An increase in credit usage reflects steady growth in credit
lending, improved consumer credit quality and a growing consumer
confidence in their personal finances," said Mantripragada in a
Consumer spending remains relatively strong
Total consumer spending was also more sluggish in June, according
to First Data's SpendTrend report. For example, spending on all
types of plastic payment cards, including credit, debit and prepaid
cards, grew by just 3 percent last month -- down from 4.2 percent
However, analysts say that consumer spending is still much
stronger than it used to be, especially compared to 2013. "This
month's trends showed some slowing in spending growth but overall,
spending remains healthy, reflecting the recovering economy and
consumer willingness to spend," said First Data's Mantripragada in
Consumers spent slightly more on travel this summer than they
did in 2013. They also dined out more often and spent more to
upgrade their homes with new furniture and garden supplies.
Retail spending didn't grow nearly as quickly in June as it did
in May; but analysts at First Data Corporation say that could be
due to a temporary spike in gas prices, rather than a substantial
pullback in spending.
Collectors see less credit card debt