Interest rates on new credit card offers stayed put this week,
according to the CreditCards.com Weekly Credit Card Rate
The national average annual percentage rate (APR) remained at
14.96 percent Wednesday for the third consecutive week.
None of the cards tracked by CreditCards.com featured offer
changes this week. That includes changes to promotional balance
transfer offers and introductory (teaser) APRs.
Despite occasional fluctuations over the past six months,
average APRs on new credit card offers have remained exceedingly
stable throughout 2013. For example, average credit card interest
rates haven't changed by more than a handful of basis points since
the beginning of the year. A basis point is one-hundredth of 1
As a result, the national average has remained stuck between
14.93 percent and 14.98 percent since January 1. Average card rates
for the year are currently 14.95 percent -- which is just 1 basis
point shy of the 2012 average of 14.96 percent.
Cardholders' finances remain steady
Credit card holders have contended with relatively high average
interest rates on new card offers for some time. For example, the
national average has hovered between 14 percent and 15.22 for more
than three years.
The higher rates have made it significantly more expensive for
new cardholders to carry a balance than in previous years, when
average rates were closer to 12 percent. Despite higher APRs on new
card offers, however, a record number of cardholders are still
managing to pay their credit card bills on time.
Late payments on credit cards, for example, recently fell to the
lowest level since 1990, according to research released Monday by
the American Bankers Association.
The reduction in late payments is good news for credit card
issuers, since it means today's cardholders are less risky to lend
to and are much less likely to overextend themselves.
Credit card delinquencies -- meaning late payments by 30 days or
more -- have been falling steadily over the past several years, as
recession-scarred cardholders keep a tight rein on their finances
and avoid borrowing more than they can afford to repay.
credit card late payments have fallen to a 22-year
, according to the American Bankers Association -- a positive sign
that consumers' determination to keep their credit histories clean
The average percentage of late payments that issuers received
over the past 15 years, for example, is currently 3.87 percent of
all accounts. In the first quarter of 2013, by contrast, just 2.41
percent of all accounts were late.
The sharp improvement in the number of people who are repaying
their bills on time shows that most American households are
continuing to regain their financial strength and are in a far
better financial position than they were just a few years ago, said
ABA chief economist Keith Chessen in a
announcing the ABA's latest Consumer Credit Delinquency Bulletin.
Consumers are not only paying their bills on time because they want
to, says Chessen; they're paying them on time because they can
"Sharply lower delinquency levels reflect improving consumer
balance sheets, steady job creation and a continuing increase in
household wealth," said Chessen in the release.
Today's ultra-low delinquency rates are likely to remain at
record levels for some time and may even drop more in the near
future, according to a survey of bank risk professionals released
July 9 by the credit rating agency FICO. Three of four surveyed
expect late payments on credit cards to either hold steady over the
next six months or drop even further.
Of those surveyed, 61 percent said they expect average credit
card balances to rise by 2014. Similar percentages told researchers
they expect demand for new credit of all types to increase over the
next six months, and that lenders are more optimistic about
consumers' finances and are likely to increase the amount of credit
they're willing to hand out.
"These results say quite a bit about the psychology of borrowers
and lenders," said FICO's Andrew Jennings in a
accompanying the release. "After years of caution, lenders are now
in growth mode and feeling good about extending credit. But I find
the borrower side of the equation even more intriguing. It appears
that borrowers are beginning to shed the frugal habits that helped
them deleverage to the tune of more than a trillion dollars since
Fed: Credit card balances spike in May
Average credit card debt? Take your pick