Interest rates on new credit card offers remained static
Wednesday, according to the CreditCards.com Weekly Credit Card Rate
The national average annual percentage rate (
) remained at 14.95 percent, after falling the previous week for
the first time in nearly a month.
Wells Fargo prompted last week's dip in rates by lowering the
APR on its
student credit card
The move -- which was the first by Wells Fargo in months (at
least among the cards tracked by CreditCards.com) -- barely dented
the national average, pushing it down by just a hundredth of a
Most credit card issuers have refrained from making significant
changes to their offer terms for much of the past year.
Instead, many are choosing to selectively adjust offers on just
a small number of cards. As a result, the national average hasn't
moved below 14.9 percent since February 2012.
Credit card mail volume leaps
Most credit card issuers have also remained relatively conservative
with their marketing efforts in recent months. For example, issuers
dialed back the number of card offers they mailed to consumers in
2012 by nearly 40 percent compared to the previous year, according
to research by Mintel Comperemedia.
Issuers' appetites for new customers may be increasing,
Issuers mailed 16 percent more offers in January 2013 than they
did in December 2012, according to a research note released Feb. 25
by the financial services firm Credit Suisse, citing Mintel
Comperemedia research. Compared to the same period in 2011, credit
card mailings jumped an impressive 21 percent.
The double-digit leap in mail volume is significant, considering
how flat credit card mail volume was for most of 2012.
After dropping precipitously in December 2011, mail volume
fluctuated somewhat in early 2012, but remained exceptionally flat
in the summer and fall. By the end of the year, Mintel Comperemedia
research shows that credit card mail volume dropped by 38 percent
in 2012 compared to 2011, according to a Jan. 22 research note by
When mail offers dropped, experts partly attributed it to a
shift in marketing strategy. For example, rather than rely as
heavily on mailing credit card offers to consumers' mailboxes,
which can get expensive, many issuers are experimenting with other
ways to reach new customers.
In addition, the feeble economic recovery in the U.S. and the
ongoing fiscal uncertainty created by ongoing legislative battles
over government spending and taxation also played a significant
role in dampening issuers' appetites, experts say.
Consumer spending, for example, was relatively weak throughout
2012, with credit card debt unexpectedly dropping by more than 5
percent in the final month of the year, according to
consumer debt research by the Federal Reserve
. The unemployment rate, meanwhile, declined in 2012, but barely,
beginning the year at 8.3 percent and ending it at 7.8 percent,
according to the
However, credit card issuers, at least, appear to be feeling
confident enough in the overall direction of the U.S. economy that
they're willing to hunt for new customers more aggressively.
"We believe that 2013 will see moderately increasing competition
for revolving balances," wrote Credit Suisse analysts Moshe
Orenbuch and Meredith Roscoe in a research note about last month's
jump in credit card mailings. Already, competition between credit
card issuers is strong, they say, especially when it comes to
reaching out to cardholders with deeper pockets.
Consumer confidence is also up
Consumers, meanwhile, are also feeling somewhat better about the
economy as well -- at least for now.
Significantly more consumers reported feeling optimistic about
the U.S. economy in February after reporting increased pessimism
the previous month, according to a new report from the Conference
Board, released Feb. 26.
"Consumer Confidence rebounded in February as the shock effect
caused by the fiscal cliff uncertainty and payroll tax cuts appears
to have abated," said the Conference Board's Lynn Franco in a
. "Consumers' assessment of current business and labor market
conditions is more positive than last month. Looking ahead,
consumers are cautiously optimistic."
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