Interest rates on new credit card offers rose this week for the
first time in more than a month, according to the CreditCards.com
Weekly Credit Card Rate Report.
The national average annual percentage rate (APR) climbed to
14.96 percent Wednesday after Chase boosted the APR on one of it's
hotel rewards credit cards.
Cardholders who qualify for the Marriott Rewards Visa card from
Chase will now be offered an APR of 15.24 percent. Previously,
consumers were offered a 14.24 percent APR, which is just slightly
below the national average.
Chase spokesman Rob Tacey declined to comment specifically on
the change. However, he said cardholders are free to shop around
for a better fit. "Chase offers a number of cards with different
rates and benefits," wrote Tacey in an email. "Which is why we
encourage customers to choose the card that is best for them."
Late payments drop again
Average rates have remained near 15 percent for nearly three years.
However, despite contending with higher APRs than they did in the
past, most consumers are managing their credit card payments just
Late payments on credit cards, for example, fell again in May
for five out of six of the nation's biggest lenders, according to
Bank of America
each reported Monday to the Securities and Exchange Commission that
fewer people paid their credit card bills late last
said it received about the same number of late card payments in May
as it did in April. However, despite the lack of movement, the
overall number of late payments that it received remained
exceptionally low by historical standards.
The average delinquency rate during periods when the economy is
considered "normal," for example, hovers between 3 percent and 5
percent of all card payments, according to a Wall Street Journal
, published June 17.
Currently, all six of the nation's biggest lenders are reporting
delinquency rates -- which measure late payments by 30 days or more
-- that are well below that historical norm.
- The delinquency rate for American Express clocked in at 1.1
percent in May, according to a
published by Reuters.
- The delinquency rate for Chase fell to 1.6 percent.
- The delinquency rate for Bank of America dropped to 2.6
- The delinquency rate for Capital One slid to 2.97
- The delinquency rate for Discover hit 1.58 percent.
- The delinquency rate for Citi decreased to 1.98 percent.
Analysts say that the continual drop in the number of late
payments that issuers receive is a good sign that most cardholders
are remaining financially afloat, despite the soft economy, and are
serious about paying their bills on time.
Borrowers spending less income on debt
Many consumers are also enjoying smaller loan payments these days
in proportion to their income, according to a report released June
17 by the Federal Reserve. That could also be helping to keep them
According to the Federal Reserve's
Q1 Report on Household Debt Service and Financial
, consumers spent a slightly larger percentage of their income on
required loan payments in the first quarter of 2013, compared to
the last three months of 2012.
Despite the quarterly uptick, however consumers still spent far
less of their disposable income last quarter on required loan
payments than they had for most of the past three decades.
The ratio -- which measures the percentage of income that
consumers spend on required loan payments -- hit 10.32 in the
fourth quarter of 2012 -- a 33-year low. In the first quarter of
2013, it ticked up to just 10.49 percent. The third-lowest ratio on
record -- 10.51 -- was recorded in the fourth quarter of 1980 and
matched in the third quarter of 1983.
Experts say that the lower debt service ratios over the past
several quarters are primarily due to today's historically low
interest rates, which are pushing the total amount that consumers
have to pay on their loans way down. The Fed lowered the federal
funds rate -- a key interest rate benchmark that affects most
consumer loans -- down to zero in 2008 and has yet to raise it. As
a result, most consumers are paying far less to borrow than they
Fed signals rate hikes remain in distant