Interest rates on new credit card offers fell Wednesday for the
first time in nearly a month, according to the CreditCards.com
Weekly Credit Card Rate Report.
The national average annual percentage rate (APR) returned to
14.95 percent this week after remaining at 14.96 percent for two
This week's dip in rates was minor. However, it's significant in
that it marks just the third time in 33 weeks that average rates
Wells Fargo spurred this week's rate change by lowering the APR
on the Wells Fargo Cash Back College Visa Card. Previously, the
card featured an APR range of 12.15 percent to 21.99 percent. It
now features a slightly lower range of 11.15 percent to 21.15
Wells Fargo spokeswoman Natalie Brown confirmed this week's rate
change and said that the issuer was simply adjusting to market
Cardholders continue to be frugal with credit
Wells Fargo's Brown didn't elaborate on any particular market
condition prompting the bank to cut the rate on its student card.
However, card issuers are facing increasingly favorable conditions
as they head into the second quarter of 2013.
Credit card holders have been steadily paying down the debt they
owe for the past several years and even paid a record number of
bills on time in the third quarter of 2012, according to the
American Bankers Association's most recent
Consumer Credit Delinquency Bulletin
. Bank card delinquencies -- meaning, the number of late payments
that consumers make by 30 days or more -- fell to their lowest
levels since 1994, according to the bulletin, underscoring the fact
that consumers are still extra cautious with their cards.
Late payments on credit cards did increase slightly in December,
according to the consumer reporting company TransUnion's
quarterly trends data
, released Feb. 20. However, experts say that card delinquencies
were already so low by the summer of 2012 that it was inevitable
that they would rise again at some point.
Average credit card balances per borrower also rose slightly in
the fourth quarter of 2012, according to TransUnion, from $4,966 in
the third quarter of 2012 to $5,122 in the fourth quarter.
Though balances ticked up over the past three months, they're
still lower than they were a year ago when they averaged
$5,204, say TransUnion analysts.
The lower balances may mean that holiday shoppers were slightly
more frugal this year with the amount of debt they put on their
cards. Research from the Federal Reserve also showed that consumer
credit card balances fell in the last month of the year.
December's drop in debt was unexpected since consumers typically
finance much of their holiday shopping with their cards.
"The fourth quarter traditionally results in higher credit card
balances and delinquencies, much of it to do with the holiday
shopping season," said Ezra Becker, vice president of research and
consulting at TransUnion in a statement. "Though serious
delinquencies have risen seven basis points in the last year,
average credit card debt has actually dropped, which is a sign that
consumers continue to manage their credit well."
Compared to previous years, however, "both credit card
delinquencies and balances are below historic norms," Becker also
Experts say that the historically low number of late payments in
recent months and the relatively modest credit card balances are
signs that more consumers have learned to use credit responsibly --
and are unlikely to make the same mistakes they did before the
recession any time soon.
"Consumers continue to value their credit card relationships and
are diligent about paying off their balances in a timely fashion,"
said Becker in a statement. "This is a positive sign as more
and more subprime borrowers have either entered or re-entered the
credit card market."
Fed: Banks remain reluctant to ease terms on new