Interest rates on new credit card offers held steady for the
third consecutive week, according to the CreditCards.com Weekly
Credit Card Rate Report.
The national average annual percentage rate (APR) on new card
offers remained fixed at 14.92 percent Wednesday.
This is the 16th time this year that credit card interest rates
have stayed flat. Issuers also refrained from changing promotional
balance transfer offers and promotional APRs.
As a result, credit card applicants are likely to see the same
offer today that they would have seen a week ago -- or even several
weeks ago. After a significant amount of activity early in the
year, issuers have left promotional terms on new credit cards alone
for much of the second quarter.
For example, since the beginning of April, only 11 of the 100
cards that CreditCards.com tracks have featured new promotional
balance transfer offers or new short-term APRs.
The promotional offer changes have cut both ways: Some cards now
feature longer balance transfer and introductory periods, other
offers have been tightened considerably, with significantly shorter
New cardholders are also contending with bigger interest
payments. Average APRs have remained near record-highs for most of
the year, becoming the norm for 2012. As a result, new borrowers
are paying significantly more to carry a balance than they did a
year ago when average rates were lower.
For example, a cardholder who borrows $5,000 on a credit card
today and pays $100 monthly at 14.92 percent interest will have to
pay $2,867 in total interest to pay off the balance. That's $62
more than would have been required at this time last year, when
average APRs clocked in at 14.75 percent. (Calculator: How long
will it take to pay off your credit card balance?)
Bigger incomes for some
The good news is that some borrowers have slightly fatter wallets
than they did last year, making it easier to pay their bills.
Personal income growth rose by 0.8 percent in the first quarter
of 2012, according to the Bureau of Economic Analysis. That's twice
the growth that workers saw during the period last year.
The growth in pay wasn't evenly distributed, however. Health
care professionals, construction workers and people who work in the
hospitality industry saw the biggest boosts in pay; people who work
in real estate saw their earnings decline. Information workers and
those who work in the utilities industry also experienced slower
income growth in the first quarter of the year.
Meanwhile, consumers living in Northern states were more likely
to get a raise this year than those living in the South. For
example, workers in Montana, Washington, North Dakota, Nebraska,
Indiana, Kentucky, New York, Massachusetts and Vermont saw the
biggest growth in earning power early in the year. However, workers
in Nevada, Arizona, New Mexico, Oklahoma, Arkansas, Louisiana,
Alabama and West Virginia, sustained the lowest amount of growth.
Workers in Kansas and Mississippi saw their incomes decline.
Consumers slightly more optimistic about the economy,
pessimistic about incomes
Despite the uptick in income for some consumers, many still think
they're unlikely to get a raise any time soon. Consumer confidence
fell for the fourth consecutive month in June, according to the
Conference Board's Consumer Confidence Index.
Consumers were slightly more upbeat about the overall strength
of the economy. Their low expectations of pay raises could cause
them to think twice about spending on new goods and
"Income expectation, which had improved last month, declined in
June," said the Conference Board's Lynn Franco in a statement. "If
this trend continues, spending may be restrained in the