Interest rates on new credit card offers stood still this week,
according to the CreditCards.com Weekly Credit Card Rate
The national average annual percentage rate (APR) on new card
offers remained at 14.97 percent Wednesday, after climbing the
None of the cards that CreditCards.com tracks changed this week.
That includes changes to promotional balance transfer offers and
introductory purchase rates.
The lack of movement on card offers isn't unusual, however, in
the current card climate. In the past two months, issuers have left
promotional offers -- including short-term interest-free offers on
balance transfers and purchases -- alone for six weeks out of
Issuers have also been reluctant to alter interest rates. In the
past six months, issuers have left rates alone 16 weeks out of 27.
During that time, the national average APR has increased four times
and declined seven.
Issuers also cut back on credit card mailings
The lack of movement comes at a time when issuers have also been
pulling back on mailing new credit card offers to consumers.
Prior to the recession, issuers flooded consumers' mailboxes
with card offers and aggressively sought out new customers with a
wide variety of credit scores. However, in 2009, issuers slashed
the number of card offers they mailed by nearly two-thirds and
primarily concentrated the offers they did send on consumers with
excellent credit, say industry analysts. Since then, credit card
mailings have yet to bounce back to pre-recession levels, according
to data from the market research firm Mintel Comperemedia.
Issuers did ramp up the number of card offers they sent in 2010
and 2011 and even began to send more offers to consumers with lower
credit scores. However, issuers have since cut back significantly,
say analysts at the international financial services firm Credit
Citing research from Mintel Comperemedia, Credit Suisse analysts
say that the number of credit card offers that consumers received
in June is down by 43 percent, compared to the same time last year.
June also marks the fourth month since January that the number of
credit card mailings sent to consumers has declined.
The lower level of credit card mailings in 2012 contrasts
significantly with 2011. Then, issuers sought out new customers
aggressively, mailing out a total of 4.8 billion credit card offers
throughout the year. By contrast, issuers have sent out just 1.5
billion offers in 2012, and analysts at Credit Suisse estimate that
the total number of offers sent out by the end of the year will
total just 3.5 billion.
If analysts' estimates hold out, then the number of credit card
offers mailed in 2012 will be just slightly more than the number of
credit card offers that were mailed in 2010. During that time,
issuers were still just shaking off the effects of the recession
and contending with new financial regulation, including the Credit
CARD Act of 2009. Now, issuers are contending with a series of
banking scandals, a financial crisis in Europe and a painfully slow
U.S. economic recovery.
Despite the sluggish growth in card offers, researchers at
Credit Suisse say that issuers are still actively competing for new
customers. As for the card offers they do mail, issuers are
focusing heavily on rewards cards that don't carry annual fees, say
analysts. "As we have written before, we believe that this is one
of the new features in the current competitive environment, with
three-quarters of all offers focused on rewards, with heavier
rewards components than in the past."
Issuers also continue to send out a high number of credit card
offers with 0 percent balance transfer offers and promotional APRs.
"We expect a high level of these offers to continue as long as
interest rates remain low," added researchers.