Interest rates on new credit card offers remained flat for the
third straight week, according to the CreditCards.com Weekly Credit
Card Rate Report.
The national average annual percentage rate (APR) on new card
offers remained at 14.97 percent Wednesday. This week marks the
21st time this year that average interest rates haven't moved. The
last time average rates changed by close to a full percentage point
from one week to the next was in January 2010.
The lack of APR activity does not in any way reflect a lack of
credit card use, however. A new report from credit bureau
TransUnion shows that while card delinquencies have hit an 18-year
low, credit card debt per borrower grew about 6 percent in the
second quarter compared to a year ago. The average card debt per
borrower, according to TransUnion, is $4,971.
Issuers are also dispensing more cards to consumers -- and not
just to those with prime credit. The number of new cards issued
rose 4 percent from the second quarter of 2011, and 26.1 percent of
those cards were issued to subprime borrowers (people with FICO
scores below 700), according to TransUnion.
Judging from this week's Department of Commerce report on retail
sales, consumers may be using their new cards to head to the malls,
as retail sales reversed a downward trend in July. After declining
in April, May and June, sales rose 0.8 percent last month.
In trying to explain the increase in sales, analysts are
pointing to the extremely hot summer where people are escaping the
heat in air-conditioned stores to early back-to-school shopping and
a slowly improving housing market. Home Depot, for example, saw a
12 percent increase in the retailer's earnings in the second
The silver lining to all this spending? Even though we seem to
loosening our hold on our wallets a bit, the personal savings rate
for June rose to 4.40 percent after a year of decline. While still
not enough to brag about, it's a far cry from the 3.2 percent low
recorded in November 2011.