Average rates on new credit card offers remained locked at 15.01
percent Wednesday for the seventh consecutive week, according to
the CreditCards.com Weekly Credit Card Rate Report.
None of the cards tracked by CreditCards.com advertised new
interest rates. Promotional terms, including 0 percent APRs and
balance transfers, also remained unchanged.
These days, changes to credit card terms are relatively rare.
Interest rates are especially sticky. The national average APR, for
example, has changed just twice since Jan. 1.
Credit card issuers are more likely to change promotional terms.
But even those changes are rare.
Since Jan. 1, for example, just four issuers have revised
promotional terms of their cards. Two issuers shortened the amount
of time cardholders could take advantage of an offer. One issuer
expanded a promotional offer, and one issuer introduced a temporary
offer, then canceled it.
Credit card spending picks up
After years of cautious charging, credit card holders are finally
starting to warm back up to using their cards, according to new
research from the American Bankers Association (ABA). But they're
not letting that debt sit for long.
According to the ABA's latest
Credit Card Market Monitor
, credit card use rose by 3.4 percent, year-over-year, in the third
quarter of 2013. But the average credit card statement showed a
significantly smaller balance -- indicating to analysts that many
consumers are quickly paying off their charges.
"This suggests that consumers aren't just using their credit
cards more -- they are also more likely to pay off or pay down
their monthly balance," said the ABA's Kenneth J. Clayton in a
. "As a result, the amount consumers are paying in interest as a
share of their outstanding credit card balance declined for the
13th consecutive quarter."
Consumers are also charging more discretionary purchases to
their cards, which indicates that consumers are feeling more
relaxed about what they buy.
According to the report, released April 2, consumers spent
significantly more on airline tickets, recreation and travel in the
third quarter of 2013, compared to the year before.
In addition, consumers also spent slightly more on necessities
such as food and education. But the increases in essential
purchases were generally much more modest, compared to the growth
in nonessential purchases.
"We're seeing a more confident consumer who is willing to spend
more money on nonessentials because they're less concerned with the
direction of the economy and their ability to keep debt at
manageable levels," said Clayton in the release. "Whether this
trend will continue remains to be seen," he said.
Credit card lending remains relatively tight
Credit card issuers, meanwhile, are still being choosy about who
can have a card - and who gets to have a bigger credit limit,
according to the same report.
Consumers with pristine scores, for example, (known in credit
card lending circles as super-prime consumers) are being rewarded
with more cards and bigger credit limits, according to the American
Bankers Association. But consumers with imperfect scores aren't
sharing in the rewards.
Overall, credit lines rose by 4.6 percent in the third
quarter of 2013, compared to the previous year. However, credit
lines for consumers with good but imperfect credit scores and
damaged credit scores fell in 2013 for the fifth straight year.
Consumers with imperfect credit currently make up a much smaller
percentage of consumers who have cards. In the third quarter of
2013, for example, consumers with less-than-perfect credit scores
claimed just 32 percent of all credit lines, according to the
American Bankers' Association. In 2008, by contrast, approximately
42 percent of all credit lines belonged to consumers with imperfect
"Despite slowly easing credit standards and an improving
economy, we continue to see a dramatic shift toward lower-risk
accounts," said Clayton. "A more conservative approach by lenders,
combined with regulatory constraints that make it more difficult to
manage risk, has clearly played a role."