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Rate survey: Credit card interest rates remain stuck at 14.95 percent
Interest rates on new credit card offers stayed put this week, according to the CreditCards.com Weekly Credit Card Rate Report.
None of the cards tracked by CreditCards.com advertised new interest rates this week. As a result, the national average annual percentage rate (APR) remained at 14.95 percent Wednesday for the sixth consecutive week.
Issuers left promotional offers alone as well. Short-term balance transfer rates and introductory APRs remained the same for each of the 100 representative cards in the CreditCards.com database.
Changes to promotional offers have become rare in recent months. In previous years, issuers frequently tested longer-term promotions, such as 0 percent balance transfer offers that lasted as long as two years.
These days, the vast majority of promotional balance transfer offers tracked by CreditCards.com last between 12 and 15 months. Few issuers have extended their offers past the 15-month mark.
Issuers' reluctance to test new offers more aggressively may stem, in part, from weak demand for new cards. Consumer demand for new credit was lackluster through much of 2012, according to Federal Reserve research.
Consumer confidence nosedives in March
Despite ongoing reluctance to sign up for more credit, consumers did begin spending more freely on retail and other services in the first few months of 2013, according to the Commerce Department. That could change, however, if renewed pessimism about the economy begins to affect how eager consumers are to spend their extra cash.
Consumer confidence plummeted in March, according to figures released March 26 by the Conference Board, after shooting up in February for the first time in months.
"Consumer confidence fell sharply in March, following February's uptick," said the Conference Board's Lyn Franco in a statement . "This month's retreat was driven primarily by a sharp decline in expectations, although consumers were also more pessimistic in their assessment of current conditions."
Widespread uncertainty over the economic impact of deep cuts in federal spending, known as the sequester, is largely to blame for consumers' soured outlook, said Franco. The cuts took effect March 1 and, until then, experts widely predicted that Congress would come to a last-minute agreement that would stop the cuts from taking effect.
Legislators proved experts wrong, however, and have yet to signal to the public that they are serious about coming to an agreement any time soon.
"As a result, consumers are less confident," said Franco.
Because Congress shows little willingness to find a way out of the self-imposed sequester before the next round of budget talks that are scheduled for the summer, consumers and businesses are being forced to prepare for the unknown financial consequences that could result from the cuts. The across-the-board spending cuts affect a wide range of industries, including defense, biomedical and science research and education.
According to the Conference Board, consumers are now less hopeful that business conditions and the labor market will improve by the end of the summer, or that they will get a raise any time soon.
More consumers also expect that business conditions will get worse before they get better and a larger number than before think the number of open jobs could shrink in the coming months.
It's unknown how long consumers will remain grumpy about the country's economic outlook, particularly since the direction legislators take this year is still uncertain. However, consumers do have some reason to be at least somewhat more upbeat going forward.
Despite the layoffs and furloughs that will result from the federal sequester, the overall labor market is steadily improving. The U.S. economy added 236,000 new jobs in February, according to the Labor Department , pushing the unemployment rate down to 7.7 percent -- its lowest level since 2008.
See related: Fed stays the course on interest rates