The average rate on new card offers inched up this week for the
first time in more than a month, according to the CreditCards.com
Weekly Credit Card Rate Report.
The national average annual percentage rate rose to 15 percent
Wednesday after remaining at 14.99 percent for five weeks.
The average rate on new card offers is currently at its highest
point in more than seven months. The last time the average rate
rose above 14.99 percent was in November 2014.
The national retail chain Gap spurred this week's rate increase
by bumping the APR on the Gap Visa card from 23.99 percent to 24.99
Gap also announced on June 15 that it plans to close around 175
Gap stores across North America and lay off approximately 250
corporate employees. As a result, consumers who apply for a Gap
card will have fewer stores to choose from.
Consumer spending estimate up
Retailers such as Gap have struggled to attract big spenders
through much of 2015. But a new analysis from the Commerce
Department shows consumers spent significantly more in the first
quarter than previously estimated, which could mean consumers are
less cautious about their spending than analysts thought.
released June 24, consumer spending increased by 2.1 percent in the
first quarter -- up from a previously estimated increase of 1.8
percent. In addition, the Commerce Department found, the economy
contracted by just 0.2 percent between January and March -- down
from a previous estimate of 0.7 percent.
from the Federal Reserve showed that consumers are less cautious
about the amount of debt they carry on their cards, which could
indicate that cardholders are feeling more confident about their
ability to spend. According to the Fed, card balances increased
significantly in March and April after declining during the first
two months of the year.
from the credit rating agency Experian also showed that balances on
bank-issued cards expanded by 6 percent in the first quarter of
2015 compared to the previous year -- thanks in part to an increase
in the number of cardholders willing to use the cards already in
According to research released earlier this month by the
American Bankers Association, cardholders are swiping their cards
more often and leaving fewer cards unused. The number of dormant
card accounts fell significantly in the fourth quarter of 2014,
indicating that consumers are becoming more comfortable with using
credit as the economy improves. "More active credit card use
suggests that consumers' confidence in the economy is on the rise,"
said the American Bankers Association's Molly Wilkinson in a
Consumers still aren't using their cards nearly as often as they
did before the recession, however. Research from the newsletter
service, The Nilson Report, shows that credit card debt now makes
up a much smaller proportion of total consumer borrowing. By the
end of 2014, outstanding card debt accounted for just 26.6 percent
of all consumer debt -- down from 36.8 percent in 2008.
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