Credit card interest rates remain at 14.99 percent

CreditCards.com

Average rates on new credit card offers remained unchanged this week, according to the CreditCards.com Weekly Credit Card Rate Report.

The national average annual percentage rate (APR) remained at 14.99 percent Wednesday, after climbing the previous week for the first time in more than two months.

Most issuers left credit card terms alone this week. The sporting goods store Cabela's lowered the minimum APR on the Cabela's Club Visa from 15.18 percent to 15.17 percent. However, the change to the store card's APR wasn't big enough to dent the national average.

Barclays was also active. For the third time in four weeks, Barclays floated a new promotional offer on the US Airways Premier World MasterCard.

Barclays introduced a 12-month, 0 percent purchase APR to the US Airways card. In addition, Barclays shortened the airline card's interest-free balance transfer offer from 15 months to 12 months.

Cardholders remain wary
Credit card issuers, such as Barclays, are actively testing new offers and sweetening their promotional deals in order to attract more applications and encourage people to spend.

Cardholders, however, are showing little interest in spending heavily on credit and are instead focusing on paying down the balances they already have.

Consumer credit card balances, for example, shrank in July for the second straight month, according to new research from the Federal Reserve. Revolving debt -- which is mostly credit card debt -- fell by 2.6 percent in July after falling by 5.2 percent the previous month.

Cardholders' shrinking balances underscore just how stubborn many consumers have become about keeping their finances in check. Despite slow but steady economic progress -- including the lowest unemployment rate in nearly five years -- many consumers remain exceptionally careful about the amount they're willing to charge.

The good news for issuers is that fewer cardholders are falling behind on payments, according to multiple reports. However, cardholders' ongoing unwillingness to spend, five years after the 2008 financial crisis, is making it hard for card issuers to increase their revenue. It's also helping to drag down the economic recovery, which depends heavily on consumer spending.

According to a report released Aug. 30 by the Commerce Department, consumer spending of all types rose a measly 0.1 percent in July -- well below economists' expectations.

Job market weak, but on the mend
Employers, meanwhile, are gradually increasing the number of jobs they add to the economy. However, they're still not adding nearly as many jobs as economists hoped.

Employers from both the private sector and the public sector, for example, created 169,000 new jobs in August, according to new data from the Labor Department . The unemployment rate, meanwhile, dipped to 7.3 percent -- its lowest level since December 2008.  

Despite those positive figures, economists pointed out that last month's drop in the unemployment rate was due, in part, to large numbers of people giving up on finding work.

The Commerce Department also reported on Friday that the average number of jobs being added to the economy is substantially lower than previously estimated.

According to revised figures released Sept. 6, employers added just 104,000 jobs in July. That's 58,000 less than the number of jobs the Labor Department previously reported.

Meanwhile, in June, employers added approximately 172,000 jobs -- 16,000 fewer jobs than the Labor Department estimated.

A second report, released Sept. 5, showed similar results. According to the payroll company ADP, private sector employers created 176,000 new jobs in August -- slightly more than the total number of jobs that the Labor Department estimated.  

The service sector created most of the new jobs in August, said ADP. Employers that produce tangible goods added just 11,000 jobs last month.

ADP analysts say that the number of jobs created in August is similar to previous months. "The August job gains are in line with the monthly average over the last 12 months," said ADP's Carlos Rodriguez in a statement accompanying the report.

Employers are steadily adding jobs. They're just not adding as many jobs as economists are calling for in order to hasten the economic recovery. 

In the same press release, Mark Zandi, an economist at Moody's Analytics, also noted that outside events that could have caused employers to pause their hiring aren't having as much of an impact as some analysts feared, which is good news for consumers.   

"It is steady as she goes in the job market," said Zandi. "There is little evidence that fiscal austerity and Health Care Reform have had a significant impact on the job market."

See related: CFPB: Consumers' side of credit disputes must be considered

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