WASHINGTON, April 17, 2013 /PRNewswire-iReach/ — Industry competition and consumer preferences have sparked a resurgence for 0% credit card offers and initial rewards bonuses, while putting downward pressure on certain pesky fees. However, whether or not a given consumer is able to benefit from such trends depends on their credit standing, as you’ll see in more detail below.
“While U.S. consumers have thus far proven unable to put our debt-dependent lifestyles behind us, the state of the credit card landscape does offer reason for optimism,” said Odysseas Papadimitriou, founder and CEO of CardHub.com. For starters, the value of 0% credit card offers and initial rewards bonuses is once again trending upward, offering people with excellent credit the chance to garner hundreds of dollars in savings simply by choosing the right plastic. In addition, credit card companies have been encouragingly receptive to the desires of consumers, not only boosting initial perks, but also lowering foreign transactions fees as consumer awareness of such charges has increased. Delinquency and charge-off rates are also down relative to previous years, indicating the economic recovery has helped keep people from experiencing serious financial difficulties. Nevertheless, these positive trends will undoubtedly be short-lived if we continue adding to the nearly $833.8 billion we currently owe to creditors. In fact, CardHub projections indicate that if current credit card debt levels rise by as little as 15-20%, widespread consumer defaults could result.”
Introductory Interest Rates
— The average 0% APR for new purchases remains in effect for 10.13 months (4.54% longer than last year) — The average 0% APR for balance transfers remains in effect for 10.29 months (2.18% longer than last year)
Regular Interest Rates
The average interest rates for different market segments are:
— Excellent Credit: 12.79% (-1.69% from last quarter) — Good Credit: 17.07% (-0.99%) — Fair Credit: 20.17% (+3.01%) — Secured Credit Cards: 18.23% (+1.73%) — Student Credit Cards: 16.56% (-0.3%) — Business Credit Cards: 15.3% (-0.52%)
Initial Rewards Bonuses
— Cash back initial rewards bonuses range in value from $10 to $200, with an average of $76.81 (33.77% more than last year) — Initial rewards bonuses dispersed in the form of points or miles range from 500 to 85,000 points/miles, with an average of 11,446 (13.89% more than last year)
— The average cash back credit card offers 0.99% per $1 spent (2.06% more than last quarter) — The average points/miles credit card offers 1.13 points/miles per $1 spent (2.73% more than last year)
The following reflects averages for the most common credit card fees:
— Cash Advance Fee: $10.90 (22.61% higher than last year) — Foreign Transaction Fee: 2.24% (5.88% lower than last year) — Balance Transfer Fee: 2.8% (3.51% lower than last year)
Debt & Delinquency
— The average credit card balance is $6,980 (-0.40% from last year) — The delinquency rate is 2.78% (-16.27% from last year) — The charge-off rate is 3.86% (-14.79% from last year) — The average penalty APR is 28.07% (-1.61% from last year)
The most common types of complaints made to the Consumer Financial Protection Bureau during the first quarter of 2013 are categorized as follows:
— Billing: 20.1% — Credit Reporting: 10.4% — APR or Interest Rate: 10.3%
The following categories experienced the most fluctuation in terms of number of complaints made in Q1 2013 vs. Q4 2012:
— Credit Determination/Credit Line: 92.3% increase — Payoff Process: 39% decrease — APR/Interest Rate: 35.9% decrease
Source: The majority of the information contained in CardHub’s Q1 2013 Credit Card Landscape Report comes from CardHub’s database of more than 1,000 credit card offers, with supplemental information coming from the Federal Reserve & Consumer Financial Protection Bureau.
CardHub.com is a leading credit card comparison and information website with the overarching goal of helping consumers make better financial decisions. CardHub strives to accomplish this goal by offering tools that connect individuals with the best credit cards for their needs, providing robust educational resources aimed at improving financial literacy, and conducting leading industry research in order to promote comprehension of market trends. CardHub was founded in 2008 by Odysseas Papadimitriou, a long-time Capital One senior director who saw a personal finance knowledge gap among consumers and dedicated himself to consumer advocacy.
Liana Arnold, CardHub, 703 722 0601 ext. 201, [email protected]
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