Credit card interest rates unchanged despite move from Chase

A Chase interest rate tweak plus a Federal Reserve announcement still added up to zero movement in the average APR on new credit card offers this week.

According to the Weekly Rate Report, the national average interest rate on new card offers held steady at 14.63 percent this week. It's the fifth straight week that annual percentage rates (APRs) have either declined or remained flat, with rates not increasing since early November.

Things weren't entirely uneventful, however. Chase began offering a rate of 13.24 percent on its Sapphirecard in addition to its previous 12.24 percent rate. However, because CreditCards.comonly uses the lowest available rate in its calculations, that change had noimpact on the national average APR. Those who apply for the Chase Sapphire card will find that their actual rate depends on their credit score.  

The Federal Reserve, meanwhile, left its lending rate at recordlows on Tuesday, as the central bank continues to wait for the economy recovery to gain speed. The Fed said that although data shows an ongoing rebound, unemployment still remains high. Joblessness  -- combined with other factors -- is weighing down consumer spending. "Household spending is increasing at a moderate pace, but remains constrained by high unemployment, modest income growth, lower housing wealth and tight credit," the Fed said in its statement

For those reasons, analysts don't expect the Fed to raise the federal funds rate before 2012. That's likely good news for consumers. Why is that? An eventual increase in the fed funds rate would result in a higher prime rate, to which most credit cards are indexed -- meaning that when the Fed does increase rates, millions of Americans will see their credit card APRs increase almost immediately.

Even before the Fed takes action, existing cardholders will incur higher APRs if they commit a borrowing error, such as submitting a late payment, or if the bank decides to raise rates. The Credit CARD Act of 2009, however, requires lenders to provide 45 days' advance warning about any rate hikes that aren't the result of cardholders' mistakes. There is an exception for rate changes that result from Fed policy adjustments.

Amid the current lull in rate hikes, cardholders appear to be filling their shopping carts. Data released Tuesday showed that retail sales increased in November for the fifth straight month, driven by a 2.8 percent surge in department store sales -- the biggest gain in two years. 

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