2014 Credit Card Landscape Report

Card Hub Study 2014 Credit Card Landscape  
CardHub’s quarterly credit card landscape reports take the pulse of interest rates, rewards and fees across the credit card market. This analysis unearths market trends of great significance to consumer sentiment, banking industry operations, and our overall economic stability and can be leveraged by consumers and industry professionals alike.

 
 

Q1 Main Findings

Interest Rates

  • Credit card interest rates were higher across the board during the first three months of 2014 relative to the same period last year – rising an average of 2.12% on a year-over-year basis.
  • Secured credit cards and credit cards for people with fair were the only segments that saw rates fall relative to the fourth quarter of 2013.

Initial Perks (0% APRs & Rewards Bonuses)

  • In line with CardHub’s Q4 2013 projection, the length of the average 0% balance transfer offer increased during Q1 2014, further indicating that balance transfers are a seasonal attraction that provide the best deals during the first and fourth quarters of the year. As a result, introductory periods on balance transfers are expected to shorten over the next six months.
  • Initial rewards bonuses – both cash and points/miles based – were more lucrative in the first quarter of 2014 than in Q1 2013, with points and miles displaying impressive 10% year-over-year growth, perhaps reflecting consumer interest in spring and summer travel. In fact, points and miles-based rewards bonuses are at an all-time high in terms of value.

Ongoing Rewards

  • Ongoing rewards earning rates for both cash back and points/miles credit cards dipped slightly during Q1, further reinforcing the notion of ongoing rewards stabilization after the trend was highlighted in our Q4 2013 Landscape Report.

Fees

  • The average cash advance fee increased more than 10% in Q1, rising to $12.31. Issuers have displayed the ability to increase cash advance fees with impunity, as consumers don’t tend to factor such costs into their comparison shopping. These dynamics are reminiscent of when past-due and over-limit fees were allowed to get out of hand prior to the CARD Act’s implementation.

Consumer Complaints

  • The most common and fastest-growing type of consumer complaint should come as no surprise following the security breaches at Target and Neiman Marcus as well as the busy Christmas shopping season: fraud. According to the Consumer Financial Protection Bureau, the number of complaints regarding Identity theft / Fraud / Embezzlement increased roughly 61% in Q1 2014, relative to the same time the year before.
  • Meanwhile, complaints regarding credit card debt protection and the debt payoff process fell 12% and 34%, respectively.

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Q2 Main Findings

Interest Rates

  • Overall, interest rates present a 1.18% average ascending trend across all credit scores and user segments compared with the same quarter in 2013.
  • The biggest rise in interest rates inexplicably involves secured credit cards, which have increased by 2.77% compared with the previous quarter and 3.49% compared with the previous year. Banks are most likely exploiting the fact that bad-credit consumers are happy just to get approved for a credit card and do not take the time to compare options.

Initial Perks (0% APRs & Rewards Bonuses)

  • As predicted by CardHub in Q1, introductory periods on balance transfers trended downward, with a 1.67% drop compared with the previous quarter. This trend is expected to continue until the end of Q3 2014.
  • Miles and points rewards cards continue to improve, displaying a 0.88% increase in ongoing rewards and a 5.32% increase in initial bonus rewards compared with Q1. Meanwhile, ongoing rewards for cash back have stagnated and the initial bonus reduced by 0.69%. This is most likely due to the fact that issuers want to leverage as many rewards limitations as possible.

Fees

  • Credit card issuers continue to impulse international spending by reducing the average foreign transaction fee, which has decreased by 2.25% compared with the same quarter in 2013.

Consumer Complaints

  • The highest number of consumer credit card complaints recorded in the second quarter of 2014 is connected to billing issues, comprising 26.33% of total complaints, even though the number of these types of complaints dropped by 18.44% compared to the previous quarter.
  • Complaints related to rewards and fees increased significantly in Q2, with 45.02% and 23.08% increases, respectively.

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Data & Graphs

Interest Rate Landscape

Q1 2014
(vs. last yr)
Q2 2014
(vs. last yr)
Q2 vs. Q1 Change
Excellent Credit 12.86%
(0.55%)
12.88%
(0.63%)
0.16%
Good Credit 17.35%
(1.64%)
17.29%
(0.41%)
-0.35%
Fair Credit 21.07%
(4.46%)
21.07%
(2.03%)
0.00%
Secured Credit Cards 18.78%
(3.02%)
19.30%
(3.49%)
2.77%
Student Credit Cards 16.76%
(1.21%)
16.66%
(0.42%)
-0.60%
Business Credit Cards 15.58%
(1.83%)
15.51%
(0.13%)
-0.45%

 

Interest Rate Landscape

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Balance Transfer Landscape

Q1 2014
(vs. last yr)
Q2 2014
(vs. last yr)
Q2 vs. Q1 Change
Average Length of 0% APR Intro Period (in months) 10.75
(4.47%)
10.57
(6.34%)
-1.67%
Range of 0% APR Intro Periods (in months) 6-24 months 6-24 months N/A
Average Regular APR for Cards that have 0% Intro APR on Balance Transfers 16.17%
(0.43%)
16.42%
(0.86%)
1.55%
Range of Regular APRs for Cards that have 0% Intro APR on Balance Transfers 8.15%-25.99% 8.15% – 25.99% N/A
Average Balance Transfer Fee for Cards with 0% Intro APR on Balance Transfers 3.05%
(0.99%)
3.04%
(-0.33%)
-0.33%

New Purchase Landscape

Q1 2014
(vs. last yr)
Q2 2014
(vs. last yr)
Q2 vs. Q1 Change
Average Length of 0% Intro Period (in months) 10.02
(-1.09%)
10
(-1.67%)
-0.20%
Range of 0% APR Intro Periods (in months) 6-18 months 6-48 months N/A
Average Regular APR for Cards that have 0% Intro APR on New Purchases 16.98%
(2.6%)
16.89%
(0.30%)
-0.53%
Range of regular APRs for Cards that have 0% Intro APR on Purchases 7.50%-26.99% 7.5% -26.99% N/A

 

0% Introductory Periods

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Rewards Landscape

Cash Back

Q1 2014
(vs. last yr)
Q2 2014
(vs. last yr)
Q2 vs. Q1 Change
Average Base Earn Rate 0.95
(-4.04%)
0.95
(-4.04%)
0.00%
Range of Base Earn Rate 0.25%-2% 0.25% – 2% N/A
Average Initial Bonus $88.45
(15.15%)
$87.84
(17.59%)
-0.69%
Range of Initial Bonus $10-$250 $10 – $250 N/A

Miles or Points

Q1 2014
(vs. last yr)
Q2 2014
(vs. last yr)
Q2 vs. Q1 Change
Average Base Earn Rate (in miles or points) 1.14
(0.88%)
1.15
(0.88%)
0.88%
Range of Base Earn Rate 0.5-5 miles/points 0.5 – 5 miles / points N/A
Average Initial Bonus (in miles or points) 12,595
(10.04%)
13,266
(7.14%)
5.32%
Range of Initial Bonus 25-85,000 miles/points 15 – 85,000 miles / points N/A

 

Base Earn Rates

 

Initial Bonus Points/Miles

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Fees

Q1 2014 (vs. last yr) Q2 2014 (vs. last yr) Q2 vs. Q1 Change
Average Maximum Late Fee $33.64
(0.54%)
$34.16
(2.06%)
1.55%
Average Foreign Transaction Fee 2.21%
(-1.34%)
2.17%
(-2.25%)
-1.81%
Foreign Transaction Fee Range 0% – 3% 0% – 3% N/A
Average Balance Transfer Fee for Cards with Intro Balance Transfer APR 2.97%
(6.07%)
2.95%
(2.43%)
-0.67%

 

Average Fees

Penalty APRs

Q1 2014
(vs. last yr)
Q2 2014
(vs. last yr)
Q2 vs. Q1 Change
Average 28.01%
(0%)
28.02%
(-0.81%)
0.04%
Range 16.99%-30.24% 16.99% – 30.24% N/A

Cash Advances

Q1 2014
(vs. last yr)
Q2 2014
(vs. last yr)
Q2 vs. Q1 Change
Average APR 22.69%
(0%)
22.73%
(-0.81%)
0.18%
APR Range 6.25%-36.00% 6.25% – 36.00% N/A
Average Cash Advance Fee % 3.92%
(0.77%)
3.90%
(-0.26%)
-0.51%
Average Cash Advance Fee $ amount $12.31
(12.94%)
12.41%
(14.06%)
0.81%

Credit Card Debt

Q4 2013
(vs. last yr)
Q1 2014
(vs. last yr)
Q1 vs. Q4 Change
Accumulation $42.1 billion
(4.93%)
-$32.48 billion
(-0.49%)
-177%
Delinquency Rate* 2.45%
(-11.87%)
2.33%
(-12.73%)
-4.90%
Charge-Off Rate* 3.15%
(-16.6%)
3.32%
(-12.17%)
5.40%

*Not seasonally adjusted

Unemployment

Q1 2014
(vs. last yr)
Q2 2014
(vs. last yr)
Q2 vs. Q1 Change
Unemployment Rate 6.7%
(10.67%)
6.23%
(16.93%)
-7.01%

 

Delinquency, Charge-Off, & Unemployment Rates

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Popular Consumer Complaints (Percentage of All Complaints Filed)

Q1 2014
(vs. last yr)
Q2 2014
(vs. last yr)
Q2 vs. Q1 Change
Billing 32.28%
(43.85%)
26.33%
(8.71%)
-18.44%
APR or interest rate 6.19%
(-6.50%)
6.88%
(6.59%)
11.15%
Identity theft / Fraud / Embezzlement 8.71%
(44.90%)
9.70%
(30.45%)
11.44%
Closing/Cancelling account 6.25%
(1.70%)
7.28%
(0.75%)
16.46%
Credit card protection / Debt protection 3.02%
(-4.32%)
2.78%
(1.76%)
-7.85%
Credit 5.77%
(14.94%)
6.28%
(-10.34%)
8.80%
Payoff process 2.22%
(-38.28%)
2.39%
(-22.37%)
7.42%
Fees 6.75%
(-7.92%)
8.31%
(37.26%)
23.08%
Advertising and marketing 3.49%
(49.19%)
3.34%
(35.85%)
-4.41%
Customer service / Customer relations 4.77%
(39.06%)
4.17%
(40.05%)
-12.43%
Rewards 2.22%
(2.23%)
3.22%
(24.76%)
45.02%
Delinquent account 4.03%
(157.92%)
3.62%
(68.20%)
-10.15%
Q2 2014 Consumer Credit Card Complaints

 

Top 6 Consumer Complaints Over Time

 

Other Years’ Reports

 

This report was compiled using data from the 1000+ credit card offers that CardHub.com monitors on a daily basis. For questions or more information regarding this report, please contact our media department.
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