Banks know consumers are angry at them for doing things like charging $5 a month for a checking account (not naming any names, but rhymes with Shank of Clamerica). So in order to lure back your business, banks are offering lower rates on their credit cards.
In a “We’ll Get Your Money One Way Or Another” move, SmartMoney reports that as consumers are feeling a bit confident right now and want to spend, it’s a good time for banks to drop rates. The Federal Reserve says interest rates fell to 12.92% in the second quarter of 2011, from 13.48% in the first.
Consumer credit rose 66% in the second quarter, Odysseas Papadimitriou, the chief executive of CardHub.com told SmartMoney, adding:
“Consumers have not learnt their lesson,” says Papadimitriou says. “Expect to see that retail sales bonanza earlier rather than later.”
Banks want you to shop while you’re feeling good, and that includes picking up a shiny new car. Most cars are bought with loans, and banks are giving them out at lower rates as well, boosting auto sales to $13 million September from $12.6 in August.
Banks Tempt Consumers With Lower Rates [SmartMoney]