TheStreet (Nasdaq: TST ( TheStreet)), a leading digital financial media company, announced today that the Credit Power Index (TM) produced by its RateWatch division showed a fifth straight month of improvement in the interest rate climate for consumers in 2011.

The index, which gauges the overall consumer interest rate climate by measuring the gap between deposit rates and borrowing rates, declined by 29 basis points in May, the fifth month in a row that overall interest rates improved for consumers in 2011. The Credit Power Index now sits at 22.69, down 105 basis points since December 2010.

“The main theme we see in the May data is that consumers are benefitting from declining borrowing rates, which are more than offsetting the continued weakness in deposit rates,” said Rachelle Zorn, general manager of RateWatch.

Loan rates dropped by 37 basis points, compared to a decline of only 8 basis points for deposit instruments.

The Credit Power Index works by comparing CD rates at four terms (12, 36, 48 and 60 months) with loan products at the same terms (personal unsecured loans, home equity lines of credit, auto loans and adjustable-rate mortgages). A lower index indicates a favorable interest rate climate for consumers, and the national index has fallen in fits and starts after spiking during the recession.

(See our graphic for the full explanation of how the Credit Power Index is calculated. http://www.mainstreet.com/article/moneyinvesting/credit/debt/how-credit-power-index-works)

A rapid decline in interest rates for loans – outstripping falling deposit rates – is giving U.S. consumers an edge over banks when it comes to financing a car or home, according to the Credit Power Index produced by TheStreet’s RateWatch division.

The decline in borrowing rates was led by five-year adjustable rate mortgages, with average national interest rates dropping 17 basis points to settle at a rock bottom 3.55%, according to data from RateWatch, which tracks rates at more than 90,000 financial locations across the U.S.

According to RateWatch, the average rate on a 12-month certificate of deposit finally hit 0.5% in May. That’s a benchmark it had been flirting with for months and it marks a decline of nearly 3.5 percentage points in the average rate in the past four years. Longer-term CDs likewise continued their decline, with the average 36-month CD now paying out just 1.08%.

Some regions have shown more improvement in the Credit Power Index than others during the past few months. In particular, the West, which traditionally has the worst consumer interest rates in the country, improved by leaps and bounds for the second month in a row. The Credit Power Index for the region has now dropped 179 basis points over a span of just two months, bringing its rates more in line with the rest of the country. While it’s still the worst area of the country for deposits (12-month CDs fetch just 0.39%), it has joined the rest of the country in offering attractive rates to consumers seeking a loan.

NOTE TO EDITORS: The full Credit Power Index database is available at www.mainstreet.com/credit-power .

About RateWatch

One of the nation's largest providers of accurate, up-to-date rate information, this web site, www.rate-watch.com, is relied upon by countless banks and credit unions, providing key data so they can set competitive rates.

About MainStreet

MainStreet provides personal finance tips and advice to help consumers grow their wealth and enhance their lives. By combining lifestyle news, commentary and financial resources, MainStreet is an engaging and fun site "where life and money intersect."

About TheStreet

TheStreet, Inc. is a leading digital financial media company that distributes its content through online, social media, tablet and mobile channels. The Company's network of brands include: TheStreet, RealMoney Silver, Stockpickr, Action Alerts PLUS, Options Profits, ETF Profits, MainStreet and Rate-Watch. For more information on TheStreet's business, visit www.t.st. For financial and business news, actionable trading ideas, stock quotes and more, visit TheStreet.com via your web browser, follow TheStreet on Facebook and Twitter, visit TheStreet.mobi from your mobile device and access TheStreet through all major tablet platforms.

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