TheStreet, Inc. (Nasdaq: TST), a leading digital media company, released the August Credit Power Index (TM) showing that the consumer interest climate worsened for the first time this year after seven straight months of improvement.

A sharp decline in certificate of deposit rates below already-historic lows reversed the positive consumer rate trend as measured by the Credit Power Index, a metric produced jointly by TheStreet’s Rate-Watch and MainStreet divisions to measure the “squeeze” on consumers between the interest rates paid on deposits versus the interest rates charged on loans.

“The national Credit Power Index may have hit bottom last month,” says Rate-Watch General Manager Rachelle Zorn, suggesting that the great consumer environment at banks may be coming to a close.

At the end of August, interest paid on 12-month CDs had fallen four basis points to settle at 0.43%, 36-month CDs dropped 12 basis points to less than 1%, and 48- and 60-month CDs saw similar big drops, according to Rate-Watch data used to compile the Credit Power Index. Rate-Watch maintains the world’s largest database of rates from more than 90,000 financial locations across the U.S.

The downturn in deposit rates meant that the Credit Power Index , which tracks the overall interest rate climate for consumers, went up for the first time since December 2010. The index is calculated by subtracting the interest paid on CDs at four terms from the rates charged on four loan products at corresponding terms. The lower the index, the more consumer-friendly the rate climate is. (See MainStreet’s infographic for details on how the index is calculated.)

The good news revealed by the August index is that loan rates also fell, though not as steeply as deposit rates. The two short-term loan products in the Credit Power Index -- personal unsecured loans and 36-month home equity loans -- fell eight basis points each for the month of August, the latter settling at 6.54%. Meanwhile, 48-month auto loans and 60-month adjustable-rate mortgages fell only slightly, and now stand at 4.58% and 3.14%, respectively.

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