The LowCards.com Weekly Credit Card Rate Report January 26, 2012

The LowCards.com Weekly Credit Card Rate report is based on
our Complete Credit Card Index which tracks the advertised rates
of 1060 credit cards in the United States.

Our index showed that the Annual Percentage Rates for credit cards
was 14.17% which was higher than 14.05% from last week.

Here are the averages from the LowCards.com Complete Credit
Card Index for the previous ten weeks:

Jan. 19 14.05%
Jan. 12 14.04
Jan. 5  14.01
Dec. 29 14.00
Dec. 22 14.00
Dec. 15 14.05
Dec. 8  14.17
Dec. 1  14.16
Nov. 22 14.12
Nov. 17  14.14

The average cash advance rate for this week was 21.58% which was
higher than 21.47% from last week.

The credit cards with the lowest interest rates in the nation this week are:

1. 5.00% Speedway SuperAmerica Credit Card
2. 5.15% First Tennessee Platinum Premier Visa
3. 6.25% Lake Michigan Credit Union Platinum Visa

The LowCards.com credit card rate report is compiled weekly using data from
1060 credit cards which are tracked on the LowCards.com website. The Complete Credit Card
index is available here:

http://www.lowcards.com/CreditCardIndex.aspx

Rates may occasionally change due to the number of cards
being tracked.

About LowCards.com: LowCards.com ( http://www.lowcards.com )
simplifies the confusion of shopping for credit cards. It is
a free, independent website that helps consumers easily
compare credit cards in a variety of categories such as
lowest rates, rewards, rebates, balance transfers and lowest
introductory rates. It also gives an unbiased ranking and
review for each card.

Even though credit card issuers have been providing significant incentives for consumers to use their cards over the past year, consumers are once again turning to cash to pay for small purchases.

According to a new Javelin study released on Tuesday, 79% of consumers used cash to make a purchase over the past seven days compared to 65% who used a credit or debit card.

The increased use of cash may be a side effect of the interchange fee regulations that capped these swipe fees for debit card purchases. While a smaller fee was good news for most retailers, it provided a cruel twist for the smaller merchants. Business owners specializing in lower-priced items like coffee, candy and ice cream now have to pay a higher fee when their customers use debit cards for transactions because many card companies discontinued the discounts that were often given merchants for small transactions. Issuers say the higher swipe fee previously paid by retailers subsidized the discount for smaller transactions.

Many consumers who once used a debit card for small purchases are learning to carry cash to cover these transactions, or pay a fee to cover the store’s cost of processing the debit card. The debit card fee regulations are costing some retailers more money. We are certainly not seeing much lowering of prices that retailers were promising when the swipe fee regulations were being discussed.

While consumers are turning to cash, most credit card issuers continue to provide fairly lucrative incentives for consumers to use their cards. The Chase Freedom card offers a $200 cash back bonus once a new cardholder spends $500 during the first three months. Capital One Cash offers 1% cash back on all purchases plus a 50% cash back bonus, in addition to a $100 bonus for spending $500 on the card during the first 90 days.

Truth about credit cards: They’re not always evil

Credit cards are not evil. There, I said it. But that’s not how some people see them. They see credit cards as the devils that tempt them to spend more than they should. Debit cards are the angels in their wallet who keep them from piling up mountains of high-interest debt.
I can understand that. Credit counselors say people who can only buy what they can pay for on the spot are more likely to spend less than those who charge it.

But let’s be honest — credit cards don’t make you spend more. And thanks to the Credit CARD ACT of 2009 , many of the worst tricks and traps commonly used by credit card companies have been outlawed.
“Credit cards can actually be extremely beneficial if you use them correctly,” says Bill Hardekopf, CEO of Lowcards.com. “That means paying off your entire balance on time each and every month.”
Credit cards are also the safest way to pay because they have built-in fraud protection required by federal law.

We Love Our Debit Cards, But Not our Banks

The recession served as a wake-up call for many of us to get a better handle on our finances, and for a lot of folks that meant replacing one piece of plastic, the credit card, with another, the debit card.
But now, regulatory changes have made those debit cards less of a cash cow for financial institutions. That’s left many banks scrambling to introduce new fees to make up for that lost money.
The problem: Consumers are dead set against the fees, and they don’t necessarily want to start using their credit cards again, either.

Some customers may not be able to use credit cards more because they have lower credit limits than before the recession and credit crunch. Others may have found it easier to keep their spending under control if they use a debit card rather than a credit card, even if they pay the credit card off each month.

And others may find that they just aren’t getting as good of a deal on their credit cards, said Bill Hardekopf, CEO of lowcards.com. His research shows that the average advertised annual percentage rate for a credit card is now 14.05 percent, compared with 11.64 percent when the an earlier set of credit card regulations, known as the CARD Act, was passed in 2009.

Story by Allison Linn

Another major dispute on interchange fees could take place, and this one may have new, painful consequences on consumers. This time, the battle centers around the swipe fee that retailers pay on credit card transactions.

According to CNBC, there is an antitrust suit between five million retailers and Visa, MasterCard and 13 large banks, including Citi, Bank of America, Chase, Capital One, U.S. Bancorp and Wells Fargo. Retailers claim that banks and the payment systems have unfairly worked together to increase the amount of the interchange fee retailers pay on credit card transactions.

The amount that each retailer pays as a swipe fee on a credit card varies widely but the industry average is approximately 2 percent. This antitrust suit could cut that figure by three-quarters down to 0.5 percent. That would be one more devastating revenue blow to the banks as well as Visa and MasterCard, leading to billions of dollars in lost income.

Last year, the Durbin amendment went into effect on October 1, cutting the interchange fee on debit card transactions from an average of 44 cents to no more than 21 cents (plus 0.05 percent of the transaction, with the possibility of an additional cent if banks comply with fraud prevention procedures). Banks tried to make up for this lost revenue by implementing a monthly debit card fee which led to consumer outrage. Banks eventually rescinded this monthly fee.

If the retailers win this antitrust suit, it could have have a significant impact on consumers:

* Banks will lose billions of dollars at a time when they have already suffered significant cutbacks in revenue. Whenever banks lose revenue in one area, they try to make up for it in another area and that always comes at the expense of the consumer. An increase in existing fees, the introduction of new fees, and an increase in the credit card interest rates are changes that could be pushed by banks.

* A significant decrease in credit card reward programs. The lucrative cash back and airline mile rewards will likely decline. Most banks eliminated debit card rewards when the Durbin amendment passed. The same could happen with credit card programs if retailers win this suit.

* A likely decrease in attractive balance transfer offers. Currently, credit card issuers are offering 0 percent interest rates for extended periods of time in order to lure customers from their competitors. The Citi Platinum Select card offers 0 percent for 21 months; the Discover More card offers 0 percent for 18 months; and the Slate from Chase card offers 0 percent for 12 months with no balance transfer fee. If retailers win this antitrust suit, look for credit card issuers to scale back these balance transfer offers.

* On the positive side, a possible decrease in prices at store level. Retailers claimed the passage of the Durbin amendment could lead to a decrease in prices since they would no longer have to pay the high swipe fees on debit card transactions. It is difficult to see if this actually took place. However, retailers may face more pressure from consumer groups to cut prices if the interchange fee is also slashed on credit card purchases.

BANK OF AMERICA, BIG BANKS FACE MASSIVE CREDIT CARD CASE
Private antitrust litigation pitting some five million retailers against Visa, MasterCard, and 13 large banks has slipped under the radar of many analysts and investors who follow those companies, but the case may deliver a multi-billion dollar shock to bank bulls in the coming months. Estimates of the potential cost of a settlement of the antitrust case vary dramatically, from a few billion dollars into the hundreds of billions. At least as worrisome to the financial companies, according to Deutsche Bank research, is the risk that a settlement or judge’s ruling could take the 2 percent “interchange” fees banks and card companies charge retailers on credit card transactions to as low as 0.5 percent. That would equal the rate in Australia, but still be higher than the 0.3 percent charged in the European Union. The
impact of such a change would be several times as costly as the Durbin Amendment, which caps fees banks can charge on debit cards and is one of the new rules most hated by the big banks.

Story by Dan Freed for CNBC

BANKS MOVE AHEAD TO INCREASE OVERDRAFT PROTECTION FEES
The cost of not having enough money just got steeper. The median overdraft fee banks charge customers surged to $30 from $27.50 last year, according to a study released by Moebs Services. The survey looked at overdraft fees from more than 2,500 banks and credit unions of all sizes across the country. Moebs said the jump was the largest one in 30 years of collecting data, and that banks are trying to make up for money lost due to regulatory changes.

Story by Catherine New for Huffington Post

A HEALTHY OUTLOOK FOR CREDIT CARD ISSUERS
Banks released fourth quarter earnings this week and the reports show that credit cards issuers are in a much healthier position than the last few years. Consumer use of credit cards is growing, while the default and delinquency rates continue to drop. Credit card lending is entering a sweet spot where cardholders are charging more purchases to accounts once again while staying current on their payments.

PUSHING MOBILE PAYMENTS
Sprint Nextel Corp. this week tripled the number of smartphones it offers with a seldom-used technology for tap-and-go payments, as the carrier and its rivals try to convince a reluctant public to make mobile payments mainstream. So far customers and retailers have remained tepid toward the technology, called near-field communication, or NFC, prompting Sprint and others to try a different tack: touting NFC’s “side benefits,” which include mobile coupons and digital-key replacement. A chief technology officer for Verizon Wireless said he expected it to be at least three years before NFC use for payment is anything more than a niche. He said retailers are concerned their transaction fees may rise, though he said they ultimately would benefit through targeted couponing and speedier checkout. Under one scenario, a venture like Isis could absorb those fees in exchange for profit-sharing through the coupons.

Story by Greg Bensinger for the Wall Street Journal

TAXI-CAB DRIVERS RILED UP OVER CREDIT CARD PROCESSING FEE
San Francisco taxicab drivers are up in arms about being forced to absorb a 5% service charge to process credit card payments. Rules that went into effect last April shifted the fees from five of the largest cab companies in the city to drivers. Since then, several hundred drivers have protested at City Hall and some say they have been telling passengers they only take cash or claim their card equipment is broken. Dozens of drivers have begun using technology from San Francisco start-up Square, which makes a small white card reader that attaches to smartphones. Square charges merchants 2.75% to process payments on the go, but drivers must pay for their phones and data charges themselves.

Story by Geoffrey Fowler for the Wall Street Journal

ZAPPOS ATTACKED: 25 MILLIONS ACCOUNTS AT RISK
Online retailer Zappos announced that criminal hackers broke into its systems and had access to personal information on potentially more than 24 million customer accounts. That would make this the largest data breach since hackers got into Sony’s PlayStation Network last year. Zappos is emailing customers to tell them that information such as names, email addresses, billing and shipping addresses, phone numbers, the last four digits of credit card numbers, as well as encrypted versions of account passwords might have been compromised in the breach. Zappos reset all passwords to prevent further unauthorized access. It also claimed that full credit card numbers and other payment information (which is stored in a separate database), was unaffected and not accessed. Even if no full credit card numbers were stolen, the amount of information that may have been stolen is significant. Knowing such information as a name, address, phone, and just the last four numbers of credit cards (often used by companies to verify identity over the phone) could be enough for criminals to steal identities.

Story by Erik Sherman for CBS

AVOID APPLYING FOR STORE CREDIT CARDS
We’ve all been tempted by the immediate benefit–save 10% or maybe even 15% on your current purchase when you apply for the store’s credit card. But this is not a wise financial move for most consumers. Most retail stores offer credit cards with interest rates between 23% and 30%, much higher than bank-branded credit cards. According to the LowCards.com Weekly Credit Card Rate Report, the average advertised APR last week among the nation’s 1000+ credit cards was 14.04%. These cards, also known as private label credit cards, carry higher interest rates than bank-branded cards because they tend to be held by riskier borrowers with fewer credit options. But in the past year, overall credit card default rates have dropped significantly and private label cards with high rates are more appealing to issuers that need the revenue.

http://www.lowcards.com/blog/avoid-applying-for-store-credit-cards-3084/

Read the rest of this entry »

The LowCards.com Weekly Credit Card Rate Report January 19, 2012

The LowCards.com Weekly Credit Card Rate report is based on
our Complete Credit Card Index which tracks the advertised rates
of 1060 credit cards in the United States.

Our index showed that the Annual Percentage Rates for credit cards
was 14.05% which was slightly higher than 14.04% from last week.

Here are the averages from the LowCards.com Complete Credit
Card Index for the previous ten weeks:

Jan. 12  14.04%
Jan. 5    14.01
Dec. 29  14.00
Dec. 22  14.00
Dec. 15  14.05
Dec. 8   14.17
Dec. 1     14.16
Nov. 22  14.12
Nov. 17  14.14
Nov. 11  14.17

The average cash advance rate for this week was 21.47% which was
higher than 21.46% from last week.

The credit cards with the lowest interest rates in the nation this week are:

1. 5.00% Speedway SuperAmerica Credit Card
2. 5.15% First Tennessee Platinum Premier Visa
3. 6.25% Lake Michigan Credit Union Platinum Visa

The LowCards.com credit card rate report is compiled weekly using data from
1060 credit cards which are tracked on the LowCards.com website. The Complete Credit Card
index is available here:

http://www.lowcards.com/CreditCardIndex.aspx

Rates may occasionally change due to the number of cards
being tracked.

About LowCards.com: LowCards.com ( http://www.lowcards.com )
simplifies the confusion of shopping for credit cards. It is
a free, independent website that helps consumers easily
compare credit cards in a variety of categories such as
lowest rates, rewards, rebates, balance transfers and lowest
introductory rates. It also gives an unbiased ranking and
review for each card.

Banks released fourth quarter earnings this week and the reports show that credit cards issuers are in a much healthier position than the last few years.

Consumer use of credit cards is growing, while the default and delinquency rates continue to drop.

Credit card lending is entering a sweet spot where cardholders are charging more purchases to accounts once again while staying current on their payments.

This healthy outlook will probably lead to more aggressive marketing on the part of credit card issuers in 2012. We will likely see some new cards and offers, as well as an increase in the number of credit card solicitations in your mailbox, especially if you have a good or excellent credit score.

According to the Wall Street Journal, American Express credit card loans grew 4.5% from November to $53.7 billion in December. Capital One credit card loans grew 3.3% in December to $56.6 billion. Citi credit card loans were $75.9 billion in the fourth quarter, up almost 3% from the third quarter.

While these figures are positive for the issuers, so, too, are the default and delinquency rates. Charge-offs and late payments peaked in the summer of 2010 and have dropped rather steadily since then.

All six of the major credit card issuers showed declines in the delinquency rates in December, while four of the six issuers also showed drops in the charge-off rates.

* The Capital One charge-off rate dropped to 3.98% in December from 4.29% in November. The delinquency rate dropped to 3.66% in December from 3.73% the previous month.

* The American Express charge-off rate dropped to 2.3% from 2.4%. The delinquency rate dropped to 1.4% from 1.5%.

* The Citigroup charge-off rate dropped to 5.11% from 6.36%. The
delinquency rate dropped to 3.11% from 3.28%.

* The JP Morgan Chase charge-off rate dropped to 4.11% from 4.18% in November. The delinquency rate dropped to 2.48% from 2.54%.

* The Bank of America’s charge-off rate rose to 6.05% from 5.67% in November. The delinquency rate dropped to 3.82% from 3.96%.

* The Discover charge-off rate rose to 3.15% from 3.04%. The delinquency rate dropped to 2.32% from 2.43%.

Lower default rates are good for banks because they set aside less money for losses and this money can boost the bottom line.

Credit cardholders and issuers have both made changes that brought an excessive system of credit card borrowing and lending back under control. Many of the borrowers who could not pay off their debt have already defaulted, while others have diligently paid down their balances and used other forms of payment to avoid the high interest rate penalties. Credit card issuers have closed risky accounts, cut credit limits on millions of accounts, and tightened lending standards to cut their risk of defaults and late payments.

The Return of Small-Business Credit Cards
Lenders are courting small-business owners like you with growing numbers of new credit cards and generous rewards programs.

And it’s easy to see why. About 42% of small-business owners carry a credit-card balance, according to July 2011 data from the National Small Business Association in Washington, D.C.

If you are paying two different interest rates—one on purchases and another on a balance—the monthly payment that is above the minimum required could be applied to the balance with the lower interest rate first, according to Bill Hardekopf, chief executive at LowCards.com, which tracks credit card offers, including those aimed specifically at small-business owners.

In contrast, personal credit cards must apply the payment to the higher rate first to lessen the costs for the borrower.

Story by Anna Maria Andriotis for the Wall Street Journal

We’ve all been tempted by the immediate benefit–save 10% or maybe even 15% on your current purchase when you apply for the store’s credit card.

But this is not a wise financial move for most consumers.

Most retail stores offer credit cards with interest rates between 23% and 30%, much higher than bank-branded credit cards. According to the LowCards.com Weekly Credit Card Rate Report, the average advertised APR last week among the nation’s 1000+ credit cards was 14.04%.

Some cards, such as the Napa Auto Auto Care Easy Pay and the Lane Home Furnishings Credit Card, are charging a jaw-dropping 30% interest on credit card purchases. Both Goodyear and Zales have 28.99% APR on their cards; Office Depot Personal Credit Card charges 27.99%; Sears charges 25.24%; and Macy’s credit card has a 24.50% APR.

Retail cards, also known as private label credit cards, carry higher interest rates than bank-branded cards because they tend to be held by riskier borrowers with fewer credit options. Issuers suffered significant losses on these private label cards during the financial crash of 2008. In fact, General Electric and Citigroup, two of the largest issuers of private label cards, indicated that they wanted to sell off their private label business but both failed to find a buyer.

But in the past year, default rates have dropped significantly and private label cards with high rates are more appealing for banks and issuers that need the revenue. According to the Wall Street Journal, Wells Fargo is considering getting into the private label business. Packaged Facts forecasts receivables for private label card programs to reach $152 billion by 2015 (down from the pre-recession of $156 billion in 2007).

There are plenty of reasons to avoid these retail credit cards:

* Extraordinarily high interest rates applies to every applicant, no matter your credit score. If you use the card to pay for a purchase and know you can’t pay it off, you should add in the cost of your interest penalties to the price of your purchase. If your interest rate is 29.99% on a card with a $500 balance and you just make the $20 minimum monthly payment, it will take three years to pay off your balance and you will pay $295 in interest payments. Instead of paying $500 for the purchase, you are paying almost $800.

* Retail cards can pull down your credit score. Retail cards usually have low credit limits since merchants want to minimize their financial risk. If you carry a balance, this will increase your credit utilization ratio which is an important factor in your credit score.

* If you apply for multiple retail cards, this can can also pull down your credit score for two reasons. Opening these store accounts will lower the average age of the cards in your credit history, and the length of credit history accounts for 15% of your credit score. Secondly, every time you apply for a card, the issuer may pull your credit score which is a “credit inquiry”. Too many credit inquiries can lower your credit score.

TACKLE HOLIDAY DEBT NOW, BEFORE YOU FIND YOU CAN’T KEEP UP
Here they come–the post-holiday credit card bills. They’re a potent reminder of the cost of the holiday season. In just the one week before Christmas, it’s estimated that Americans spent $44 billion. How will you deal with those bills that start arriving in your mailbox this week? Don’t just set them aside and let them pile up, hoping to keep the holiday glow alive. Late fees are very costly, and will result in even more interest charges. Open the bills, take a close look–and add up what you owe. Here are three tips for dealing with your credit card bills promptly–even if you can’t pay the full balance.

Story by Terry Savage for Chicago SunTimes

CREDIT CARD ISSUERS RAMP UP COSTLY ADD-ON SERVICES
Credit card companies have ramped up their marketing of credit insurance, credit monitoring, identity theft protection services and other add-on products. The new emphasis on these add-on services reflects that credit card companies are searching for ways to squeeze more profit from their businesses. They’re challenged by new regulations that tightened restrictions on fees and interest rates in recent years. Likewise, ID theft insurance often comes with a host of restrictions. Policyholders can often only file claims on one ID theft incident per year. There is also frequently a cap on the amount of coverage, which could in some cases be less than the actual losses. Consumers should also pause before purchasing ID theft protection services, which has exploded in recent years. In August, Javelin forecast that about 25 million people would spend roughly $3.5 billion on such services in 2011.

Story by Eileen AJ Connelly for the Associated Press

CREDIT CARD DEBT INCREASES SIGNIFICANTLY
Americans are borrowing and charging much more, according to the latest Federal Reserve G19 report released this week. Consumers increased their overall borrowing by $20.4 billion in November which represents the largest increase in ten years. Many analysts believe this is a sign that Americans are feeling better about the economy. However, there could also be some red flags in this latest report. Revolving credit, the majority of which is credit card debt, increased at an annual rate of 8 1/2 percent and grew for the third straight month. The $5.6 billion jump represents the largest gain since March 2008. With the strong holiday sales, we will likely see another increase in December during the peak of the shopping season. While this increase may be good news for retailers, it also means that consumers will soon be getting credit card bills with much higher balances. Consumers can’t get lured into running up more credit card debt if they can’t afford to quickly pay it off. Increasing credit card debt is not a trend to be carried over into the new year.

TV ADVISER ON MONEY OFFERS CARD
For more than a decade, Suze Orman has exhorted her viewers on CNBC to spend less than they earn, flashed her blazing smile from the covers of best-selling books and endorsed the occasional auto loan provider and brokerage firm. Never before, however, has she built a financial product from scratch and urged her considerable number of fans to use it frequently. That changes with the introduction on Monday of her Approved card, which works a lot like a bank debit card but does not come with a checking account. It is a prepaid debit card, and companies that offer similar cards have drawn criticism for sky-high fees and poor disclosure. Ms. Orman seeks to broaden the debit card market by charging low fees and offering new services, including unlimited access to credit reports. She has put more than $1 million of her own money into the venture and is prepared to add more, since the product may not break even right away. But her move also raises so many questions that it is hard to even know where to start.

Story by Ron Lieber for the New York Times

FEE LIMITS MAY SPUR CASH-ONLY SALES
Consumers could see more $5 or $10 minimum charge rules–or at least polite requests–when using credit or debit cards this year, as merchants try to cope with an unintended effect of new federal limits on how much card issuers can charge them in so-called “swipe fees.” Those regulations already sparked an uproar when some banks tried to impose monthly debit card use fees on consumers to offset the revenue hit–only to retreat in the face of a withering backlash. But the fallout didn’t end there. In an odd twist that stems from the way swipe fees have been assessed, the new rule could prompt card issuers to actually raise fees on smaller purchases in order to offset lost revenue from lower fees on larger ones. And that means stores with a lot of small-ticket sales, such as coffee shops and gas stations, may force or coax consumers into paying with plain old cash for purchases under a certain amount, experts predict. Stores now can refuse to accept credit cards for those smaller purchases, and they may request that customers not use debit cards for them either.

Story by J. Scott Trubey & Arielle Kass for the Atlanta Journal Constitution

ISRAELI HACKER RESPONDS TO CREDIT CARD HACKING
An Israeli hacker has published details of hundreds of Saudi credit cards online and is threatening to post more in revenge for acts by Arab hackers. Last week a hacker, claiming to be from Saudi Arabia, published information about tens of thousands of Israeli credit cards online. It was one of the worst incidents of data theft in Israel. Experts say the attacks draw attention to the potential for virtual or cyber wars in the Middle East. The Israeli hacker told the newspaper he had information on an additional 300,000 working Saudi credit card numbers. “If they publish one more little detail on Israel, we will attack in full force and publish all of the credit card details,” he said. The latest attacks have underscored the hostile relationship between Israel and Saudi Arabia. They have also shown the potential for politically motivated cyber attacks to escalate in the region with Arab and Israeli hackers warning of possible future action.

Story by Yolande Knell for the BBC

STORE DEBIT CARDS ARE ON THE RISE
A store credit card isn’t the only way to get exclusive perks. Although not widely publicized, two major retailers offer store-branded debit cards that draw directly from customers’ checking accounts. The cards from Nordstrom and Target are still a rarity among retailers and haven’t yet hit the radars of most shoppers. But they also reflect the growing preference for debit cards that consumers have shown in recent years. At a time when consumers are searching for ways to keep debt in check, store debit cards could soon find a wider audience. A Nordstrom spokesman said there’s been an uptick in demand for the company’s debit card in recent months, even though the card has been available since 2005.

Read the rest of this entry »

The LowCards.com Weekly Credit Card Rate Report January 12, 2012

The LowCards.com Weekly Credit Card Rate report is based on
our Complete Credit Card Index which tracks the advertised rates
of 1060 credit cards in the United States.

Our index showed that the Annual Percentage Rates for credit cards
was 14.04% which was slightly higher than 14.01% from last week.

Here are the averages from the LowCards.com Complete Credit
Card Index for the previous ten weeks:

Jan. 5    14.01%
Dec. 29  14.00
Dec. 22  14.00
Dec. 15  14.05
Dec. 8   14.17
Dec. 1     14.16
Nov. 22  14.12
Nov. 17  14.14
Nov. 11  14.17
Nov. 4   14.12
Oct. 27  14.16

The average cash advance rate for this week was 21.46% which was
higher than 21.44% from last week.

The credit cards with the lowest interest rates in the nation this week are:

1. 5.00% Speedway SuperAmerica Credit Card
2. 5.15% First Tennessee Platinum Premier Visa
3. 6.25% Lake Michigan Credit Union Platinum Visa

The LowCards.com credit card rate report is compiled weekly using data from
1060 credit cards which are tracked on the LowCards.com website. The Complete Credit Card
index is available here:

http://www.lowcards.com/CreditCardIndex.aspx

Rates may occasionally change due to the number of cards
being tracked.

About LowCards.com: LowCards.com ( http://www.lowcards.com )
simplifies the confusion of shopping for credit cards. It is
a free, independent website that helps consumers easily
compare credit cards in a variety of categories such as
lowest rates, rewards, rebates, balance transfers and lowest
introductory rates. It also gives an unbiased ranking and
review for each card.

The Truth Behind Suze Orman’s Debit Card

Financial advisor Suze Orman has created a new prepaid debit card and she wants you — and everyone else — to buy it. The Approved Prepaid MasterCard is promoted as “better than cash” and “safer than cash.”
Like other prepaid cards, you can’t go into debt because you can only spend the money that’s loaded on the card.

Bill Hardekopf, CEO of LowCards.com, says the Approved card has some nice benefits and fewer fees than some cards.
advertisement

“If you have to get a prepaid card, Orman’s card is a very good card,” Hardekopf says. But we still believe that a debit card that’s tied to your checking account is a better alternative than any prepaid card.”

Americans are borrowing and charging much more, according to the latest Federal Reserve G19 report released yesterday.

Consumers increased their overall borrowing by $20.4 billion in November which represents the largest increase in ten years. Many analysts believe this is a sign that Americans are feeling better about the economy.

However, there could also be some red flags in this latest report.

Revolving credit, the majority of which is credit card debt, increased at an annual rate of 8 1/2 percent and grew for the third straight month. The $5.6 billion jump represents the largest gain since March 2008.

This is a big jump in credit card debt, and these are November figures. With the strong holiday sales, we will likely see another increase in December during the peak of the shopping season. While this increase may be good news for retailers, it also means that consumers will soon be getting credit card bills with much higher balances. Consumers can’t get lured into running up more credit card debt if they can’t afford to quickly pay it off. Increasing credit card debt is not a trend to be carried over into the new year.

Here are six tips for paying down the debt on your credit card:

1. Get an honest assessment of how much you owe for all credit cards debts. It may have been easier to pay the minimums without looking at the total amount that you owe, but misleading yourself only makes it worse. Write down a debt summary that includes the creditor, monthly payment, interest, balance due, credit limit and due date for each loan.

2. Pay more than your minimum payment. Your minimum payment is usually only 2-5% of your balance. At this rate, it will take years to pay off your debt. Try to pay at least twice the amount of your minimum payment every month.

3. Pay off the card with the highest APR first. Continue to pay at least the minimum on your other cards until you pay off the card with the highest rate. Then focus your effort on the card next in line. After you pay off the card, keep it open, especially your oldest cards. Losing this available credit can lower your debt utilization ratio which could lower your credit score.

4. Consider transferring your balance to a card with a lower rate. If your rate is above 15%, look for a card that offers 0% for at least 12 months. You will need to determine if the interest payments you save outweigh the fee you will pay on the amount you transfer (usually 3-4%). To take full advantage of this 0% introductory offer, don’t charge anything more on this card and try to pay off the entire balance during that introductory time period. When comparing cards for a balance transfer, also look at the ongoing interest rates. If you are unable to pay off the balance before the introductory period ends, you will then pay the ongoing interest rate. Another consideration is that the credit card issuer may only accept a portion of the amount you want to transfer because, depending on your credit limit, the issuer will want to leave room for new charges. The best offers will typically be given to applicants with a credit score in the mid-700s. If you have a score less than this, you may receive a shorter introductory period, or your application may be declined.

5. If you have a credit card balance, stop using it for anything other than necessities. Use cash instead. If you carry a balance, you are paying interest for every purchase, including clothing, entertainment or dinner. Factor that in to each purchase. Paying with cash will not only save money on interest, but it will also reduce the amount you spend.

6. Pay your bills on time, every time. Not only do you have to pay a late fee, but late payments can also appear on credit reports. Negative information like this can result in lower credit scores and higher interest payments.

Terry Savage gives ways to pay down holiday debt. Recommends LowCards to find cards for balance transfers

It didn’t work for the Kardashians. Perhaps it will for Suze Orman.

Orman is the latest celebrity to jump into the prepaid card market. As a well-known financial adviser with a strong following, she just may have the clout to capture a significant portion of the market.

Prepaid cards have historically targeted consumers with poor credit who could not qualify for a standard credit card. These cards were easy to get, but were loaded with exorbitant fees. That began to change last year when American Express introduced its own prepaid card with fewer fees.

There are some nice advantages to Orman’s Approved Card. It has fewer fees than most prepaid cards: there are no loading fees, no fee to transfer money to another card, and no fee to make electronic bill payments. The card comes with free identity theft protection and also gives the cardholder unlimited credit reports and scores from TransUnion, one of the three credit reporting agencies.

As with any card, consumers need to read the fine print to be aware of the fees that will be charged.

The Approved Card costs $3 to purchase and then has a monthly fee after the first month of $3. ATM withdrawals are free each month as long as they are made from the Allpoint network and you make a direct deposit of at least $20 each month. Otherwise, the ATM withdrawals will cost $2 per transaction.

If you get cash back when making a purchase at a retail store, that will cost you $2.

Your first call each month to a customer service representative will be free, but subsequent calls will be $2.

The opportunity to receive unlimited credit reports and scores from TransUnion can be beneficial for consumers, especially those trying to build their credit. However, the score that will be available will be the TransUnion score, not the FICO score that most banks use when deciding a consumer’s credit worthiness. Orman says TransUnion plans to collect Approved Card user data to determine if it should include prepaid card data on its credit reports in the future.

A debit card linked to your checking account is much better than a prepaid card for most consumers. A debit card will not have the monthly or usage fees that are common with prepaid cards, even this new one from Suze Orman. But for people who don’t have a bank account, or may have some credit problems, her card may be a good alternative.

Lower the interest rate on your plastic

What you need: An excellent credit score — 720 or higher

How to do it: Go to www.lowcards.com and click on Low Interest Credit Cards. Then search through the offerings and apply. With a high credit score, you should get a card with a rate in the 7%-to-8% range.

ANNUAL SAVINGS: $346 (switching from an average 14.17% rate to 7.25%, on a balance of $5,000)

Psst. NEED A CREDIT CARD?
As the nation’s banks and financial firms emerge from the wreckage of the financial crisis, they are working out how best to lend to people with tarnished credit. Overall, credit card issuers sent 418 million pitches to U.S. subprime borrowers in the first nine months of 2011, double the year-earlier volume of 207 million, according to research firm Synovate. Despite the surge, direct-mail solicitations remain far below pre-crisis levels. Many lenders still are way too leery about subprime borrowers to loosen the lending spigot, especially on unsecured loans such as credit cards. Other lenders, hungry for growth, say borrowers with dinged-up credit deserve an opportunity to rebuild their reputation. Credit cards can be a particularly good place to start because lenders offer borrowers small amounts of credit, at least at first.

Story by Jessica Silver-Greenberg for the Wall Street Journal

IMPATIENT? IT MAY HURT YOUR CREDIT SCORE
Your propensity to wait (or not) is also reflected in your credit score, according to a study from researchers at Columbia and Stanford published online in Psychological Science. Patient people tend to have higher credit scores than those who just can’t wait. “Individuals who are more willing to delay gratification have significantly higher FICO scores,” the report concluded. Participants were given a series of questions meant to gauge their willingness to delay a reward. For instance, they were asked if they would rather have $70 now, or $80 in a month. Participants who were the most willing to wait for the bigger payout had FICO scores that were roughly 30 points higher than those who were least willing to delay, the study found. The correlation held, regardless of income and other factors. Those who were the least willing to delay fell below the subprime credit score cutoff of 620, below which people generally pay much higher borrowing costs.

Study by Ann Carrns for the New York Times

CAN YOU FEAR ME NOW? BANKS FACE VERIZON-LIKE BACKLASH ON FEES
As banks look for ways to get revenue from free services like bill pay, they risk becoming a target of public outcry, as Verizon Wireless has in recent days over a short-lived plan to assess a $2 fee for certain bill payments. Consumers circulated petitions and organized boycotts over Verizon’s fee, which would have applied only to one-time credit and debit card payments made online or by phone (the fee would not have been assessed to consumers who sign up for an automatic recurring payment). Most banks have long abandoned charging for online bill pay, but some have experimented with bringing fees back for specific uses, such as for last-minute payments. The justification for such fees from banks and bill-pay providers is that the price of an expedited payment is more palatable than the late fee and finance charges that would be assessed for missing a due date entirely. Expedited bill-pay fees can be justified, experts say, but consumers may demand that other types of payments remain free, even when such services are costly to banks.

Story in Bank Technology News

BEST CREDIT CARDS FOR 2012
The start of a new year is typically when consumers take a close look at their finances and make resolutions on saving money and cutting expenses. Changing credit cards can save substantial money on interest payments, or earn some extra cash with attractive rewards. But credit cards are not one-size-fits-all, and shopping for the best credit card to fit your specific needs is a must. The credit card offer you receive today is determined by your credit score and how you have handled finances in the past. Here are some of the top credit cards on the market today.

BRINGING EXPIRED DEBT BACK TO LIFE
No one was more surprised than Thomas Carpenito with the credit card invitation that landed in his mailbox earlier this year. The 27-year-old had about $10,000 in old debts and a credit rating 200 points below “good.” Far from a mistake, the offer was part of a controversial and growing partnership between debt collectors and banks that profits both. To get the new credit card, Mr. Carpenito agreed to repay $400 on a seven-year-old debt that had expired under New York’s statute of limitations. CompuCredit, a leader in the business, collected about $15 million in newly resurrected debts and fees by issuing credit cards to people with banged-up credit in the first nine months of 2011, according to a securities filing. It also has drawn scrutiny by federal authorities for allegedly deceptive practices. Many banks, hungry for new revenue streams, are eager partners. They receive fees and higher-than-average interest rates by granting debt collectors access to their license with MasterCard. The debt companies typically
agree to cover losses to banks if borrowers stop paying. Collectors aren’t afraid of the risks in issuing new credit cards because they instantly turn a profit on virtually worthless debts–purchased for pennies on the dollar–when people agree to start making payments on them. The credit card agreements essentially create assets out of thin air.

Story by Jessica Silver-Greenberg for the Wall Street Journal

YOU CAN EXPECT MORE BANK FEES IN 2012
Banks will continue to experiment with fee increases in the New Year, according to our own analysis and industry experts, as they attempt to make up billions in lost revenue due to the bad economy and new regulations. Here is some of what you can expect for 2012.

Story by Maggie Shader for Consumer Reports

CONSUMER BUREAU: NOW IT CAN DO SOMETHING
With President Obama’s recess appointment of a new chief to run the consumer bureau, the agency can flex new powers regulating financial products from non-banks–including student loan providers, debt collectors, payday lenders, and mortgage originators and servicers. Obama on Wednesday made a recess appointment of former Ohio attorney general Richard Cordray to be the first director of the Consumer Financial Protection Bureau. That move has ignited controversy. Republicans, who had tried to block a recess appointment for months, are calling it an unprecedented overstepping of executive powers. In the meantime, under Cordray’s leadership, the bureau will start tackling industries that have been unregulated for years.

Read the rest of this entry »

The LowCards.com Weekly Credit Card Rate Report January 5, 2012

The LowCards.com Weekly Credit Card Rate report is based on
our Complete Credit Card Index which tracks the advertised rates
of 1060 credit cards in the United States.

Our index showed that the Annual Percentage Rates for credit cards
was 14.01% which was slightly higher than 14.00% from last week.

Here are the averages from the LowCards.com Complete Credit
Card Index for the previous ten weeks:

Dec. 29  14.00%
Dec. 22  14.00%
Dec. 15  14.05
Dec. 8   14.17
Dec. 1     14.16
Nov. 22  14.12
Nov. 17  14.14
Nov. 11  14.17
Nov. 4   14.12
Oct. 27  14.16
Oct. 20  14.26

The average cash advance rate for this week was 21.44% which was
higher than 21.42% from last week.

The credit cards with the lowest interest rates in the nation this week are:

1. 5.00% Speedway SuperAmerica Credit Card
2. 5.15% First Tennessee Platinum Premier Visa
3. 6.25% Lake Michigan Credit Union Platinum Visa

The LowCards.com credit card rate report is compiled weekly using data from
1060 credit cards which are tracked on the LowCards.com website. The Complete Credit Card
index is available here:

http://www.lowcards.com/CreditCardIndex.aspx

Rates may occasionally change due to the number of cards
being tracked.

About LowCards.com: LowCards.com ( http://www.lowcards.com )
simplifies the confusion of shopping for credit cards. It is
a free, independent website that helps consumers easily
compare credit cards in a variety of categories such as
lowest rates, rewards, rebates, balance transfers and lowest
introductory rates. It also gives an unbiased ranking and
review for each card.

Citi is giving its customers a chance to share or combine ThankYou Rewards through a Facebook application. ThankYou members can combine points to make a charitable donations or choose from rewards. Citi says this gives members a chance to help their friends get a bigger reward or support a common cause.

To kick this off, Citi is giving away 10 million ThankYou points to qualifying ThankYou members on Facebook. The first 4,000 ThankYou members to like the ThankYou Point Sharing App to their personal Facebook page will receive 2,500 ThankYou points from Citi. Individuals must be a Citi ThankYou Rewards member.

The Citi ThankYou Point Sharing App allows you to start a pool of points for an individual, group, or cause and set a goal and track the donations. Facebook friends who are ThankYou members can join the pool. This includes people with a Citi credit card with ThankYou Rewards or a Citibank checking account with ThankYou Rewards.

If you don’t have a plan for your points, or don’t accumulate enough to cash in, this can be a good way to use the points to help a charity or do something nice to someone you care about. Keep in mind that this is also a smart move by Citi to build loyalty and give you another reason to use your Citi card. If you carry a balance on your Citi card, your biggest concern should be paying off your balance instead of earning more ThankYou points.