More Shoppers Are Whipping Out Credit Cards

Just in time for the holidays, credit cards are making a comeback.

On Black Friday, payments made with credit cards rose 7.4% from a year earlier, vs. an increase of 3.4% for payments with signature debit cards, according to First Data, a payments processing firm. An analysis by Javelin Strategy & Research forecasts that credit card payments for online purchases will increase 63% from 2011 to 2016, vs. 2% for debit cards.

Contributing to the credit card revival:
•More incentives to use credit cards. A federal regulation that took effect Oct. 1 slashed the fees banks can charge retailers when consumers pay with debit cards. In response, most banks eliminated rewards programs for debit cards and sweetened rewards for credit cards, which weren’t affected by the rule, says Bill Hardekopf, CEO of LowCards.com.
For example, Chase and Citibank are offering new card holders $200 cash back if they spend $500.

Story by Sandy Block for USA Today

Shoppers broke shopping records on Black Friday as they sacrificed sleep or a day off to track down holiday savings. Smartphones have become a handy shopping assistant but a new study from Retrevo shows
there is still much room for growth and improvement, especially among retailers. Many shoppers have installed retailer’s apps, but few have used it to help with a purchase.

According to the Retrevo study, 43% of smartphone owners have installed a retailer’s app on their mobile phone but only 14% of them have used the app to help with a purchase. The bad news for retailers
is that 78% of smartphone owners have checked out a product in-store, but then bought it from another online store.

According to the survey:
*42% of smartphone owners have used their phone in-store to check prices
*29% of smartphone owners have used their phone to read a review or look up product information
*25% of smartphone onwers have used their phone to get an in-store coupon.

Consumers are most likely to use smartphones to compare the price of electronics. 58% of smartphone owners have checked out electronics in a store, but then bought elsewhere online.

No more debit card fees. What will the banks try next?

Just because debit-card fees are out of the picture for now, don’t stop checking your bank statements.

“You already are paying a fee [on checking accounts] so any increase may fly a little more under the radar compared to assessing a fee on your debit card,” said Bill Hardekopf, CEO of credit card comparison site LowCards.com.

Story by Blake Ellis

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Credit cards can be a convenient way to pay when traveling overseas, but using the wrong card can add extra fees and complications to your purchase.

Many credit cards charge as much as a 3 percent transaction fee for all international purchases.

In addition, some issuers charge a fee if a purchase is processed by a bank outside the United States, even if you never leave your home. If you purchase something online from another country or purchase an airline ticket or hotel room with a foreign company, you could be charged a foreign transaction fee of up to 3 percent.

Before you leave the country or order anything from a merchant that is not based in the United States, it is a good idea to call your issuer and ask about the foreign transaction fee. You can save yourself some money by using a credit card that doesn’t charge a fee for foreign transactions.”

According to a study by Pew Trusts in 2010, 91 percent of bank cards charged an international transaction fee. However, in an attempt to attract affluent cardholders with high credit scores and low risk, some issuers have dropped the international transaction fee from selected credit cards. American Express dropped the 2.7 percent fee from its Platinum and Centurion cards. Chase eliminated the 3 percent fee from several upscale travel cards including the Marriott Rewards Premier card, Chase Sapphire Preferred, British Airways Visa Signature, and United Mileage Plus Club Visa. Citi erased the fee from its ThankYou Premier and ThankYou Prestige cards.

Capital One has never charged a foreign transaction fee on any of its cards.

Current rates for international transaction fees:

Capital One–0%
PenFed Travel Rewards American Express–0%
Discover–2%
American Express–2.7%
Bank of America–3%
Chase–3%
Citi–3%

Using a credit or debit card at foreign ATMs can also add additional fees. Before departing, also ask your bank what the charges are to use your card at “foreign” ATMs. In addition to the international transaction fee, the ATM may also charge its own fee for withdrawals. If you plan to use your debit card, contact your bank to see if they have partner banks in the areas you are traveling. These partner banks may waive the withdrawal fees. Bank of America is a member of the Global ATM Alliance Bank that waives the fee if your bank is a member.

ATM fees on international transactions vary widely. Chase assesses a $5 withdrawal fee for non-Chase withdrawals outside the United States plus a 3% conversion fee. Citi charges a 3% fee after conversion to American dollars.

Here are some other credit card tips for international travel:

* Avoid using your credit card at an ATM to get cash. The fee is typically 3%. You will also immediately be charged the much higher interest rate for cash advances. The cash advance rate can be as high as 25% for some issuers.

* Take a second card in case your primary card is not accepted. American Express is not accepted everywhere, so have a MasterCard or Visa as a backup card. Discover does not have an extensive network in Europe and probably should not be your primary card.

* Notify your bank and credit card issuer about your trip. While you are asking your bank about foreign transaction fees, tell them that you will be using your card while traveling out of the country. Otherwise, the foreign charges may raise a red flag with your issuer and a freeze could be placed on your account.

* In case you run into any problems, take the phone numbers for contacting your issuer from outside the United States.

* Before you order dinner or make any purchases, ask if the restaurant or merchant can process your credit card. Many countries use the chip and PIN system and no longer accept the American magnetic strip credit cards, and this can be a problem for American travelers. Credit card issuers have been slow to adopt chip and PIN, but this is changing with smartcards and smartphones.

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Does your credit card offer trip cancellation insurance or roadside assistance? Does it cover auto rentals or lost luggage? It depends on your type of card, the issuing bank, and the provider. The details are provided, but you have to know where to dig to find them.

VISA
Visa shows the benefits for all types of Visa cards in an easy-to-understand chart.

MasterCard
Mastercard provides the fine print for all of its benefits. You can also call 1-800-MC-ASSIST (1-800-622-7747).

American Express
Pay close attention to the fine print for American Express benefits. AMEX tries to upgrade your coverage to benefits with premium fees. It also charges fees on some services that are free with Visa and Mastercard. For example, American Express charges $19.95 per covered person per covered trip for basic trip cancellation insurance.

Here are some of the hidden perks that may be available with your card.

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Debt Ceiling and Your Money, Now It is Personal

With less than a week to go before the nation’s borrowing limit must be lifted, the debate over the debt ceiling rages on, with your money hanging in the balance.

Even though the possibility of a default seems unlikely, credit agencies have warned that they will downgrade the nation’s credit rating if Washington cannot hammer out a debt deal soon. Without that prime rating, all lenders will demand a higher rate of return on their investments — and that means higher rates on credit cards, student loans, mortgages and car loans.

Credit cards are the easiest form of credit, and about three-quarters of Americans have one, according to Bill Hardekopf, CEO of LowCards.com and author of “The Credit Card Guidebook.”
Most credit cards, though, are tied to the prime rate, which is not likely to change. What could happen, however, is that issuers will raise the margin they charge above the prime rate even further. So, for example, instead of an APR roughly equal to the prime rate plus 10%, an issuer may charge the prime rate plus 11%, he said. “If Uncle Sam is a riskier borrower then so are a lot of other borrowers, and card issuers are very quick to mitigate their exposure to additional risk,” he noted.

The average credit card annual percentage rate, or APR, is currently 14.08%, but could potentially jump at the issuer’s discretion. In that case, issuers have to give you 45 days notice.

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Credit card issuers continue to sweeten the rewards, hoping to add consumers with excellent credit scores to their portfolios.

The latest appealing offer is from Chase. The Southwest Airlines Rapid Rewards Premier credit card is now offering 50,000 points after your first purchase, enough for two free roundtrip flights to almost anywhere Southwest flies. There are some drawbacks to the card: a $99 annual fee, a higher APR (14.24%) and cardholders are probably required to have good to excellent credit scores to be granted approval.

Issuers are becoming very competitive in attracting consumers with high credit scores, and they are using the best reward offers available in several years. There have been some great airline offers on the market during the first half of the year, but consumers need to be aware that many of these cards come with a higher interest rate. Like all reward cards, the benefits are a good deal only if you pay off your balance each month.

Competition among issuers is extremely high as credit card companies try to attract the consumers with the lowest risk: those with high credit scores. According to Mintel Compermedia, credit card offers have more than doubled from 551 million at the end of 2009 to 1.4 billion at the end of 2010. Consumers with good or excellent credit scores are receiving the majority of these solicitations, and rewards seem to be the bait being used to attract new customers. Eight in ten offers are for rewards cards promoting points, miles or cash rebates, up from six in ten offers in 2008.

Some of the other attractive airline mileage offers of 2011 include:

* In April, Chase offered a month-long incentive where new cardholders could earn 100,000 miles with the British Airways Visa Signature Card. New cardmembers received 50,000 bonus British Airways Miles after their first purchase and another 50,000 bonus miles after they spent $2,500 with the card during the first three months.

* In March, Capital One promoted a “Match My Miles Challenge” on their Venture Card. It matched up to 100,000 miles a consumer had in any airline credit card rewards program once the new cardholder spent $1,000 in the first three months on the card.

* Chase currently offers 25,000 bonus miles after the first purchase on either the Continental Airlines One Pass Plus Card and the United Mileage Plus Card. You also get a $50 statement credit after your first purchase. The One Pass Plus Card also offers 10,000 annual bonus points if you spend $25,000 during the year. However, there is an $85 annual fee for One Pass Plus and a $60 annual fee for United Mileage Plus.

* The Citi Gold/AAdvantage World MasterCard currently gives a new cardholder 30,000 miles on American Airlines after $750 in purchases during the first four months. The $50 annual fee is waived for the first year.

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According to a new study by MasterCard, 55% of consumers were not familiar with the perks and benefits of their credit card. Some even paid extra for benefits they already had with their card.

Credit cards are subject to a lot of criticism over interest rates and fees, but their benefits are often overlooked. Most consumers know about the cash back or mileage rewards of their card. But it is worth the time to go through the welcome packet of your new card, or the terms and conditions of any card you may be considering, to see the significant perks offered by that card. Most credit cards offer services like lost luggage reimbursement, car rental damage insurance, or purchase protections that can help you through difficulties and save you some money. These perks are wasted if you don’t know about them.”

Here are some of the standard benefits offered by credit cards issuers. These vary by issuer and type of card.

Car Rental Loss/Damage Insurance
Using your credit card for a car rental may cover damage incurred when renting the car, so it may not be necessary to purchase extra insurance coverage from the car rental company. Before renting, check the description of this coverage in your Cardmember Agreement. To be covered, you must be the primary renter and use your card to pay for the entire rental. You must decline the collision damage waiver (CDW) or similar option when you are reserving and picking up your rental car. Coverage applies for the first 30 days, and is in excess to your other sources of insurance. Coverage may not be available in some countries.

Extended Warranties
These typically double the manufacturer’s warranty for up to a year. There are limits to coverage. Save your manufacturer’s warranties and receipts for any purchases that may be covered.

Purchase Protection
This protects eligible purchases you make with your credit card. The purchased item must have been working when you received or bought it, then stopped working or was damaged. This feature also protects you against theft or accidental damage for up to 90 days from the time of purchase. Some purchases may be excluded and coverage may be limited by occurrence and card member account. For example, Visa will replace, repair, or reimburse you up to $500 per claim. MasterCard insures you for 90 days for theft, damage, or loss of a purchase if made with its card, limited to the cost of the item up to $1,000 per incident.

Security from Unauthorized Purchases
All card companies provide emergency assistance for lost or stolen cards. Under federal law, your maximum liability for unauthorized use of your credit card is $50. If you report the loss before the card is used, the issuer can’t hold you responsible for unauthorized charges. If the card is used before you report it missing, you may have to pay up to $50 per card for unauthorized charges.

Continue to review your billing statements. If they show additional unauthorized charges, send a letter to the issuer describing each charge. Include the date your card was lost or stolen, when you first noticed the problem, and when you first reported it. Send it to the address for billing errors.

All cards have dispute resolution. If you see a charge on your bill and it is not familiar to you, or you think you’ve been overcharged, you can call the credit card company and dispute that charge.

Travel Accident Insurance
When you charge the total amount of the trip to your credit card, travel accident insurance provides benefits if you lose limbs or are killed in an accident on a common carrier such as an airplane, ship, or train. Coverage ends when you arrive at the place designated on your ticket. Platinum cards typically offer $250,000 to $1,000,000 in travel accident insurance.

Trip Cancellation Insurance
Protects you and your family against forfeited, nonrefundable and unused payments if your trip is interrupted or cancelled and you have purchased your common carrier tickets with an eligible card.

Lost Luggage Insurance
If your baggage is delayed for at least 12 hours, some cards will give you up to $300 to buy essential items such as toothpaste, a change of clothes, etc. If you are going on an extended trip or are taking expensive items, it may be a good idea to book the trip with the card that offers the best insurance for lost luggage. Visa Signature reimburses the difference between the value of the amount claimed and the common carrier’s payment, up to $3,000 per trip.

Be prepared to wait for your reimbursement because the airline has to process your claim first. You must provide receipts, and terms and conditions apply. This reimbursement is supplemental to and in excess of any valid and collectible insurance and/or possible reimbursement from any other source.

Travel Emergency Assistance
Most cards offer some type of travel assistance. All American Express cards offer global assistance, an emergency hotline that helps you find a doctor, assistance with lost prescriptions, and tells you the shots you need before you travel. MasterCard provides you with medical assistance while traveling and helps you find dentists, doctors, or pharmacies, even overseas. Visa offers similar benefits. Certain cards cover medical evacuations.

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Despite studies that report monthly drops in credit card usage and defaults, some Americans are having difficulty paying off excess debt even as the economy improves. There were 133,459 U.S. bankruptcy petitions filed in May 2011, which is 10% more than in 2010, according to Automated Access to Court Electronic Records (AACER).

“There’s no redeeming quality to debt. Years ago debt was tax deductible but it hasn’t been for decades,” says John F. Harrison, CFP with Aspire Financial Advisors in Newtown, Massachusetts. “The interest added to items purchased on credit doubles and even triples their cost and creates emotional stress.”

While 33% of Americans carry credit card balances up to $10,000 and 13% carry more than a $10,000 balance, according to a Consumer Reports survey, eliminating $10,000 in debt is manageable for most households without claiming bankruptcy. Here’s how:

1) Consolidate Debt
One way to get serious debt under control is to merge credit card balances on multiple high interest rate accounts onto one credit card with a lower interest rate. A 0% loan gives you time to pay off credit card balances without interest charges draining away your payment. The longer the introductory period, the more debt you can pay down. The Citi Platinum Select and Citi Simplicity cards currently offer 0% for 21 months. Many balance transfer offers with 0% APR are only available to consumers with good credit scores.

There are some red flags consumers should be aware of when transferring a balance from one credit card to another. One is the balance transfer fee, usually 3% to 4% of whatever amount is transferred. This fee is added in to your balance, so you can also end up paying interest on the fee if the balance isn’t entirely paid off when the 0% period ends.

Another danger is the temptation to run up debt again once the consolidation is complete.

“You start charging a little on the new card since the rate is so low. Then, when the introductory period expires and the rate goes up, you can be left with more debt than when you began. You have to be very disciplined to make a balance transfer work,” says Gail Cunningham, spokesperson with the National Foundation for Credit Counseling (NFCC) whose member agencies counsel more than three million consumers each year. The average client that comes to an NFCC member agency for help with their debt has six credit cards to their name.

2) Create a Spending Plan
About 40% of American families spend more than they earn, according to the Federal Reserve.

A spending plan or budget involves accurately tracking all of your expenses–cash, checks, credit cards–so that outflow doesn’t exceed income.

“The easiest way to reduce expenses is to have a budget so that you know where your money is going,” says Harrison. “When you work with a monthly spending plan, it’s easier to see where you can cut back and find money to put toward debt repayment.”

To create a spending plan with customized categories, track spending for 30 days with a notebook carried at all times in a coat pocket or purse. “Everyone in the household must agree to track spending so that the head of the household can figure out where the money is going,” says Cunningham. “It’s the little money spent casually that adds up. You can’t know where you are going financially until you know where you are.”

3) Properly Manage Your Credit Cards
It is natural to want to cut up credit cards once they are paid off or consolidated, but doing so can affect your credit score. The idea is to pay off serious debt while rebuilding a damaged credit report.

“By closing a card you’ve paid off, you remove available credit so that your debt relative to your line of credit increases and this negatively impacts the credit utilization factor of the credit scoring model,” says Cunningham. “Credit is a privilege. If you have it, treat it respectfully. Close with caution because credit is hard to come by these days.”

Pay more than the minimum each month in order to reduce overall finance charges. Interest rates and the method by which finance charges are calculated vary from one credit card company to another. By law, issuers must disclose the interest rate they charge as well as the method which they use to calculate the charges on monthly credit card statements. The Card Act of 2009 requires issuers to provide cardholders with a snapshot chart or table of how long it will take to get out of debt.

According to Americans’ Financial Capability Study by the National Bureau of Economic Research, the borrowing habits of 41% of credit card users resulted in either substantial interest payments, fees or both. 54% always pay their credit card bill in full. Of the 46% who don’t pay their credit card payment in full, 12% don’t know the interest rate on their card with the largest balance.

Paying just the minimum takes longer to pay off debt, especially on cards with high interest rates because the principal remains untouched. If you can only afford the minimum payment on your card, stop using it. Do not add more debt that you can’t afford. If you have more than one credit card, prioritize them by interest rate and pay off your debt with the highest rate first.

4) Generate New Income
About 19.3% of Americans in the workforce are underemployed in 2011 according to Gallup Healthways Well-Being Index, which defines the underemployed as either unemployed or working part time but wanting full-time employment.

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This summer, millions of college graduates are transitioning into life as an independent adult. Even though many have longed for this freedom since they became teenagers, they may not be ready for the financial responsibilities. Weighed down by credit card debt and student loans, many young adults are already far behind in their finances before they even get started.

According to a new study by the John J. Heldrich Center for Workforce Development, approximately 6 in 10 (59%) graduates owed money after graduation for student loans. Recent college graduates entered the working world with an average debt of $20,000, almost as much as the median starting salary ($27,000) for students graduating from four-year colleges in 2009 and 2010. About half (49%) of students who graduated in 2009 or 2010 haven’t paid off any of their debt. Of those students that graduated in 2006 or 2007, 46% have only paid off about one-quarter of their debt, while another 14% say they have not paid off any of their loans.

Now is the time for young adults to take control of their money. Debt seems overwhelming now, but it can get much worse and ruin your credit score. The good news is this the best time of your life to establish good savings and spending habits. For most graduates, this can be a time when they can live cheaply and flexibly and develop a stable financial footing.

Here are ten tips for a good financial start:

1. Budget everything and put every dollar in place. Start with the income that you deposit after your income taxes, healthcare, and retirement are taken out. This is the real amount that you have to spend each month. Expenses always seem to cost more than you estimate and this underestimating can be a budget buster. Track your spending for a month to get an accurate understanding of where your money goes.

2. Start saving immediately from every paycheck, even if it is only a small amount. Open a retirement account at work or your own IRA. Time and compounding interest will help your small amount grow into significant savings by retirement.

3. Know everything about your student loan. Find out when the payments begin, who owns the loan, and the loan’s interest rate. If you have a little extra cash, you can even prepay your college loans.

4. Pay off credit card debt. If you carry a balance, don’t use it for new purchases. If you can’t afford to pay for the item with cash right now, don’t buy it with a credit card.

5. Set a payment schedule. If you are not trained in paying bills, it is easy to misplace a bill or pay it late. Late fees compound the problem and paying late can lead to lower credit scores. The easiest way for young people to pay bills is to do so online with scheduled email reminders of payments.

6. “Study” to improve your credit score. Your credit score is more important than just about any grade you received in college. It is the number that lenders, employers, and even renters will use to judge you. A high score will help you receive the lowest interest rates and save money on auto, credit card and mortgage loans.

Pay your bills on time. Keep your credit card balances under 30% of your credit limit. Build a long and solid payment history with your credit cards.

Monitor your credit history with free annual credits reports through annualcreditreport.com. Obtain a free credit report from each of the three credit agencies–Equifax, TransUnion, and Experian.

7. Use graduation gift money to start an emergency fund. This should be used only for times of unemployment, medical emergencies, or a sudden uninsured car or home repair. The goal should be enough for six months of living expenses. Credit cards are not a safety net because interest rates and fees will significantly increase your problem.

8. Don’t buy everything at once. Prioritize and purchase only what you need right now. Spread your purchases over time. Don’t let splurges become habits. It is easy to let manicures or sporting events become an expensive part of your lifestyle

9. Know the warning signs that you are heading for financial trouble. Warning signs could include: credit cards being charged up to the credit limit; your debt growing each month; bouncing checks; and getting calls from creditors.

If you have any of these signs, take action now. Track your spending, and plug up the money leaks. This is a good time to talk with your parents or a credit counselor about living within your income.

10. Parents must start early to prepare their students for financial independence. Put your college kids on a budget. Give them a fixed amount of money every month that is just enough to cover their expenses each month and they will learn to control their spending–a skill they must have when they are on their own.

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This afternoon, the Senate struck a blow against big banks by failing to pass a measure that would have postponed the implementation of reduced debit card interchange fees.

The legislation would have required a delay to study the unintended consequences of capping the swipe fee. The cap is a new regulation under the Durbin Amendment.

Sixty votes were needed and only 54 Senators voted for the delay.

This is good news for retailers who have the most to gain from a lower interchange, or swipe, fee. The Fed has proposed capping the fee at a maximum of 12 cents per swipe. Banks currently charge 1% to 2%, or an average of 44 cents per transaction. Banks have lobbied hard to keep this fee since a smaller interchange fee would be a devastating revenue loss for banks.

The Federal Reserve Board is now working on final debit card interchange rules which are expected to be released by the end of the month. The new fees scheduled to take effect on July 21.

This is a big loss for the banks. New regulations will cut significant revenue for the banks. Traditionally when these revenue cuts occur, banks find new fees and charges
to levy on the consumer to make up for the loss in revenue. Since it is unlikely that retailers will pass the savings to consumers, this regulation could actually cost consumers a little more. The only real winners appear to be the retailers.

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People are waiting longer to get married. According to the Census Bureau,
the median age of a first marriage in 2010 was 28 for men and 26 for women.
This means people also have time to accumulate more debt by the time they
tie the knot.

It is likely at least one partner will enter the marriage with significant
debt. The average credit card debt per borrower is $4,679 (TransUnion).
The average debt of student loans and financial aid for graduating seniors
ranges from $20,000 to $25,000. These debts can cause significant stress
on a couple before they even get to the rehearsal dinner.

The best way to avoid financial stress is to reveal these debts early in the
marriage planning. It’s not romantic and may be difficult, but it’s not fair
for your spouse to learn about these when the bills come in.

Getting married does not automatically make you responsible for debts
incurred by your spouse before the marriage. Your partner’s debt will
not show up on your credit history as long as you aren’t added to the
accounts. However, the debt will still affect you when it comes to
income and there is a lot less money to pay for other bills, to save,
or to spend in ways that are much more enjoyable than debt payments.

Here are some financial tips for newlyweds:

* Before you get married, know how your future spouse will treat money.
Don’t assume your spouse shares your beliefs about money–the
spending and saving habits may surprise you. A free spender before
marriage will probably be a free spender after marriage. Ask about
their regular indulgences.

* Before the wedding, reveal everything in your financial closet. Be
honest about your income, debts, and money problems. Bring out your
bank statements from the past twelve months to show what you did with
your money. Explain your strengths and weaknesses with money. Admit
if you are a spender or a saver.

* Each of you should get a copy of your credit reports from the three
credit bureaus. This will give you a clear picture of credit accounts,
debts, and how creditors will judge you. Aim to get your scores over
750 to receive the lowest interest rates for your first mortgage and
other loans.

* If your partner has been married before, find out about their
financial obligations to the ex-spouse and children.

* Have a wedding and honeymoon that you can afford. Do not start a
life together charging thousands of dollars in wedding and honeymoon
expenses to your credit card if you can’t pay it off within a year.

* Avoid credit card debt. The best rule of thumb is simply, “if you
can’t pay for something with cash, you can’t afford it.”

* If you have a credit card balance, pay as much as you can above the
minimum each month. If you receive gift money, a bonus, a second job
or a tax refund, use this to pay off your debt. You can even make
micropayments multiple times during the month to pay off your balance
faster. Eat a meal at home and immediately apply the money you saved
to your credit card balance.

* Before the first bills come in, decide who will pay the bills and when
this will take place. If you have separate accounts, know which account
pays each bill. Also notify creditors of your name change and new address.

* Reduce your debt-to-credit limit ratio. This will help improve your
credit score. Your monthly debt, including your mortgage, should not
exceed 35% of your gross income.

* Each spouse should have a credit card in his or her own name to
build an individual credit score. Keep that card for a long time. Use
the card for several purchases each month and pay the bill in full
immediately. Building a long term payment history with one or two
credit cards is an important factor in your credit score.

Here are some credit cards that are good choices for newlyweds:

Citi Platinum Select has 0% for 21 months on purchases and balance
transfers. This is a good introductory offer that can help you pay down
balances on higher rate credit cards as well as providing an interest-free
loan for 21 months. Make sure you can pay off the entire balance by
the expiration date.

Chase Freedom Visa has a relatively low APR–9.99%–and some
attractive cash back rewards. Receive $50 cash back after your first
purchase. Then earn 5% cash back each quarter in rotating categories,
like gas, restaurants, home improvements, and department stores; and
1% per $1 on all other purchases.

Capital One Venture Rewards gives miles that can be redeemed for
travel, hotels or gift cards. It offers a generous 2 miles per $1 on
every purchase. The $59 annual fee is waived the first year.

Ways to Save at the Gas Pump

It’s getting pricey at the pump.

The average price for regular unleaded gasoline was $3.81 at the end of last week, up $1.05 from a year ago, according to AAA’s Daily Fuel Gauge Report. And the Energy Information Administration estimates gas prices will be up 40% this summer from 2010.

But whether you’re hitting the road for work or leisure, there are ways to cut fuel costs.

Some credit cards offer gas rewards. The Shell and BP credit cards both offer 5% rebates on gas purchases at their own stations. The Exxon Mobil credit card gives you a 15-cent-per-gallon rebate on purchases of Exxon Mobil gasoline.

The Blue Cash Preferred card from American Express and the TrueEarnings card from Costco and American Express (you must be a Costco member) both offer 3% cash back on gas purchases made at any gas station. The Capital One No Hassle Cash Rewards card offers 2% cash back. Compare card interest rates and fees at LowCards.com.

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BIG BANKS JOIN BATTLE FOR ONLINE PAYMENTS
Three of the nation’s largest banks are racing into the growing battle over how consumers move money and make payments, launching a service Wednesday that lets people use their checking accounts to send each other money with an email address or cellphone number. Banks are looking to hold onto their influence over consumers, who are increasingly shunning checks and cash, turning instead to new nonbank technologies to spend their money. The new service from Bank of America, Wells Fargo and J.P. Morgan Chase takes aim at the popular PayPal offering. At stake are billions of dollars in credit-card, overdraft and checking fees each year. The banks’ new service, which other financial institutions will be able to join later, carries some financial risk for them. Although it is being aimed at person-to-person payments, owners of small or medium-size businesses could potentially ask customers to pay for goods and services by sending money directly from their online accounts. That could let merchants skirt the fees they now pay banks for processing debit and credit cards.

Story by Robin Sidel and and Amir Efrati for the Wall Street Journal

http://online.wsj.com/article/SB10001424052702304066504576343870105406768.html#ixzz1NMYYlum2

BYE BYE BLIPPY: TWITTER FOR CREDIT CARDS SHUTS DOWN SERVICE
How would you like to share each of your purchases on Twitter? As it turns out, most users wouldn’t. Deemed the “Twitter for credit cards,” Blippy, a startup backed by Twitter co-founder Evan Williams, offered users a way to broadcast each credit card swipe on Twitter as a way of making shopping more social. The company was worth an estimated $46.2 million in April 2010, but TechCrunch reports that Blippy’s shopping sharing service, which never really caught on, is being shut down.

Story by Bianca Boser for the Huffington Post

http://www.huffingtonpost.com/2011/05/20/blippy-twitter-for-credit-cards_n_864612.html

CHECK OUT THE FUTURE OF SHOPPING
A device that looks like a smartphone is making supermarket shoppers–and stores–happier. Perched on the handle of the shopping cart, it scans grocery items as the customer adds them to the cart. Shoppers like it because it helps avoid an interminable wait at the cashier. Retailers like it because the device encourages shoppers to buy more. With the system called Scan It–in use at about half of Stop & Shop and Giant supermarkets in the Northeast–shoppers scan and bag their own groceries as they navigate the aisles, while a screen keeps a running total of their purchases. About a dozen times per shopping trip, the device lets out a “Ka-ching” as an electronic coupon appears on the screen. Retail experts predict that before long, most of these mobile shopping gadgets will be supplanted by customers’ own smartphones. Stores are testing a way for customers to download Scan It software directly into their own iPhones and are exploring ways for customers to use smartphones to pay. Starbucks is already taking steps toward a digital-wallet model.

Story by Ann Zimmerman for the Wall Street Journal

http://online.wsj.com/article/SB10001424052748703421204576329253050637400.html?KEYWORDS=%22credit+cards%22

FILING A CREDIT CARD COMPLAINT
When you have a problem with your credit card issuer, it is hard to find someone who can help, or sometimes, even listen. It is frustrating at best, and unresolved issues can magnify your personal financial crisis. On July 21, the Consumer Financial Protection Bureau (CFPB) will begin accepting complaints about deceptive or abusive financial products and services. The bureau is already receiving complaints but is directing them to other government agencies. The Dodd-Frank regulations require the CFPB to create a way for banking customers to report their problems with financial
products and services, and send them to the appropriate state or federal agency. It can accept complaints by phone, letter, email or on its website. The bureau must also make sure the financial firms respond to consumers. The CFPB will have the power to set and enforce rules on credit cards as well as mortgages and other consumer loans. The CFPB can also impose fines of as much as $1 million a day on companies that break consumer protection laws.

http://www.lowcards.com/blog/tips-on-filing-a-credit-card-complaint-2301/

PREPAID CARDS ATTRACT MONEY LAUNDERERS
Forget bulk cash. Heavy and hard to hide, it’s simply not the most
convenient cross-border conveyance for a 21st-century money launderer.
A safer and increasingly attractive alternative for today’s criminal is
electronic cash, loaded on what are called stored-value or prepaid cards.
Getting them doesn’t require a bank account, and many types can be used
anonymously. U.S. crimefighters consider the cards a burgeoning threat that
regulators haven’t adequately addressed. No one knows how big a role the
cards play in moving the more than $20 billion in drug earnings that U.S.
authorities estimate crosses from the U.S. to Mexico annually. Yet while
anyone crossing that border with $10,000 or more in cash must declare it,
prepaid cards are legally exempt.
Story by Frank Bajak for the Associated Press

http://www.forbes.com/feeds/ap/2011/05/23/technology-lt-fea-plastic-money-laundering_8481416.html

SMARTPHONES STEP UP MOBILE PAYMENTS PUSH
We’re getting closer to the point when the wallet will become optional.
Three of the nation’s biggest banks are launching a service that will let
people make person-to-person payments electronically, using their checking
accounts to send money with an email address or cell phone number. And
Google is expected to announce details soon about a service that will allow
consumers to make store purchases and redeem coupons by waving smartphones
at checkout counters.
Story by Betsy Yerak for Chicago Tribune

http://articles.chicagotribune.com/2011-05-25/business/ct-biz-0526-mobile-payments-20110525_1_paypal-mobile-mobile-commerce-person-to-person-payments

FOR FREQUENT FLIERS, A RANKING OF THE STINGIEST AIRLINES
Travelers may find it just a teeny-tiny bit easier to redeem miles this year
compared with last year, according to a new study of 24 different
frequent-flier programs world-wide. Best among U.S. carriers: Southwest
Airlines, which had award seats available for 99.3% of the queries made,
and jetBlue Airways, which offered seats 79.3% of the time. Southwest and
jetBlue both use points instead of miles, and IdeaWorks Co., the consulting
firm that conducted the study, searched for award seats available at 25,000
points, the equivalent to standard awards at other airlines. Worst among
U.S. carriers: US Airways Group and Delta Air Lines, which didn’t have
seats available in about three out of every four requests. Still, both carriers
showed large improvement over the past year, more than doubling their
availability rates.
Story by Scott McCartney for the Wall Street Journal

http://online.wsj.com/article/SB10001424052702303654804576345254232316730.html?mod=WSJ_hp_MIDDLENexttoWhatsNewsSecond

COMMUNITY BANKS LOBBY TO LIMIT NEW REGULATIONS
Network television ads appearing in the Washington area feature an anxious
woman who cautions that “community banks and credit unions will be squeezed”
by “bad” regulation. The message is clear: lawmakers and regulators should
tread lightly on small banks. In recent months, the community banking
industry has started an aggressive grassroots campaign, taking aim at
regulation enacted in the aftermath of the financial crisis. Small banks
fear new rules under the Dodd-Frank law, especially certain consumer
protection provisions and debit card fee restrictions, could hurt their
bottom line and even cause a few banks to fail. The Independent Community
Bankers of America, an industry trade group, spent roughly $1.2 million
lobbying regulators and lawmakers in the first quarter of 2011, according to
the Center for Responsive Politics.
Story by Ben Protess for the New York Times

http://dealbook.nytimes.com/2011/05/23/community-banks-lobby-to-limit-new-regulations/?ref=business

LOWCARDS.COM WEEKLY CREDIT CARD RATE REPORT
Based on the 1000+ cards in the LowCards.com Complete Credit Card Index,
the average advertised APR for credit cards is 14.01%, slightly above last week’s
average of 13.98%. Six months ago, the average was 13.84%. One year ago, the
average was 13.63%.

http://www.lowcards.com/blog/category/weekly-credit-card-rate-report/

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When you have a problem with your credit card issuer, it is hard to find someone who can help, or sometimes, even listen. It is frustrating at best, and unresolved issues can magnify your personal financial crisis.

On July 21, the Consumer Financial Protection Bureau (CFPB) will begin accepting complaints about deceptive or abusive financial products and services. This includes credit cards, check-cashing services, and “pay day loans.” The bureau is already receiving complaints but is directing them to other government agencies.

The CFPB was created through the The Dodd-Frank Act of 2010. The Secretary of the Treasury, Timothy Geithner, was responsible for setting up the consumer bureau. Last September, Elizabeth Warren was named as Assistant to the President and Special Advisor to the Secretary of the Treasury on the CFPB.

How the CFPB handles complaints will be closely scrutinized. Every step the bureau takes is likely to be controversial and will probably be disputed by banks and politicians since it will be public information.

The Dodd-Frank regulations require the CFPB to create a way for banking customers to report their problems with financial products and services, and send them to the appropriate state or federal agency. It can accept complaints by phone, letter, email or on its website. The bureau must also make sure the financial firms respond to consumers.

Banks are protesting what happens to the information after it is filed. They want to keep the complaints as quiet as possible to protect themselves from trivial or malicious complaints. Nonprofit groups want full disclosure so that anyone can read the complaints.

Until now, agencies could receive complaints, but had little power or incentive to push for changes. The CFPB will have the power to set and enforce rules on credit cards as well as mortgages and other consumer loans. The CFPB can also impose fines of as much as $1 million a day on companies that break consumer protection laws.

There are other ways for consumers to file a complaint about their credit
card:

File a Complaint with the Better Business Bureau (BBB). Complaints are processed by the local BBB, usually the BBB where the company is located. Complaints are sent to the company within
two business days and the company is asked to respond within 14 days. The consumer will be notified of the company’s response. In some cases, BBB mediation or arbitration may be arranged to bring a resolution. The BBB says complaints are usually closed within 30 calendar days.

Contact Your State Attorney General’s Office
Each state has a state Attorney General’s Office. It is authorized to bring legal action only in the name of the state. It does not serve as an attorney for individual consumers. It does not give advice or conduct research on behalf of individuals or businesses. Always contact the Attorney General’s Office in writing so your file may be kept up to date.

It is generally better to try to resolve the dispute with the company or individual before filing a complaint with your state’s Attorney General’s Office. This Office can’t force a company to respond or make an adjustment. However, there are times when filing a complaint can bring resolution. Patterns of complaints involving the same company or a new issue often help the Attorney General’s Office to allocate law enforcement resources. The AG Office will also help refer to the government agencies that can best address the problem.

File a Complaint with Federal Government Regulators
You can file a complaint with the Federal Trade Commission’s Division of Credit Practices. However, the FTC does not resolve individual complaints. Complaints made to the FTC help the agency detect patterns of wrong-doing, and lead to investigations and prosecutions. The FTC enters complaints into a secure online database that is used by thousands of civil and criminal law enforcement authorities worldwide.

You can file a credit card complaint with the Treasury
Department’s Office of the Comptroller of the Currency, a government agency responsible for regulating credit cards issued by national banks in the United States. The agency encourages consumers to first attempt to resolve the complaint with your financial institution. The bank must also be a National Bank in order for consumers to receive help from the OCC.

You can also file a complaint with the Federal Reserve if your bank has been unfair or misleading, discriminated against you in lending, or violated a federal consumer protection law or regulation.

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Truth about credit cards: They aren’t 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.

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.”

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Credit card defaults and late payments dropped again in April, falling to levels last seen in 2008. Five of the six top credit card companies reported both delinquencies and defaults dropped in April to multi-year lows.

This is another sign of recovery for credit card issuers.

After the economic downturn began in 2008, lenders drastically cut credit limits on millions of cardholders, cancelled accounts on their riskiest borrowers and tightened approval requirements for new customers. Many cardholders have also steadily paid down credit card balances. These changes are all playing a factor in these declining default and late payment figures.

* Bank of America was the only major issuer that reported a rising default rate in April. The bank’s annualized charge-off rate, which reflects uncollectible balances, was 8.25 percent in April, up from 8.18 percent in
March. Bank of America’s charge-off rate peaked at 14.53 percent in August 2009. Late payments dropped to 4.52 percent of balances annualized (the
lowest level for the bank since mid-2006), down from 4.82 percent in March.

* American Express still leads the industry with the lowest rate of charge-offs and defaults. Charge-offs were 3.5 percent of balances on an annualized basis for April, down from 3.7 percent in March. Late payments were 1.7 percent in April, down from 1.8 percent in March.

* Citi default rate was 7.85 percent of balances on an annualized basis, down from 7.89 percent in March. Late payments fell to 3.87 percent in April, down from 4.21 percent in March.

* Capital One defaults dropped to 4.97 percent annualized. That was down from 5.87 percent in March. Late payments dropped to 3.41 percent of balances, down from 3.59 percent in March.

* Discover’s charge-off rate was 5.02 percent of balances in April, down from 5.18 percent in March. The delinquency rate dropped to 3.15 percent in April, down from 3.42 percent in March.

* JPMorgan Chase defaults were 5.6 percent in April, down from 6.02 percent in March. Late payments dropped to 2.86 percent, down from 3.08 percent in March.

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The average price of gas now hovers around $4 per gallon, and consumers are searching for ways to save money on gas purchases.

Gasoline credit cards are one way to keep a little more money in your pocket. This is a good time to shop around before the summer driving season begins. As you compare cards, pay attention to the fine print because gas cards are more complicated, and potentially more expensive, than standard credit cards.

Gasoline cards can come in many varieties: prepaid cards or certificates, credit cards issued by gasoline companies, and cards issued by credit card companies. These cards use cash back, gift card or fuel credit incentive programs that are based the amount of purchases you make. Some cards offer significant benefits but you have to understand the fine print.

Like all reward cards, the benefits are a good deal only if you pay off your balance each month. Station-branded gas cards have some of the highest interest rates that can range from 21% to 26.99%. If you carry a balance, these cash rewards are not worth the high rates.

Gasoline Company Credit Cards
Credit cards issued by specific gas companies like BP/Amoco, Shell, and Texaco offer large discounts for gas purchased from their stations. However, these cards typically have a much higher APR than bank-issued cards. Pay attention to the details of the offer because some companies give attractive incentives for the first few months, then change to a much lower rebate. Offers vary by card so read the fine print to see if the incentive is cash back or fuel credits. Some companies will credit your account monthly, but some only redeem annually.

These cards offer some of the biggest savings to loyal customers who usually buy gas from one brand:

The BP Visa
This card offers a 5% rebate for purchases made at participating locations. It also offers a double rebate for the first 60 days. BP Visa Rewards Card is issued through Chase and gives a 2% rebate for qualifying travel and restaurant purchases; it gives a 1% rebate on most all other purchases (except non-BP gasoline purchases). You can redeem your rewards in increments of $25. Unlike many rewards gasoline cards, you can redeem with BP gift cards, a check payable to you, or a donation to the BP Conservation Fund. The BP Visa APR ranges from 15.24% to 19.24%.

The Shell Platinum MasterCard
This card offers rebates of 5% on Shell gas purchases and 0.5% rebates on all other purchases. The rebate is a fuel tax credit and is automatically credited to your Shell card for future gasoline purchases in $25 increments. It should be noted that Shell provides a maximum rebate per billing cycle of $20 ($240 per year). The APR for the Shell Platinum Select MasterCard is 23.99%.

The Exxon/Mobil MasterCard
The fuel credit is $0.15 per gallon at Exxon/Mobil gas stations. There is a 2% rebate on your first $10,000 spent on other eligible purchases, and 1% on other eligible purchases over $10,000. The rebates are automatically credited to your card in $10 increments. You must make at least $10 in Exxon and/or Mobil gas purchases in a single billing cycle to redeem your rebates. The rebates are for future gasoline purchases at Exxon/Mobil stations. The APR for the Exxon/Mobil MasterCard is 24.99%.

The Chevron/Texaco Visa
This card offers fuel credits of $0.30 cents per gallon for the first 60 days, then $0.10 per gallon and 3% fuel credits for non-gas purchases at Texaco/Chevron locations. In addition, you will receive 1% fuel credits for all non-fuel purchases. Chevron/Texaco has a maximum $300 annual fuel credit limit. These fuel credits are applied to future purchases of gasoline at Chevron/Texaco locations only. The APR for the Chevron and Texaco credit cards is 26.99%.

Gasoline Rewards from Credit Card Companies
Gasoline rewards from cards issued by credit card companies usually offer a wider range of benefits. These cards don’t require purchases at a specific gas station, and give cash back on purchases other than gasoline. But these cards usually have some confusing terms and conditions that should be understood before applying for the card.

Some cards offer rotating programs that give higher gas rewards for only a specific time during the year. The rewards rotate by quarter and enrollment is not automatic. Many of these programs require you to sign up each quarter to receive the rewards, making rotating rewards programs harder to navigate.

A number of programs have a maximum benefit amount that you can earn per billing cycle. They may also have purchasing tiers, and full benefits may not begin until you reach the designated spending limit; rewards are smaller until you reach the tier.

Most cards advertise that rewards don’t expire, but rewards can be forfeited for late payments, inactive accounts or closed accounts. Some redemptions aren’t available until they reach a specified reward amount.

Chase Freedom Visa Card
This card advertises a 5% cash back reward for certain categories of purchases each quarter. But you are limited to earning the 5% cash back on
$1,500 in purchases each quarter, so there is a quarterly maximum cash back reward of $75 in these special categories. Consumers can earn 5% on gas purchases during the third quarter of 2011. The card also gives 1% cash back on all other purchases with no limit on the amount earned. This card currently has an extra incentive–new customers receive an additional $150 cash back bonus once they spend $500 during the first three months. There is no annual fee on this card.

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Families may not be best model for debit limit fix

Republicans, claiming revulsion over the U.S. government’s $14.3 trillion in debt, say Washington needs to take a hard look at its finances and balance the books like the typical American family.

Families watch their spending and balance their budgets “and then when they don’t have enough money, they put it on their credit cards,” quipped Bill Hardekopf, CEO of LowCards.com, which analyzes the credit card industry.

But in looking for ways to balance its budget, policymakers may want to avoid taking cues from American families.

According to the latest Federal Reserve statistics, U.S. consumer credit is at about $2.4 trillion for short- and intermediate-term borrowing on credit cards and for car loans, vacations, boats and college loans. That did not count the trillions of dollars in borrowing for home mortgages.

Americans are juggling about $796 billion in credit card debt alone, according to the statistics.

The average credit card debt per U.S. household is $8,329, Hardekopf said, quoting a March Nilson Report. That figure rises to $10,679 when only households that actually have credit cards — about 75 percent — were factored in, he said.

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MOODY’S: CREDIT CARD DEFAULTS HEADING TO A 20-YEAR LOW
Credit card defaults will reach a 20-year low by next year, Moody’s Investors Service said Monday, as card issuers remain choosier in their lending practices. While consumer research firms and an important Federal Reserve banker survey have found that banks are easing lending standards a bit, it remains tough for those with the lowest credit scores to get cards. The riskiest card customers, those individuals who had cards shut down because they couldn’t pay their bills, are unlikely to be able to get new cards in the near future. Because of the tighter lending standards, Moody’s predicts that the top six card issuers are likely to see their default rate drop next year to less than 4 percent of total balances on an annualized basis. Data from across the industry shows that those who still have credit cards have gotten far better about making on-time payments. In recent months, the six banks have reported multi-year lows on delinquent payments. That bodes well for charge-offs in the future.

Story by Eileen AJ Connelly for the Associated Press

CREDIT CARDS RETURN TO SCHOOL
The Federal Reserve in March moved to close some of the loopholes in the CARD Act. One group of borrowers, though, could still be vulnerable to aggressive tactics from lenders: college students. Under the new rules, issuers can no longer offer gifts to induce students to sign up for cards. But the gift prohibition can be circumvented. The law specifies only that card companies can’t offer “any tangible item as a gift.” That leaves the lenders free to offer intangible gifts like online coupons or bonuses credited to accounts. Citigroup, for example, last summer offered students a $50 statement credit on its four student credit cards. Some banks skirt the on-campus marketing restrictions by pitching checking accounts instead, in hopes of signing students up for cards later.

Story by Jessica Silver-Greenberg and Mary Pilon for the Wall Street Journal

TIPS ON PROTECTING YOUR ONLINE IDENTITY
If you aren’t concerned about someone stealing your online data, you should be. If you have internet access, you are a potential victim of having your personal information stolen. In the past few years, hackers have broken in and obtained the account information of millions of consumers. Two separate major hacking incidents occurred with Sony over the past three weeks. Hackers may have stolen personal information from approximately 25 million accounts from Sony Online Entertainment. In a separate attack on
the PlayStation Network and Qriocity, sensitive details could have been at risk for a reported 77 million customers. Personal information included name, address, email address, birthdate, PlayStation password and log in. In addition, the hackers may have stolen password security answers and credit card information. Sony is certainly not the only major corporation to be the
target of a massive heist. Last year, 130 million accounts were stolen from a payment processing company, Heartland Payment Systems. In 2007, 46 million accounts were stolen from TJ Maxx and Marshall’s. Even MasterCard had 40 million accounts compromised in 2005. Here are some steps and precautions you can take to protect yourself from online hackers…

DEBIT CARD FRAUD AT MICHAEL’S NOW INCLUDES 20 STATES
Michaels Stores says the debit card fraud stemming from tampered checkout terminals is far more pervasive than initially thought, encompassing not just Illinois but 19 other states. The scope of the crime has surprised security experts and exposed the vulnerabilities of debit cards, a method of payment that many shoppers have come to rely on for everyday purchases. Debit card fraud is worse for consumers than fraud involving credit cards because little stands between thieves and the money in bank accounts. In the case of Michaels’ stores, many customers had money stolen directly from their accounts via ATM withdrawals. The crafts-store chain identified 90 keypads in 80 stores that were compromised in Colorado, Delaware, Georgia, Iowa, Massachusetts, Maryland, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Utah, Virginia and Washington. Michaels has removed the suspicious swipe pads and over the next two weeks plans to replace about 7,200 similar PIN keypads from its stores. Until those pads are replaced with upgraded models, the company said customers must use cash, credit cards or signature-based debit cards.

Story by Gregory Karp for the Chicago Tribune

NEW STUDY FINDS CARD ACT HELPED REDUCE CREDIT CARD FEES
As the second anniversary of the CARD Act approaches, new research from the Pew Health Group finds these credit card regulations helped reduce late fees, nearly eliminate overlimit penalties and have resulted in minimal changes in annual fees.

MTA CARDS MAY SOON BE REPLACED BY
CONTACTLESS CREDIT CARDS FOR SUBWAY RIDERS
The MetroCard’s days are numbered, and its replacement may already be in your wallet. In a few years, subway riders could be able to open turnstiles with the tap of a credit card–or with a new pass they’re calling the MTA Card. Straphangers also will be able to establish travel accounts and transfer money via home computers or the nearest automatic bank machine. Those are some of the features the Metropolitan Transportation Authority envisions for the fare system that officials say will replace the MetroCard in three or four years–and could save the agency millions.

Story by Pete Donohue for the New York Daily News

PREPAID CARDS GIVE JOBLESS SECURE PAYMENTS BUT MANY FEES
A new study by the National Consumer Law Center reviews unemployment
compensation on prepaid cards and reports that the people who receive the
benefits are also paying fees that they can’t afford to pay. Forty states
now use a prepaid card for paying some or all unemployment compensation
(UC) recipients. If a recipient does not have a bank account, getting cash from a UC prepaid card will usually be cheaper than paying the fees to a check casher to cash a paper check. Prepaid cards are more secure and safer than carrying cash. They can also be used to make electronic purchases. Those are good improvements for UC payments, but prepaid cards aren’t perfect. The have many fees that hit unemployed workers at financially troubled time. According to the study, the typical unemployment compensation check is only $294 a week, barely a third of the average wage. This is a small amount with no room for fees.

HSBC FACES TOUGH SELL FOR U.S. CARDS UNIT
HSBC is considering selling its U.S. credit card arm, but it may not like the price potential buyers are willing to pay. Europe’s biggest bank said on Wednesday that it may sell the more than $30 billion unit, as part of a global bid to dispose of businesses that aren’t sufficiently profitable. But not many buyers remain for such large credit card portfolios since the financial crisis, and a regulatory crackdown has made it harder to turn a profit. Industry members said it would be difficult for HSBC to get the premium it wants for the value of the business on its books. Since 2007, both Citigroup and General Electric have tried–and failed–to sell similar large U.S. credit card portfolios. Barclays PLC and Capital One Financial Corp are the likeliest potential buyers for at least pieces of HSBC’s portfolio, according to several industry members.

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