BLACK FRIDAY: $52 BILLION FOR STORES, BIG CREDIT CARD BILL FOR US
Shoppers blew away even the most optimistic projections of retail analysts by dropping just over $52 billion on Black Friday weekend, according to the National Retail Federation. It’s a bonanza for merchants, but it comes with a dark flip side: numerous surveys indicate that Americans are using their credit cards to fuel this buying binge. A Discover survey included this early red flag: The number of Americans who said they plan to spend more than their allotted holiday budget rose from 10% last year to 14% this year. Historically, consumers tend to be overly optimistic about their willpower when it comes to holiday spending, so the actual number of people who wind up blowing their budgets will almost certainly be higher by the new year. Last year, 16% of Black Friday shoppers used their credit cards; this year, that number spiked to 27%. And while around 39% of shoppers last year admitted spending more than they planned because the deals were so good, 43% did so this year.

Story by Martha White for Time

CONSUMER AGENCY SEES CONFUSION IN CREDIT CARDS
In its first three months in operation, the U.S. consumer financial watchdog received more than 5,000 complaints from credit card customers, led by billing disputes and interest rate problems. On Wednesday the agency said that between July 21 and October 21 it received 5,074 complaints from credit card customers. The complaints varied but at the top of the list were billing disputes, interest rate problems and fraud concerns. The CFPB said it forwarded 4,254 of the complaints to card issuers. According to the issuers, 74 percent of those cases have been at least partially resolved, and in 71 percent the customer did not disagree, the agency said.

Story by Dave Clarke for Reuters

ONLINE SPENDING MUCH HIGHER WITH CREDIT CARDS THAN DEBIT CARDS
Holiday shopping on Cyber Monday was extremely strong, with analysts estimating sales to be 15% to 33% above last year’s totals. Not only are a greater number of people now shopping online, but new research shows they are spending more when paying with a credit card. Consumers spend an average of $82.10 on a single online transaction with a credit card payment compared to $58.29 by those using a debit card, according to Javelin Strategy & Research’s latest Online Retail Payments Forecast report. The study was based on over 2,300 respondents. Javelin predicts this trend will continue long beyond this holiday season. U.S. consumer payments volume from online use of credit cards will climb 63 percent from 2011 to 2016, but debit card online payment volume will only grow by 2 percent.

CROOKS PREY ON UNSUSPECTING CREDIT CARD CUSTOMERS
Claims of lost or stolen credit cards go up by nearly 20% during the holiday season, according to PNC Bank. The reasons are twofold: we tend to use our cards more during this time of year, and thieves are smart enough to know that people tend to be rushed and distracted during this time of year. But some criminals don’t wait until the mall starts piping in Christmas music to take advantage of unsuspecting consumers. Could your account information be at risk? “When you hand over your card to a machine or a person, someone can copy the information,” says security expert Chris E. McGoey.

Story by Martha White for Time

BANKS STUMBLE ALONG TECH FRONTIER
Banks have spent billions of dollars over the past decade developing and deploying technology that is supposed to give consumers a new way to pay for stuff, squeezing out old-fashioned cash. Yet as financial companies spend freely in a rush to the latest frontier, known as mobile payments, previous technology stumbles offer a reminder of how tough it can be to change consumer habits. Phone companies are planning to launch similar technology, banking on the increasing number of Americans who use smartphones for everyday tasks like comparison shopping. Smartphones now represent 40% of all mobile phones owned by adults in the U.S., according to a July survey by Nielsen Holdings NV. Banks are chiming in with “mobile wallets” that make such payments easier by giving customers a way to store financial information, such as credit-card data, in phones. But there are doubts about whether these would-be financial innovators can change consumer habits in the same way that they convinced people to swipe a card at the cash register instead of reaching for cash or a check. It took 50 years for plastic to triumph in the U.S., and even today most transactions under $10 still use cash. The main gripe about mobile payments is that the current technology doesn’t significantly improve upon the tried-and-true method of swiping a piece of plastic.

Story by Robin Sidel for the Wall Street Journal

ANOTHER PROTEST SCHEDULED AGAINST BIG BANKS
The outrage toward large banks continues. Fresh off the heels of consumer protests over monthly debit card fees and “Bank Transfer Day” is a new movement that speaks out against high credit card rates. December 11 has been deemed “Balance Transfer Day” where consumers are encouraged to switch from high interest credit cards to lower or zero rate cards. The Balance Transfer Day’s Manifesto statement on FaceBook encourages consumers to “demand the same 0% interest rate that banks receive from the federal government” and “create our own bail outs by using a balance transfer as a means to bail ourselves out of credit card debt.”

S&P DOWNGRADES TOP U.S. BANKS’ CREDIT RATINGS
Standard & Poor’s Ratings Services has lowered its credit ratings for many of the world’s largest financial institutions, including the biggest banks in the U.S. Bank of America Corp. and its main subsidiaries are among the institutions whose ratings fell at least one notch Tuesday, along with Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co. It typically costs companies more to borrow when their credit ratings are cut, the same way a decline in a person’s credit scores drives up the interest rates that banks and credit cards will offer him.

Story by Eileen AJ Connelly for the Associated Press

WELLS FARGO MULLS ENTERING PRIVATE CREDIT CARD BUSINESS
Wells Fargo is considering jumping into the private label card business, where it would issue credit cards in the name of retailers. The nation’s second largest bank by deposits has been extending virtually any
consumer credit, except this line of business. But with profit margins under pressure from low interest rates and consumers reluctant to take out more credit card debt, Wells Fargo’s new head of consumer lending, Avid Modjtabai, said the bank is exploring “in real time” whether to issue private label credit cards. The interest in private label credit cards underlines how differently bankers view that business after the financial crisis. Those card loans are carrying higher interest rates than bank branded cards but are also riskier because card holders tend to default more often on them. However, delinquencies are down, there is less competition, and several bankers have said they expect that customers use these cards more often now because the financial crisis has cut overall available credit for many borrowers’ bank branded credit cards.

Story by Matthias Rieker for the Wall Street Journal

CONSUMER CREDIT RISK FALLS FOR THE 7TH STRAIGHT QUARTER
Consumer credit risk declined for the seventh straight quarter as
individuals continue to strengthen their financial affairs, according to
credit data firm TransUnion. The firm’s credit risk index fell 4.9% in the
third quarter from a year earlier, to 120.62. Still, the firm cautioned that
the steady decline in credit risk witnessed over the past several quarters
appears to be easing. States with the lowest readings of credit risk
continued to be concentrated in the upper Midwest and New England.
The three states with the lowest credit risk readings were North Dakota,
Minnesota and South Dakota.

Story by Mia Lamar for the Wall Street Journal

MASTERCARD, WESTERN UNION TEAMING UP ON PREPAID
MasterCard Inc. is teaming up with The Western Union Co. in the fast-growing market for prepaid cards, seeking to make it easier and more convenient to use the reloadable cards globally. A year after Western Union began issuing prepaid cards bearing the MasterCard logo in the U.S., the companies say they will begin offering the cards in other countries, with the goal to make it possible for consumers worldwide to use prepaid cards to transfer and spend money.

Story by Eileen AJ Connelly for the Associated Press

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 14.16 percent, a slight increase from 14.12 percent last week. Six months ago, the average was 13.95 percent. One year ago, the average was 13.81 percent.