LowCards.com Weekly Credit Card Update–April 1, 2016
Merchants Seek Lower Debit Card Swipe Fees
The National Retail Federation this week asked the Federal Reserve to lower the five-year-old cap on debit-card swipe fees, saying it was higher than Congress intended. The NRF’s efforts have been supported by other groups, such as the National Restaurant Association, the Food Marketing Institute and the National Association of Convenience Stores. The NRA has contended that swipe fees are especially onerous on small-ticket bills, like those in restaurants. Story by Ron Ruggless for Nation’s Restaurant News.
Are Virtual Credit Cards the Key to Safer Online Shopping?
You can now make online shopping purchases without having to hand over your credit card information. That’s right. Startup Privacy.com enables you to create single-use and recurring-use virtual debit cards for all your online transactions so you can keep your credit card information private. The virtual Visa cards offer shoppers extra protection from card fraud, data breaches and identity theft. Virtual cards work just like gift cards. They are locked down to a single merchant, and you can make them single-use (burner cards) and set transaction or monthly spending limits on them. Story by Krystal Steinmetz for Money Talks News.
Costco Unveils Cash-Back Rewards with New Anywhere Visa Card
Costco customers will soon say so long to AMEX and hello to new rewards with Visa credit cards starting in June. Costco Wholesale’s new Anywhere Visa Card by Citi will offer members the option to earn thousands in cash-back rewards and benefits with its new credit card as of June 20. The new Visa card, offered to members free of charge, will be mailed beginning in May. There is no need to apply for the new card. The card replaces the company’s current AMEX credit cards. Costco customers can earn rewards on everyday purchases at the club, on everyday purchases gas, travel, dining, and more. Rewards may be earned using the card anywhere, not just at the members-only warehouse club. Story by Doreen Christensen for the Sun Sentinel.
Yahoo Stops Taking Credit Cards For Daily Fantasy Sports
Yahoo is no longer accepting credit cards for deposits on its daily fantasy sports platform, according to an email sent to users. This change is universal, not just in some jurisdictions where the legality of daily fantasy sports has come into question. As stated by the email, PayPal is still an option for funding Yahoo DFS accounts. The news comes a week after Yahoo left the New York market in the wake of a settlement in the case involving state Attorney General Eric Schneiderman, DraftKings and FanDuel. The news from Yahoo comes amid ongoing uncertainty in the financial sector regarding what to do with daily fantasy transactions. Story by Dustin Gouker for Legal Sports Report.
Mobile Banking Grows More Popular
The popularity of mobile banking grew last year, with 43% of adults with mobile phones and bank accounts using their phones for financial activities, according to an annual survey by the Federal Reserve. The share of adults who reported using mobile-banking features increased by 4 percentage points from the Fed’s 2014 survey, reflecting the increasing popularity of features like mobile payments and the capability to check account balances on a hand-held device. The report also shows how mobile banking continues to disrupt more traditional banking channels. While mobile hasn’t surpassed online banking or ATMs as the “most important way” consumers interact with their bank, it beat out branch tellers for third place among types of banking interactions ranked by importance. In demographic terms, users of mobile-banking services tend to skew young and diverse, the survey found. A higher share of younger adults, Hispanics and African-Americans use these services when compared with the general population. Story by Gabriel T. Rubin for The Wall Street Journal.
Card-Linking Transactions on the Rise
Card-linking allows customers to link their debit or credit cards to loyalty programs, digital coupons or mobile wallets. When consumers pay with their registered card or mobile wallet, discounts and loyalty benefits are automatically applied, which eliminates the need for paper or digital coupons, QR codes or promotions codes. Card-linking transactions have increased by 50% in the last 12 months. A majority (60%) of the respondents of a survey said card-linking could grow to a $10 billion revenue industry. Restaurants, department stores and clothing companies have been the earliest adopters of card-linking. Story by Bill Hardekopf for LowCards.com.
Why Starbucks Wants You to Load Up Its Prepaid Visa Debit Card
Starbucks executives often state their goal of building a digital ecosystem using Starbucks Rewards “stars” as a type of digital currency. Last week, the company announced another step toward this dream at its annual shareholder meeting. Late this year, consumers will be able to use a prepaid debit card, which the company is developing with JP Morgan Chase to earn stars wherever the “Visa” symbol is accepted for payment. The reloadable card, dubbed “Starbucks Rewards Prepaid Card from Chase,” is first and foremost an attempt to increase Starbucks’ brand visibility and loyalty. Customers will be able to apply for the card on Starbucks.com and, even more conveniently, apply from within the company’s mobile app. Chase has confirmed that the rewards card will be free of some of the fees often associated with prepaid debit cards, including loading, overdraft, and monthly service fees. It also firms up the relationship with Chase, which has all but become Starbucks’ primary transaction vendor for its ecosystem. The company recently named Chase to succeed Square as its transaction processor for non-mobile payments. Chase is also charged with rolling out chip-enabled payment terminals in Starbucks’ stores. Story by Asit Sharma for The Motley Fool.
What’s on the Horizon for Credit Unions and Credit Cards?
The way credit and debit card issuers who offer loyalty programs view rewards is also coming under scrutiny. Loyalty programs offered by issuers have existed since the 1980’s, with the primary goal to keep one issuer’s card at the “top of wallet” over other cards. Every time you reach in your wallet, you have a choice of which card to use for that transaction – your credit union wants you to choose their cards, and offering points per dollar spent, which can later be used to purchase gifts, travel, or in some cases, cash back, is the incentive offered to you to use their card. However, mobile apps, Apple/Samsung/Android Pay, and online wallets, have radically changed the dynamics or staying “top of wallet”, since you no longer pull out your physical wallet and make a choice at the POS. Instead, you enter card credentials when you first set up your wallet, and the first card you load becomes the default. The incentive to stay “top of wallet” needs to change to incentive to stay “top of phone”, with the overall goal still the same – choose one issuer’s card over another when making a transaction. Story by Lou Grilli for Credit Union Insight.
Payroll Debit Cards Could be Costly to Employers
How do you pay your employees? Although payroll debit cards can be attractive to employers and employees, employers should proceed with caution when utilizing them. Employers cannot require their employees to receive wages on a payroll card; other alternatives, such as paper checks and direct deposit, must also be offered, and these requirements vary from state to state. The federal Electronic Fund Transfer Act (EFTA) and Regulation E govern payroll card accounts and provide certain protections to employees paid via payroll card. Payroll debit cards may benefit employees who do not maintain bank accounts, but hidden fees and poorly designed payroll card policies and procedures also could harm those employees–who are often low-income workers–and lead to problems for their employers. Story by Jami K. Suver for The National Law Review.
LowCards.com Weekly Credit Card Rate Report
Based on the 1,000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.80 percent, identical to last week. Six months ago, the average was 14.55 percent. One year ago, the average was 14.47 percent.