LowCards.com Weekly Credit Card Update–April 14, 2017

April 14, 2017, Written By Lynn Oldshue

America’s Credit Card Tab Hits $1 Trillion
Credit card debt breached the $1 trillion threshold in the U.S., joining auto loans and student debt in crossing that level, and hitting its highest mark since the nation’s last recession. The new data from the Federal Reserve marks the latest sign of a growing appetite for household debt. Rising consumer borrowing is often a positive sign for the U.S. economy as it typically means consumers are spending more on big-ticket items, such as cars, and smaller purchases often charged on cards. And while some are concerned about auto lending to risky borrowers and defaults on student loans, the quality of most credit card debt remains strong. New Federal Reserve data released Friday shows that U.S. consumers now owe $1.0004 trillion on credit cards, up 6.2% from a year ago and 0.3% from January. It is also the highest amount since January 2009. Story by AnnaMaria Andiotis for The Wall Street Journal

This Is How Credit Card Companies Hauled in $163 Billion in 2016
According to industry research organization R.K. Hammer, credit card fee and interest income topped $163 billion in 2016. Credit card companies make money off cardholders in a wide range of ways, and their income has been experiencing solid growth for years. Fee income rose 6% year over year in 2016 and is expected to jump 6.5% in 2017. Here’s a breakdown of how cards generated that $163 billion in 2016 through fees and interest: Interest income: $63.4 billion. Interchange income: $42.4 billion. Cash advance fees: $26.6 billion. Annual fees: $12.5 billion. Penalty fees: $12 billion. Enhancement income: $6.3 billion. Story by Selena Maranjian for The Motley Fool

Wells Fargo’s Credit Card and Checking Businesses are in Freefall
Banking customers are still steering clear of the Wells Fargo wagon. The scandal-ridden bank admitted Thursday that it saw drastic declines in new applications for credit cards and checking accounts, two key products that were at the center of Wells’ cross-selling controversy. Credit card applications plunged by 42 percent, to 200,000, during the first three months of the year, the bank said in its earnings release. New checking account applications fell by 35 percent, to 400,000. Earlier this week, the bank put out its own report blaming Stumpf and the former head of retail banking, Carrie Tolstedt. The board clawed back $75 million in compensation from the disgraced duo. Story by Kevin Dugan for the New York Post

Nearly a Third of Consumers Don’t Redeem Credit Card Points
What’s the point of having a credit card with rewards if you don’t use them? Yet 31 percent of credit cardholders have never redeemed their rewards, according to a new Bankrate.com report. The thing is, card rewards don’t usually gain value over time. In fact, the opposite could happen because, over time, companies may require more points or miles for the same perks. The best move is to use your rewards regularly. The report did find that 38 percent of card holders have used rewards within the past six months. About half of card holders take cash for their rewards. Airline tickets were a distance second at 17 percent followed by gift cards at 12 percent. Story by Mark Williams for The Columbus Dispatch

More Evidence Americans are Becoming Obsessed with Putting Everything on Credit
It’s more likely that the last time you bought a pack of gum or a can or soda, you used a credit card. People like their credit cards so much they’re using them even for the tiniest purchases, according to a new survey released Monday. Among people with credit cards, 17% said they use them to buy items in brick-and-mortar stores that cost less than $5, up from 11% last year. After a lull in the wake of the Great Recession, credit cards are once again being used with increased frequency. The Federal Reserve reported last week that collective credit card debt in the U.S. had reached $1 trillion. Story by Maria La Magna for MarketWatch

FAFSA Data Breach Affected 100,000 Taxpayers
An issue with the data retrieval tool for the Free Application for Federal Student Aid (FAFSA) may have left 100,000 taxpayers at risk of identity theft. The Department of Education and the IRS suspended the tool in mid-March after uncovering some security concerns, and that suspension will remain in effect through the 2017 application season. The data retrieval tool pulls data from the IRS, so financial aid applicants can complete their FAFSA’s quickly and easily. A set of cybercriminals tapped into the program and used it to gather information for fake tax returns. Nearly 8,000 refund checks were sent out for these fraudulent returns, totaling $30 million. The IRS was able to catch 52,000 refunds before they were processed and an additional 14,000 before they were sent out. Story by John Oldshue for LowCards.com

How to Make a Bundle with Credit Cards
You don’t need to be “The Points Guy” to make hundreds–even thousands—of dollars a year with credit card rewards programs. But you do need to be a person who pays off his or her credit card balance every month. In an effort to win wallet-share in an increasingly competitive market, credit card companies are providing some of the best deals in history to those willing to spend on the right rewards card. These days, offers range from bonuses worth as much as $600 in cash to deals that provide free museum visits and access to concerts just for cardholders. However, as quickly becomes obvious to anyone looking for the best rewards cards, the value of the deal is in the eye of the beholder. Story by Kathy Kristof for CBS MoneyWatch

Survey Finds Strong Preference for Paypal vs. Credit Cards
Credit Suisse’s User survey found PayPal to be more popular than credit and debit cards for online purchases in all geographies (excluding China), with 78% using PayPal vs. 48% using credit cards and 45% using debit cards. The margin was even larger for cross-border purchases (61% PayPal, 15% credit cards). Bank funding was cited as the most common way to fund PayPal accounts, averaging 75% of users globally and 68% in the US vs. 25% and 44% credit card funding globally and in the US, respectively. Story in Smart Stock News

United Airlines’ Customers Cut Up Their Loyalty Cards After Passenger Removal Video
United Airlines customers outraged over the passenger removal video are literally cutting ties with the airline. While some social media users took to Twitter to call for a full-on boycott of United, others posted photos of their cut-up United MileagePlus credit cards-a loyalty program that’s otherwise been highly lucrative for the airline. United’s credit card partnership with Chase has become an increasingly important part of its operations, according to Stifel airline analyst Joseph DeNardi. The airline makes a profit by selling miles to the bank at a high price. Chase then distributes those miles to its customers, who pay an annual fee for the card. Story by Lucinda Shen for Fortune

The Mere Tilt of Your Phone Could Cost You Security
The latest vulnerability lurking in your smartphone–that gadget with the keys to credit cards and a mountain of private information–may rest in how you hold it. Or at least the tiny movements it picks up while you type on it. How the GPS, accelerometer, gyroscope and other miniaturised wonders monitor the movement of the phone could reveal the Personal Identification Numbers, or PINs, and passwords you punch in. Researchers at New Castle University in the United Kingdom have analysed the information revealed simply by how you move your phone. With 70 per cent accuracy in the first guess, and 100 per cent accuracy by the fifth guess, the researchers say the way users tap in a PIN or password might reveal to malicious hackers what they’ve just typed. Story by Scott Canon for Technology

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 15.25 percent, slightly higher than last week’s average of 15.21 percent. Six months ago, the average was 14.61 percent. One year ago, the average was 14.77 percent.