LowCards.com Weekly Credit Card Update–April 18, 2014
States Probing Massive Data Breach of Social Security Numbers
In what could be one of the biggest data breaches in history, the federal government and authorities in several states are investigating the criminal sale of Social Security numbers, bank account data and other personal information for up to 200 million U.S. citizens. The breach is the latest demonstration of the growing vulnerability of personal information in the digital age, and is particularly troubling because of the involvement of Social Security numbers. Story by Steve Johnson of the San Jose Mercury News.
Proposed Senate Bill Mandates Free Annual Credit Scores
A proposed bill in the United States Senate would mandate all consumers have access to free annual credit scores. The Stop Errors in Credit Use and Reporting (SECURE) Act is designed to reduce the problems consumers experience through errors in their scores. This is similar to the service currently offered through AnnualCreditReport.com, where consumers can see their credit reports from all three credit bureaus for free once a year. However, consumers must pay to see their credit scores on this site. That would change under the SECURE Act. Story by Bill Hardekopf for LowCards.com.
Target Breach Spurs Retail Rush to Accept Tougher Credit Cards
Many companies are behind schedule in updating their systems to comply with a chip-based smart card standard known as EMV. Credit card networks have set an October 2015 deadline for most U.S. merchants to upgrade their payment systems. Merchant Warehouse, which processes credit and debit card transactions for 80,000 U.S. merchants, projects that only about 60 percent of its clients’ locations will be ready to accept chip-based cards by the deadline. More than half of U.S. merchants will miss the cutoff, said Richard Crone, chief executive officer of payments advisory firm Crone Consulting. One reason for the delay is the upgrade’s high cost: $500 to $1,000 per payment terminal. Retailers are also concerned that the switch will slow checkout times and that it remains unclear how the EMV software will work with debit cards. Some of the biggest laggards are grocery stores and quick-service restaurants, many of which have to change entire payment processes in addition to technology. Some big retailers, including Wal-Mart, Kroger and Target, have pushed ahead with the upgrade. Story by Olga Kharif and Bianca Vázquez Toness for Bloomberg.
Customer Data Leaked at Korea’s Number One Credit Card Company
Yet another huge credit card company in Korea has failed to protect its clients’ personal information. Financial sources said Friday that the data of some 35-thousand Shinhan Card customers has been leaked. The information includes credit card numbers and passwords for the company’s loyalty cards. Since many clients use the same passwords for their credit and loyalty cards, this data breach has the potential to lead to mass credit card fraud. Story by Emily F. Wang for Arirang News.
Big Credit Card Issuers Defeat Collusion Lawsuit
Consumers suffered a setback as three big credit card issuers won the dismissal of U.S. lawsuits accusing them of colluding to require that disputes be settled in arbitration rather than class action lawsuits. U.S. District Judge William Pauley in Manhattan said cardholders failed to show that American Express, Citigroup and Discover conspired to violate the Sherman antitrust law. Class action litigation can allow consumers to pool resources and obtain greater recoveries at lower cost than individual arbitrations. Story by Jonathan Stempel for Reuters.
Is Your Credit Card Interest Rate Above 20%?
If you carry a balance on your credit card, then you know how oppressive the interest rate can be–in many instances, exceeding 20%. But why is this? How is it possible banks can get away with charging such usurious rates? In short, they have no other choice. The decision to charge such high rates for credit cards balances is justified by the data. If you don’t want to accrue the cost, don’t carry a balance. Second, banks with large credit card portfolios have different risk profiles than those that don’t. We saw this in the last recession, with respect to both Bank of America and Citigroup’s performances, and we’ll see it in the next downturn. Story by John Maxfield for The Motley Fool.
JP Morgan Profits Are Weaker Than Expected
JPMorgan Chase posted far weaker-than-expected quarterly profit as uncertainty about the U.S. economy weighed on investor trading volumes and consumer borrowing. Most of the bank’s big businesses, including commercial lending and credit cards, delivered lower profits. But the bank is not responding by dialing up its risk-taking in commercial lending, and it views falling revenue in its bond trading business as part of a business cycle instead of a symptom of a broad-based and lasting decline in fixed-income trading. By David Henry and Tanya Agrawal For MSN Money.
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 14.46 percent, slightly above last week’s average of 14.45 percent. Six months ago, the average was 14.40 percent. One year ago, the average was 14.28 percent.