LowCards.com Weekly Credit Card Update–April 21, 2017

April 21, 2017, Written By Lynn Oldshue

Mastercard Debuts A Credit Card With A Fingerprint Sensor To Fight Fraud
Swipe-to-pay, then chip-and-PIN. What next, credit cards with fingerprint sensors? Turns out that’s Mastercard’s latest invention, a new credit card with an integrated fingerprint sensor, which aims to fight in-store fraud. The card, currently under trial in South Africa, includes sensor is embedded in plastic of the credit card, allowing customers to authorize a payment with a fingerprint, rather than a PIN code or a signature. The payments giant said Thursday that the new biometric credit card will work on existing chip-and-PIN readers and won’t require store owners and businesses to buy any new hardware; though older magnetic stripe-only terminals will not be compatible. Story by Zack Whittaker for ZD Net

Major Changes Coming To How Your Credit Score Is Calculated
The math behind your credit score is getting an overhaul, with changes big enough that they might alter the behavior of both cautious spenders as well as riskier borrowers. Most notably for those with high scores: Abiding by the golden rule of “don’t close your credit card accounts” may now hurt your standing. On the other side, those with low scores may benefit from the removal of civil judgments, medical debts and tax liens as factors. The new method is being implemented later this year by VantageScore, a company created by the credit bureaus Experian, TransUnion and Equifax. It’s not as well-known as Fair Isaac Corp., whose FICO score is used for the vast majority of mortgages. But VantageScore handled 8 billion account applications last year, so if you applied for a credit card, that score was likely used to approve or deny you. Story for CNBC

AmEx’s Richer Rewards, Marketing Fuel Revenue After Costco Loss
American Express Co. is showing there’s life beyond Costco. The largest U.S. credit card issuer by purchases led the Dow Jones Industrial Average higher Thursday after reporting surprisingly strong first-quarter revenue a day earlier—evidence that sweeter rewards and a marketing campaign can help spur spending and blunt last year’s loss of a partnership with the warehouse retailer. AmEx shares rose 2.9 percent. Excluding Costco Wholesale Corp.’s contribution to year-earlier results, revenue rose 6.2 percent – an acceleration from the fourth-quarter’s 5 percent growth rate. Chief Executive Officer Ken Chenault stepped up spending on marketing last year and has sweetened rewards to keep customers after JPMorgan Chase introduced its Sapphire Reserve card in August, causing a temporary increase in attrition at AmEx. Those efforts, as well as a broader restructuring, seek to reinvigorate AmEx after its decision to part ways with Costco sparked the lender’s worst stock slump since the financial crisis. Story by Jennifer Surane for Bloomberg

Which Airline Credit Cards Can Save You From Getting Bumped?
Getting bumped from a flight can be a trying experience, as evidenced by the viral video of a passenger being removed from a United Airlines flight. While the situation hardly ever gets that extreme, many airlines overbook flights and getting bumped is a very real possibility for air travelers. If passengers want to keep their seats, having an airline-branded credit card can help. While having a certain card won’t directly help keep you on a plane, having elite frequent flier status often can, and many cards help holders attain that status. The big three U.S. airlines—United, American and Delta—have similar policies on bumping, which take frequent flier status into account. But their branded airline cards vary in their ability to help you earn elite status. Here’s a closer look at the policies of America’s three biggest airlines. Story by Myles Ma for MarketWatch

This New Luxury Card Competes With Amex Platinum And Chase Sapphire Reserve
Move over, Chase Sapphire Reserve, Citi Prestige and American Express Platinum. There’s a new, flashy travel credit card coming. U.S. Bank announced Thursday a new credit card, with an even longer name: the U.S. Bank Altitude Reserve Visa Infinite Card. New cardholders will get a bonus of 50,000 points when they sign up and spend $4,500 in the card’s first 90 days. Points are worth about 1.5 cents, when redeemed for travel, which makes the sign-up bonus worth $750 in travel credits. Cardholders also get a $325 annual travel credit, which is easy to cash in on: Consumers don’t have to be redeem them with certain airlines or hotel chains, but receive an automatic reimbursement when they make $325 in purchases on airlines, hotels, car rental companies, taxis, limousines, passenger trains and cruise lines.  More than 900,000 people signed up for Chase Sapphire Reserve in the fall of 2016 alone. It offered a 100,000-point sign-up bonus when it launched, which it later reduced to 50,000. In response, American Express this spring boosted its Platinum sign-up bonus from 40,000 to 60,000 points. The U.S. Bank card even looks similar to those cards, with a minimalist design with little writing on its front. It comes in metal, as both Chase and American Express’s cards do. Story by Maria LaMagna for MarketWatch

Why So Many Credit Cards Are From Delaware
Thumb through the credit card offers filling your mailbox, and you might notice a theme: Many have a Delaware return address. That’s no coincidence. Delaware is home to the credit card businesses of Chase, Discover and Barclaycard U.S., according to the Federal Deposit Insurance Corp.  Bank of America and Citi also maintain certain card operations there. Together, those issuers represent about half of the U.S. credit card market. Meanwhile, Delaware residents account for only 0.3% of the U.S. population. What’s behind the credit card industry’s love affair with Delaware? It all started with a court decision almost 40 years ago. Story by Claire Tsosie for Nerd Wallet

2016 InterContinental Hotels Breach Much Worse than Believed
In February, InterContinental Hotels Group reported they had suffered a data breach between August and December, 2016 that affected 12 locations. IHG, which is the parent company of Candlewood Suites, Crowne Plaza, Holiday Inn and Kimpton Hotels and Resorts, has now said in a statement the number is actually closer to 1,200. The hotel chain first learned of the incident in late December and hired cybersecurity professionals to help them investigate the situation. They discovered that cybercriminals had installed malware on the hotels’ payment card processing servers, which allowed the hackers to steal credit card holder names, numbers and internal verification codes. Story by Bill Hardekopf for LowCards.com

Bad Credit Card Loans Begin To Creep Up At Discover
Discover Financial Services is seeing its loan charge-offs move up meaningfully after several years of unusually low losses from customers who don’t repay their credit card loans. The loan-loss rate in February topped 3 percent. It was the first time in five years that Discover’s monthly charge-offs hit that level. To be sure, that figure remains more than manageable for Discover and in fact is on the low end of its annual write-offs historically. But Discover has for years been more cautious than many of its peers about the borrowers it approves and has enjoyed lower loan losses as a result. The difference now is that Discover also is enjoying unusually high loan growth. More borrowers are expected to default as a period of what analysts believe are unsustainably low charge-off levels ends. That raises concerns that this time Discover’s losses will mirror or even exceed the industry’s-whatever those turn out to be-as the credit cycle churns. Story by Steve Daniels for Crain’s Chicago Business

New York May Force Uber to Allow Credit Card Tips
Many New Yorkers use Uber because you don’t have to worry after you plug in your starting point and destination. You don’t have to worry about payment, and you really don’t have to worry about tipping. However, things might change over the next few months; New York City’s Taxi and Limousine Commission is proposing Uber and other credit card payment ride services allow the option to tip electronically. A petition created by the Independent Drivers Guild has gained 11,000 signatures in favor of electronic tipping as they strongly feel it will help drivers make a living wage. In October alone, rides used Uber 16 million times in New York. With numbers like that, it is understandable that drivers would want the opportunity to snag a little more money per ride. Still, many riders use Uber in part due to the convenience of not having to worry about tipping on a payment. Story by Max Goldberg for The Drive

Square Chief Teases A Smart Debit Card
Square Cash’s virtual payment card might not be quite so virtual in the future. Company chief Jack Dorsey has teased a strange, all-black Visa debit card that Recode suspects is really a physical Square Cash card. Square seriously considered a payment card back in 2014–the company is no stranger to exploring the concept of a real-world card that draws from online funds. There’s no guarantee that Square will launch a debit card, no matter what Dorsey is carrying in his pocket. The company reportedly ditched its payment card out of a reluctance to either antagonize its partners or wade through a tangled financial industry. However, there are a few incentives to at least consider the idea. For one, Square has previously said it would like to “own both sides of the counter.” Story by Jon Fingas for Engadget

CFPB Finalizes Delay of Prepaid Rule Effective Date
The Consumer Financial Protection Bureau today finalized a six-month extension of the effective date of its final rule on covered prepaid accounts. Originally scheduled to take effect on Oct. 1, it will now go into effect on April 1, 2018. The bureau said it will also revisit two thorny implementation issues through a separate rulemaking process. These issues relate to linking credit cards to digital wallets capable of storing funds and error resolution and limits on liability for prepaid accounts that are not registered or cannot be registered. Story in the ABA Banking Journal

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, identical to last week. Six months ago, the average was 14.61 percent. One year ago, the average was 14.76 percent.