LowCards.com Weekly Credit Card Update–April 25, 2014

April 25, 2014, Written By Lynn Oldshue
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Michaels Confirms Data Breach Affecting 2.6 Million Credit Cards
Three months after craft retailer Michaels announced it may have been the victim of a data breach, the company confirms the worst: nearly 2.6 million consumers’ credit cards are affected. In January, Michaels, a large arts and crafts chain, warned customers that the company “may have experienced a data security attack.” The company announced that sometime between May 8, 2013 and January 27, 2014 about 2.6 million or 7% of payment cards used at its stores were compromised. Story by Ashlee Kieler for the Consumerist.

Demystifying Credit Scores
One of the few positive outcomes of the 2008 financial crisis was that it helped shine a light on the importance of understanding and staying on top of your credit profile. Along with that heightened visibility, however, has come a great deal of confusion and misunderstanding — particularly around the all-important credit score. Five factors are used to determine your credit score: payment history (usually around 35 percent of your score), amount owed (30 percent), length of credit history (15 percent), newly opened credit accounts (10 percent), and types of credit used (10 percent). These five categories may be weighted differently depending on your individual circumstances. Here are a few tips for improving your credit history. Story by Jason Alderman in the Huffington Post.

The Mobile Wallet Battle Heats Up
Domino’s Pizza is now accepting payment via Google Wallet. You can pay for your pizza with your Android app. That might not sound like big news but it signals a significant move in the battle for how you make your transactions, which is shaping up to be a huge three-way fight between PayPal, Google Wallet and Apple. You store your bank and credit card information with these systems, and then really never have to deal with the account information again. If you are on a website and want to pay for something, you simply click the PayPal, Google or Apple button, and you are done. Story by Bill Hardekopf for LowCards.com.

CFPB Criticizes Student Loan Lenders for ‘Auto Defaults’
The federal government is criticizing student lenders that demand borrowers pay back their entire student loan when a cosigner dies or files for bankruptcy–even if the borrower has never missed a payment. The Consumer Financial Protection Bureau says the demand can catch borrowers off guard in a time of tragedy and doesn’t make economic sense to put borrowers into default. The CFPB said it has received more complaints from student-loan borrowers about what the regulator calls “auto defaults.” Story by Alan Zibel, Katy Stech, and AnnaMaria Andriotis for the Wall Street Journal.

Here’s How To Make Credit Cards Work For You
Are credit cards bad or good? This is far too complicated of a question for a yes or no answer, but just like everything else in life there is a right way and a wrong way to use plastic to pay for things. When is it worth it to charge things? Is it OK to carry a balance? Here are a few insights into “credit card economics” you can use to enhance your financial life. Story by Matthew Frankel for The Motley Fool.

Do You Know Your Secret Credit Scores?
That numerical expression otherwise known as the credit score is the absolute authority of your creditworthiness, right? Most of us seem to think so; every year we spend more than $1 billion to buy them, along with our credit reports. But the FICO scores and others we can buy have less value than advertised. They’re not the same ones creditors actually use to make decisions about extending a loan or credit card to you. Let’s call them secret credit scores. Here’s another reason you shouldn’t waste your money on artificial credit scores: Car dealers, cellular-service providers, credit-card issuers, insurers, retailers, and other businesses rate you up, down, and sideways using a whole slew of still other scores. (Those pesky secret credit scores, again.) Story by Jeff Blyskal for Consumer Reports.

Misfortune Leaves Student Loan Borrowers on the Hook
You have been faithfully making your student loan payment each month, and are making steady progress paying down the balance. But then your parent–who co-signed your loan–dies, or files for bankruptcy protection. All of a sudden, your lender is demanding that you repay the loan in full, even though you have never been late with a payment. Such automatic defaults are a recurring problem with private student loans, a new report from the federal Consumer Financial Protection Bureau finds. Story by Ann Carrns for The New York Times.

IRS Gave Bonuses to Employees who Owed Back Taxes. And That’s Not All
A report from the Treasury Inspector General for Tax Administration shows that between October 1, 2010 and December 31, 2012, the IRS paid $2.8 million in bonuses to employees cited in the past year for such things as drug use, making violent threats, fraudulently claiming unemployment benefits, misusing government credit cards and get this, failing to pay their taxes. The report said more than 1,100 employees who failed to pay their taxes received discretionary awards of more than $1 million in cash bonuses and more than 10,000 hours in extra paid vacation. At least 5 employees received performance awards after being disciplined for intentionally underreporting their tax liabilities for multiples years, paying taxes late and underreporting income. Story by Gail Sullivan for The Washington Post.

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 14.47 percent, slightly above last week’s average of 14.46 percent. Six months ago, the average was 14.26 percent. One year ago, the average was 14.27 percent.



The information contained within this article was accurate as of April 25, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.