LowCards.com Weekly Credit Card Update–December 18, 2015
How the Fed’s Interest Rate Hike Could Hit Your Wallet
The Federal Reserve increased interest rates Wednesday afternoon for the first time in nearly a decade. As expected, the Fed announced that it would increase its benchmark rate by one quarter of a percentage point. Investors and economists have been speculating about the moment, which could have huge implications for the economy and for consumers, for years. The central bank has kept its benchmark interest rate near zero since December 2008 in an effort to stimulate the economy and restore confidence in financial markets. By keeping rates low, the Fed made it cheaper for consumers to borrow money, encouraging them to spend more and increasing demand for goods. And driving down interest rates on low-risk products like bonds and savings accounts was supposed to encourage people to invest their money in stocks and other markets. Story by Jonnelle Marte and Thad Moore for the Washington Post.
Colleges Are Hiding Their Credit Card Deals With Banks
Colleges that team up with financial institutions to market credit cards to students are supposed to be upfront about their deals. But 85% of colleges in a recent investigation weren’t, according to an annual report on campus credit cards released today by the Consumer Financial Protection Bureau. Hundreds of thousands of students attend colleges that have agreements to co-sponsor credit card accounts. Agreements can be made with a college or, increasingly, through a related organization, such as university alumni associations. Credit card companies get access to a new population of consumers, while colleges generally get a share of the revenue generated from the cards. But research has found many of these credit card accounts (and similar agreements for debit accounts) have higher fees than students would get if they went outside the campus card. Story by Kaitlin Mulhere for Time.
Safeway Investigates Possible Card Skimming
Safeway is investigating the possibility of thieves placing card skimmers at several grocery stores. A report claims that two stores in the Bay Area could have been impacted. According to the Krebs on Security blog, banks began to notice their customers had their accounts emptied after shopping at some Safeway stores. The alleged skimming reportedly began in September. Bank industry sources told Krebs the fraud may involve Safeway stores in Castro Valley and Menlo Park. Safeway stores in several Colorado locations may also be affected. Story by CBS News.
Why Department Store Clerks are so Pushy about Credit Cards
It’s become a familiar part of the department store checkout experience–you deliver your items to the nice cashier, and the nice cashier delivers you a sales pitch about the store’s credit card. As millions of shoppers descend upon retailers this holiday season, don’t be surprised if the folks behind the register seem a little pushier than usual. They’re likely being rewarded for their efforts.If a customer’s application is approved, they may get a 10% or 15% discount on their purchase, but they also walk away with one of the highest interest rate credit cards on the market (Macy’s charges a flat APR of 24.5%). If their application is declined, they walk away with a hard inquiry on their credit report and nothing to show for it. Workers, on the other hand, have nothing to lose. They get credit whether the customer’s application is approved or not. At Kohl’s stores, employees are rewarded with $1 to $2 per credit card application they process. Rather than getting a coupon, the cash is added to their paycheck, a former human resource manager who worked at Kohl’s for nine years told Yahoo Finance. Story by Mandi Woodruff for Yahoo Finance.
Data Breaches Threaten Customer Loyalty
Nearly two-thirds of consumers said they would be unlikely to do business with a company that had experienced a breach where financial information was stolen, according to a global survey by Gemalto. 49% would no longer use a company if personal information had been stolen. Six in ten people believe security threats increase during the holiday season, and 18% believe they are likely to be a victim of a data breach this time of year. Just one in four consumers believe companies take the protection and security of customer data seriously. Only 38% of the employed respondents feel their employer takes the protection and security of employee data seriously. Most of the respondents (69%) said it is a company’s responsibility to protect data–not the customer’s. Story by Bill Hardekopf for LowCards.com.
Giving Gift Cards This Year? Beware These Scams
Seven in 10 people plan on purchasing at least one gift card this season, an end-of-year-surge that will bring sales of the most-convenient of presents to more than $131 billion for the year, according to the National Retail Federation. But shoppers aren’t the only ones interested in gift cards–thieves are also cashing in on the trend with a variety of sophisticated scams that can drain your gift card before you’ve even bought it. No longer considered the last refuge of the holiday procrastinator, gift cards now extend far beyond favorite department stores or restaurants. But as the variety and personalization of gift cards have grown, so have the scams. Story by Lucy Bayly for NBC News.
Mobile Banking Apps a Risk for Security
McAfee Labs has revealed the biggest threats to security this year and into next, claiming mobile banking apps, macro and fileless malware are most prevalent. The company released the information in its newly-released November 2015 Threats Report, which identified the biggest threats to security in the third quarter of 2015. Researchers at the lab explored mobile threats, saying poor mobile app practices, such as disregarding back-end service provider guidance, means user data is exposed to services in the cloud. Mobile banking apps are particularly targeted here, which is even more concerning considering the sensitivity of the data such apps generate. Story by Clare Hopping for IT Pro.
Start-up Strikes Mobile Payment Deal in China
A British online payments start-up has a signed a 10-year deal with a division of China’s only credit card company to bring its technology to the world’s second-largest economy. Powa Technologies has formed a joint venture with UnionPay Network Payments, a division of China UnionPay, to launch PowaTag UnionPay, an app that will let people pay for items via their mobiles in stores. It works by allowing a smartphone user to scan a code, pick up a Bluetooth signal or even register a sound via their device. The item which is then scanned can be purchased through Powa’s app via mobile. The startup, which raised a massive $80 million last year, valuing it around $2.7 billion, is trying to tap into the trend of so-called “online to offline (O2O)”–where shoppers search for products online then buy them in a physical store. The O2O market grew 80 percent in first half of 2015 and is worth around $47 billion, according to China’s Commerce Department. Story by Arjun Kharpal for CNBC.
MasterCard to Provide MasterPass Service to FreshDirect
MasterCard announced that the online fresh food grocer, FreshDirect will now use the digital payments platform, MasterPass, of the former. Customers of FreshDirect can now expect safe online and in-app payment process by via MasterPass. FreshDirect customers can now place their order online and make payments by clicking just once. This will surely make the payment process easier of FreshDirect customers, who will be relieved of the hassle of entering delivery and billing information. Story in Zacks.
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 14.62 percent, identical to last week. Six months ago, the average was 14.60 percent. One year ago, the average was 14.46 percent.