LowCards.com Weekly Credit Card Update–February 10, 2017
JPMorgan Accused of Nickel-and-Diming Jurors on Debit Cards
For some people, jury duty is a dreaded American civic obligation. Now, JPMorgan Chase is adding another unwelcome element: banking fees. In a handful of jurisdictions, the biggest U.S. bank by assets has taken over administration of the juror-compensation system, issuing debit cards instead of the age-old system of paper checks. In addition to the juror pay, the cards also come loaded with fees–for balance inquiries, for inactivity, for using non-Chase ATMs, for charges with insufficient funds and for cash or check issuance. The funds become impossible to withdraw from an ATM once the balance falls below $20, and in at least one jurisdiction–Washington, D.C.–there are no Chase branches or ATMs within 90 miles, ensuring the funds will eventually be frittered away to the bank. Story by Christian Berthelsen for Bloomberg.
Arby’s Probes Possible Data Breach of Credit Cards
Malware on cash registers at Arby’s fast food restaurants may have resulted in the breach of more than 355,000 credit and debit cards. The incident may have affected cards used at hundreds of the chain’s restaurants. Only Arby’s restaurants owned by the Atlanta, Ga.-based company were affected, not its franchises. Arby’s Restaurant Group, Inc. said it had recently launched an investigation of its payment card systems after learning of a possible data breach. The company immediately notified law enforcement and hired computer security companies to investigate. It also eradicated the malware from systems at restaurants that were impacted. Story by Elizabeth Weise for USA Today.
Discover’s Daring Bid For Credit Card Revolvers
The credit card industry has traditionally coveted customers who are known as “transactors”–high-spending individuals who tend to pay off their balances every month. Lately, though, Discover Financial Services has become an outlier in the card industry for its pursuit of the opposite kind of cardholder–so-called “revolvers,” who tend to rack up more debt, and be more inclined to carry a balance every month. The major risk of this approach is, of course, its susceptibility to account delinquencies. Yet Discover’s strategy has been a success, at least lately. The company had a strong Q4 performance, driven in large part by growth of interest revenue, from those revolvers carrying debt, and paying a price for that every month. It also helps that those debt-laden customers are less fickle than the transactors. They’re less likely than the higher rollers to simply churn and burn through their cards, signing up for bonuses, paying everything off once the minimum time limits are met, and then shelving the old cards and signing up for new ones. Story by Robert Harrow for Forbes.
58% Abandon Mobile Transactions Before Checkout
It’s not surprising that consumers around the world are using their smartphones to make purchases. However, while an overwhelming number of people have made a mobile purchase, the majority have not finalized a purchase they started. More than three fourths (78%) of people made a purchase by mobile in the previous six months, but more than half (58%) abandoned a transaction before checkout, based on a new global study. Story by Chuck Martin for Media Post.
Visa’s Newest Invention Turns Sunglasses into Credit Cards
What if your credit card took the shape of sunglasses that both protected your eyes and stayed on your face so you could leave that wallet at home? That’s the idea behind Visa WaveShades, their new sunglasses loaded with credit card technology. Visa premiered the new gear at Australia’s Laneway Festival, where the glasses were met with plenty of confusion-turned-excitement. The WaveShades are embedded with payWave technology, so they operate the same as your phone might when confronted with a contactless payment system. Considering the unwieldy shape of sunglasses, you’re less likely to lose them, and they’ll probably just be on your face most of the day anyways. The whole concept is similar to the wristband payment systems of Tomorrowland, and certainly makes for a more secure method of carrying money around in a high-theft environment. Story by Timmy Kusnierek for Your EDM.
What Consumers Really Think of Chip Credit Cards
The transition to chip credit cards took place in October 2015, so consumers have had over a year to use this relatively new technology. What do they truly think of these cards? An overwhelming percentage of consumers are comfortable with these new chip-embedded cards. In addition, while the chip cards require a longer transaction time than magnetic strip cards, a large majority of consumers felt this wait was tolerable. 80% of consumers who have tried using their chip credit cards are very or somewhat comfortable using these cards. Only 9% said they were uncomfortable. 64% of chip cardholders felt the transaction time was slower but tolerable compared to the magnetic strip transactions. 24% said it was equal in time to the magnetic strip. Only 8% felt chip cards were too slow to use. Of those that expressed any hesitation about chip cards, the two biggest concerns were the speed of the transaction (55% of concerns) and the security of these cards (39%). Story by Bill Hardekopf for LowCards.com.
Prepaid Card Companies May Get Reprieve on CFPB Rule
With Republicans dominating Congress, prepaid card providers are gearing up for a possible reprieve from a rule meant to set industry limits on areas including overdraft fees. The fees, similar to those incurred on debit card purchases that exceed the amount in a consumer’s checking account, were poised to be crimped following new federal protections completed late last year by the Consumer Financial Protection Bureau. The regulator’s rule, most of which is supposed to go into effect this October, doesn’t prohibit overdraft fees but does place limits on such fees in the first year of use. It also requires card companies to wait 30 days after consumers register their cards before allowing for overdraft charges, among other requirements. Last week, however, a resolution was introduced in the Senate banking committee to block the CFPB prepaid-card rule from going into effect. The new resolutions could have broader implications. They would forestall the CFPB’s plans to require prepaid-card companies to provide detailed fee disclosure and limits on consumer losses when cards are stolen or lost. Companies have already spent years and tens of millions of dollars preparing for stricter regulations. Story by AnnaMaria Andriotis for The Wall Street Journal.
Consumer Borrowing Grows at Slowest Pace in 6 Months
Consumers increased their borrowing in December at the slowest pace in six months, as growth in credit card usage decelerated sharply. Borrowing in the category that covers credit cards slowed to a gain of just $2.4 billion after a surge of $11.8 billion in November. It was the weakest showing since credit card debt fell last February. The big November gain in credit card debt had been viewed as a good sign at the start of the holiday shopping season. The December increase pushed total borrowing to a fresh record of $3.76 trillion. Economists believe growth in consumer credit will remain strong in 2017, reflecting low unemployment and further solid gains in employment and consumer confidence. Story by Martin Crutsinger for the Associated Press.
5 Hidden Credit Card Perks
It’s a good time to be in the market for a new credit card. Issuers are heaping on the perks to attract customers—and to keep their existing ones. But you don’t have to be a big spender to take advantage of the many benefits that come with your credit cards, and flashy sign-up bonuses aren’t the only ways customers can win. There are the basic cash back rewards programs that many cards offer, as well as hidden perks, such as rental car insurance and extended warranties, which are also available through many cards, though they aren’t as publicized. The more card issuers race against each other to nab new customers, the more perks consumers get. We tracked down a few fun benefits that are unique to a single issuer. Story by Emily Bary for Barron’s.
Debit Card For Kids Can Be Managed By Parents Via Phone
Money doesn’t grow on trees, it’s comes from parent’s smartphones! Financial startup Greenlight is planning to give kids their own cards. The catch? Parents have complete control over its use. As the name suggests, each transaction with the card requires a “greenlight” from the parents. What’s more, every time the card is used, parents get an instant notification on their phone. The Greenlight card is actually a debit card and does not require a credit check to obtain. Before use, it must be loaded up with funds, which parents can do through the Greenlight app. Where this Atlanta-based startup stands out is in the flexibility it offers parents. Unlike prepaid cards or other debit cards targeted at young people, parents can pre-approve which stores or locations where the card can be used. To top things off, parents can also decide how much the kids can spend at these places. Story by Leo Lutero for PSFK.
Consumers Have a Powerful Tool in Credit Card Chargebacks
Credit card users who feel helpless when dealing with merchants that provide shoddy goods and services should know they have a powerful tool available to them: chargebacks. A chargeback occurs when a credit card holder disputes a charge and the transaction is reversed. People tend to think of chargebacks as remedies for billing errors or fraudulent purchases. But consumers can also dispute a charge if they’re dissatisfied with the quality of merchandise, service or delivery and the merchant refuses to make things right, according to the federal Fair Credit Billing Act. Experts say that although the law hasn’t changed, the power of chargebacks has surged, to the point that banks and credit card processors typically side with consumers. Disputing a charge allows consumers to at least temporarily avoid paying without risking damage to their credit. They can also dispute paid charges from previous billing cycles. And the process has become as simple as making a few clicks from an online bank statement or taps in a bank smartphone app. Story by Gregory Karp for the Associated Press.
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 14.97 percent, identical to last week’s average. Six months ago, the average was 14.63 percent. One year ago, the average was 14.83 percent.