LowCards.com Weekly Credit Card Update–July 11, 2014
Report Says Debt Settlement Companies May Leave Customers Worse Off
Using a settlement company to help you dig out from underneath burdensome debt may sound appealing, but it may leave you worse off than when you started, according to new research. A report from the Center for Responsible Lending, a nonprofit research group, finds that consumers who sign on with for-profit debt settlement companies find their debts grow about 20 percent on average before a settlement, with no guarantee that such a settlement will be reached. Story by Ann Carrns for The New York Times.
Fliers Facing Fewer Rewards
For airline passengers, rewards programs may not seem so rewarding anymore. Two of the nation’s largest airlines, United Airlines and Delta Air Lines, have announced that in 2015, frequent flier points will be based on dollars spent on plane tickets rather than miles flown. And while another major carrier, American Airlines, has not announced any change, it is “watching the competitive environment,” said a spokeswoman. Leisure travelers like Darlene Martin may feel as though they are on the losing side of the changes. She was surprised to discover that she would earn several thousand fewer miles than she expected when she went to Delta’s website recently to see if the ticket she wanted to book to Europe next spring would bump her up to the next premier category. Story by Julie Weed for The New York Times.
U.S., AmEx Duel at Antitrust Trial Over Credit Card Fees
American Express has hindered price competition in the U.S. credit card market and prevented merchants and consumers from reaping cost savings, a lawyer for the U.S. government said on Monday during the first day of a trial in Brooklyn federal court. In an antitrust lawsuit, the U.S. Justice Department and 17 states have accused Amex of blocking credit card companies from lowering processing fees and allowing businesses to pass on savings to consumers. Story by Andrew Longstreth for Reuters.
Isis Mobile Wallet to Get New Name to Avoid Confusion with Militant Group
Isis mobile wallet service is looking to rebrand itself to avoid being mistaken for the militant group ISIS. Isis is a mobile wallet platform backed by AT&T, T-Mobile and Verizon in the United States. But the name has given rise to confusion as it gets mixed up with ISIS, an Islamic militant group that has come to prominence in Iraq and Syria. Public perception and search engine optimization factors have forced the Isis mobile wallet service to come up with a new brand name to distance itself from the terrorist group. Story by Sam Lehman for Headlines & Global News.
Growth in Credit Card Balances Cools Sharply in May
Growth of Americans’ credit card balances slowed sharply in May, a sign consumers are cautious about adding to their debt burdens. The amount of outstanding revolving credit–mainly credit card debt–rose at a seasonally adjusted annual rate of 2.5% to $872.2 billion in May, according to a Federal Reserve report. That increase is far below the 12.3% pace recorded the prior month (which was the fastest rate of growth since 2001) and instead in line with the tepid gains recorded over the past year. The data suggests April’s surge in credit card balances could have been payback for an unusually cold winter rather than a new sign of consumer confidence. Story by Eric Morath for The Wall Street Journal.
Debit Card Usage Increasing Despite Recent Data Breaches
The 2014 Debit Issuer Study from PULSE showed a consistent growth in consumer and business debit card use in 2013, despite the data breaches that have taken place in the past year. 14% of all debit cards were exposed in data breaches in 2013, compared to just 5% in 2012. But consumers continue to move to electronic payments. There are now an average 20.1 electronic transactions per month per active account, up from 19.4 a year earlier. Story by John Oldshue for LowCards.com.
Device Puts All Your Credit Cards on Your Phone
Products like Loop Pay are enabling you to use your phone to make mobile payments without carrying your credit cards. Loop ChargeCase is an iPhone case (which fits the iPhone 5 and 5s) that works in conjunction with an iPhone app to store all of your credit cards and other cards (like debit cards, gift cards and loyalty cards). The case lets you make mobile payments at any point-of-sale terminal that you would ordinarily swipe a card. Here’s where it gets interesting. You don’t actually swipe Loop, because no magnetic stripe is involved. Instead, the Loop case transmits a magnetic field that emulates the data embedded in your card’s magnetic strip. You simply need to hold the phone close to the stripe reader and activate the transaction. Story by Dave Johnson for CBS Moneywatch.
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 14.50 percent, slightly below last week’s average of 14.52 percent. Six months ago, the average was 14.48 percent. One year ago, the average was 14.34 percent.