LowCards.com Weekly Credit Card Update–June 10, 2016
Consumer Credit Growth Slows in April as Shoppers Reined in Credit Card Use
Consumer credit growth slowed in April after reaching a 15-year high the previous month as consumers reined in credit-card usage. Total consumer credit increased $13.4 billion in April, the Federal Reserve said Tuesday. That’s below the $18 billion median estimate of economists surveyed by Bloomberg. Revolving credit, mostly credit card spending, edged up just $1.7 billion after surging $11 billion the previous month. Nonrevolving credit, largely auto and student loans, grew $11.7 billion. Story by Athena Cao for USA Today.
England to Launch New Plastic Money with Enhanced Security
“Paper or plastic?” Who would have thought that question would ever apply to currency? In three months, the Bank of England will launch a new £5 note made from thin, flexible plastic, said to be more secure and more durable than traditional paper money. The “New Fiver,” as it has been coined, is printed on polymer, which is naturally resistant to dirt and moisture. This is said to make the note last 2.5 times longer than the current £5 note, making it more environmentally friendly. The longer a note can stay in circulation, the fewer notes the bank has to print. Once the notes have finally exceeded their lifetime, they will be recycled. Story by Lynn Oldshue for LowCards.com.
Sanders Goldmine: 3 Million Credit Cards on File
Bernie Sanders will leave behind a trove of 2.5 million credit card numbers for the party’s donation system. According to Politico, the Vermont senator has helped amass a mountain of digital data the Democratic party can use in subsequent elections. A nonprofit called ActBlue has served as the donation platform for Sanders and other Democrats running for office, and it has data on each of the 2.5 million donors who have given money to Sanders’ presidential campaign. ActBlue, reports Politico, now has 3 million credit cards on file. What that means is it’s easier for people to donate again thanks to single-click donating. Instead of having to fill out an online form with a credit card number, the user’s information is saved in the database. Story by Jason Devaney for News Max.
1 in 3 Cosigners for Auto Loans or Credit Cards Get Stuck With the Bill
About 17% of Americans have, at one time or another, cosigned on a loan or credit card for someone else. Most often the cosigner is an adult over the age of 50 helping a child or stepchild get an auto loan. The bad news is that 38% of cosigners had to pay some or all the loan or credit card bill because the primary borrower failed to pay. The cost to a cosigner extends beyond the unpaid debt itself. 28% of cosigners experienced a drop in their credit scores because the person for whom they cosigned paid late or not at all. And more than a quarter (26%) said the cosigning experience damaged their relationship with the person from whom they were cosigners. Story by Paul Ausick for 24/7 Wall Street.
Card Readers Allow Oklahoma Highway Patrol to Seize Suspects’ Money
State police in Oklahoma have begun using a device that can seize money on prepaid cards. Electronic Recovery and Access to Data (ERAD) card readers can also document and check the balance on credit, debit, or prepaid cards, and freeze funds. Developed in 2012, the card readers have allowed state and local police to seize more than $1 million during field tests, the Department of Homeland Security said in a report last year. The devices have now been moved to the commercial market. If you are suspected of criminal activity, the Oklahoma Highway Patrol can use ERAD to scan your cards and take money from prepaid cards without a warrant or arrest. The state police began using 16 of the readers last month. Story by Kate Baggaley for Popular Science.
Would-be Apple Pay Rival CurrentC Closes Beta, Future Uncertain
CurrentC, a mobile payments app that once aimed to take on Apple Pay, Android Pay and others, is shutting down its beta program, deactivating users’ accounts, and not yet commenting on if or when it will return to the market as a consumer-facing payments application. The news, announced on the CurrentC website this week, follows earlier signs of troubles for the retailer-backed app which laid off 30 employees earlier this year, while also announcing that it was postponing its plans for a nationwide launch. The app was backed by a consortium of big-name retailers, Merchant Customer Exchange (MCX), and was originally meant to rival other mobile payment systems like Apple Pay. MCX partners had included Walmart, Target, CVS, Best Buy and many other national retailers. Story by Sarah Perez for Tech Crunch.
How the Fed’s Timing Will Impact Market Returns and Credit Card Rates
The timing of when the Federal Reserve will raise interest rates again will impact consumers with outstanding credit card and student loans. May’s weak employment report means the odds that the Fed will raise rates at this month’s meeting are extremely low. A lackluster economy will not likely encourage rate hikes soon although the central bankers have hinted at future increases later this year. The postponement in raising rates gives consumers another opportunity to take advantage of paying down their current debt with zero or low interest rate balance transfer offers, purchase homes with mortgage rates under 4% or refinance their current adjustable rate mortgage. Story by Ellen Chang for The Street.
New Credit Card Scrutiny Sends Indonesians Back to Cash
Indonesia’s plan to track all credit card transactions in a bid to crack down on rampant tax evasion is pushing people back to cash, stifling government efforts to track illicit money flows. A new government decree requiring credit card providers to submit transaction details, including customer and merchant identities–to the tax office as of May 31 appears to be spooking consumers with card activity falling in April. The return to paper currency in the already heavily cash-based economy is a temporary setback not only for the government’s drive to boost tax revenues but also its fight against money laundering, corruption and terrorism finance. Story by Gayatri Suroyo and Fransiska Nangoy for Reuters.
Visa Launches Card Management App for FSIs
Visa has launched an issuer-branded mobile commerce solution that enables financial institutions to offer their own mobile app to customers with card management services, with the aim of strengthening their Visa credit, debit and prepaid card offerings. Through the mobile app, dubbed Visa Digital Commerce App, issuers can offer services such as real-time account balance information, card controls, alerts that inform accountholders about recent transactions or fraud concerns, and innovative token services that bring greater security to contactless payments. As a hosted service, the app simplifies the delivery of a broad array of card management features and provides a roadmap for issuers to rapidly deploy new features and enhancements. Story in FinTech Innovations.
Here’s How Facebook Messenger Will Change Banking
The Facebook Messenger platform opens many doors for easier, better digital interactions by enabling businesses to embed codes in chat conversations. Businesses can now obtain user messages, translate them into action requests, and send back automatically generated or manually-typed-by-human responses to the users. This is a faster, simpler, and richer experience than mobile app interactions, which require users to navigate through a mobile app, click on different links, load new pages, and wait for confirmation. With Facebook Messenger, I can just type “Send $200 to Jack Nielson” in a message to my bank. By looking at my list of payees, my bank will know who Jack Nielson is (if it doesn’t know, it can ask for more information) and which account the money is coming from (if it can’t decide, it can ask again). Of course, some technologies must be built to make sure that the correct action is taken upon receiving a user’s message, but such programming challenges will easily be overcome over time. Story by Bijan Shahrokhi for Venture Beat.
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 14.71 percent, slightly lower than last week’s average of 14.72 percent. Six months ago, the average was 14.62 percent. One year ago, the average was 14.60 percent.