LowCards.com Weekly Credit Card Update–June 13, 2014
Credit Card Use Surges in April
American consumers threw caution to the wind in April and ran up their credit-card balances at the fastest pace in almost 13 years. The amount of outstanding revolving credit–a figure that’s mostly credit card debt–rose at a seasonally adjusted annual rate of 12.3% to $870.44 billion in April, according to a Federal Reserve report. That was the fastest rate of increase since November 2001, when annual growth was 12.33%. Overall consumer credit, including student and car loans but excluding real estate loans like mortgages, increased by $20.85 billion, or at a 10.23% annual rate. Story by Jonathan House for The Wall Street Journal.
NYC Strippers Drugged, Stole from Rich Men
It’s a tawdry tale of New York City strippers on the prowl for men with money, drinks spiked with illegal synthetic drugs and runaway credit card charges at topless clubs. Some of the men say they have little or no memory of any of it. But investigators filled in the blanks for them by announcing the arrests of four women–all described as professional strippers–and a club manager on charges including grand larceny, assault and forgery. The five were accused of teaming up to rip off a combined $200,000 from a New Jersey doctor, a banker, a hedge fund executive and a real estate attorney in a credit card scam during the last four months of 2013. Story by Tom Hays for the Associated Press.
Credit Cards Stolen from PF Chang’s
The Chinese restaurant chain P.F. Chang’s may be the latest corporation to fall victim to a security breach. P.F. Chang’s is investigating claims that thousands of credit and debit cards were stolen from its restaurants earlier this year, according to Krebs on Security. The credit card data was then sold on rescator.so, a web site that’s also linked to a security breach involving Target credit cards. Story by Aaron Smith for CNN Money.
Target Credit Card Breach Still Hurts Small Businesses
After the Target breach, banks gave millions of customers new credit cards. That’s a big problem for businesses that rely on subscriptions and monthly memberships. Some are losing significant revenue while scrambling to update customer information. Rocky Arbitell hates the sound of his gym’s scanner rejecting a membership card. Unfortunately, it’s what greets about 30 percent of people coming to work out at his Orlando, Florida business, The Gym Downtown. Many just haven’t updated their credit card numbers on file. In his office, Arbitell points to a computer screen. “That is the decline list,” he says. “That’s all the credit cards that were dishonored, declined and invalid since January, and it’s $57,000 worth of cards.” Story by Amy Kiley for MarketPlace.
The Digital Opportunity Staring Credit Cards in the Face
Credit card companies could be doing a much better job of saving us from ourselves. With consumers are going paperless in droves, a customer paying a credit bill online via a PC or a mobile app can almost always do so without ever being shown the minimum payment warning. To see the minimum payment warning, a customer would have to find and download an electronic version of the paper statement. Although the federal legislation doesn’t require it (the law focuses on monthly statements, which are central to the paper-statement world), credit card providers should post the warning where it can be easily seen. If a disclosure is important enough to be on the first page of a paper statement, it should be on the corresponding online payment page and mobile-app screen. But there’s a bigger point: The credit card companies are missing a valuable opportunity to make consumers smarter about debt. Story by Michael Luca and Chelsea Burkett for the Harvard Business Review.
AT&T Develops New Program to Help Prevent Credit Card Fraud
AT&T will pilot a new service that could help credit card companies prevent fraud. The program will let the credit card company know the current location of the accountholder based on the location of his or her phone. If that area doesn’t match the location where the credit card purchases are taking place, then the card company can choose to decline unusual transactions. The new program, known as Location Information Services, is scheduled to be available in over 150 countries. Story by Bill Hardekopf for LowCards.com.
Prodding Congress, Obama Acts to Ease Student Debt
Up to 5 million Americans struggling to make their monthly student loan payments could find relief under a program President Barack Obama expanded Monday, part of an election-year push by Democrats to paint Republicans as blocking common sense steps that could help the middle class. Dubbing it a “no-brainer,” Obama also threw his support behind legislation to let some of those same borrowers refinance their student loans at lower rates, in a move the administration said could save 25 million borrowers up to $2,000 over the life of their loans. Story by Josh Lederman 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 14.50 percent, slightly higher than last week’s 14.44 percent. Six months ago, the average was 14.47 percent. One year ago, the average was 14.30 percent.