LowCards.com Weekly Credit Card Update–June 20, 2014
Suze Orman’s Approved Prepaid Debit Cards are Quietly Discontinued
Suze Orman is quietly getting out of the payments business. Starting July 1, Ms. Orman’s Approved card, a prepaid debit card aimed at budget-challenged consumers, will no longer work, according to a letter from Bancorp Bank, her partner on the product. Bancorp is encouraging cardholders to spend all the money on their cards before that date. After that, it will send checks to people for any remaining balances. Story by Ron Lieber for The New York Times.
GE Capital to Pay $225 Million for Discriminatory and Deceptive Credit Card Practices
The CFPB and the Justice Department ordered GE Capital Retail Bank, General Electric’s retail credit card business, to pay $225 million in relief to consumers harmed by illegal and discriminatory credit card practices. This represented the largest credit card discrimination settlement in U.S. history. The bank, which recently changed its name to Synchrony Bank, must refund $56 million to nearly 638,000 consumers who were subjected to deceptive marketing practices of add-on products and services on their credit card accounts. In addition, the bank has to pay another $169 million to approximately 108,000 Spanish-speaking consumers for excluding them from offers to help them with their debt based on their national origin. This was the sixth bank or credit card issuer fined by the CFPB for illegal credit card practices. Story by Bill Hardekopf for LowCards.com.
Videos Aimed at Aiding Credit Card Fraud Abundant on YouTube
The pitch for credit card fraud plays alongside an ad for American Express credit cards–which means that the apparent cybercriminal who posted the video may profit not just on the stolen data but also on the ads purchased by the credit card companies that had their data stolen. The odd set-up, it turns out, is not unique. YouTube is littered with videos marketing stolen credit cards and other tools for criminal ventures. Many liven up their pitches with unauthorized samplings from famous musicians. Story by Robert Faturechi and Shan Li for the Los Angeles Times.
American Express Revs Up Pursuit of the Masses
AmEx once boasted a customer base that was the envy of the industry, with its iconic green charge cards and lavish perks. But growing competition for affluent customers from issuers like Chase is driving the New York company to court consumers with a card it pitches as an alternative to checking accounts for people who don’t use banks or want a cheaper option. After spending 18 months tinkering with Bluebird’s formula and adding new features, AmEx is revving up its marketing machine. In addition to a summertime campaign for discounted gasoline, the company financed a documentary film that premiered this month about unbanked consumers. The film was produced by David Guggenheim, who also made “Waiting for Superman” and “An Inconvenient Truth.” Story by Robin Sidel for The Wall Street Journal.
Russia To Ease Demands on Visa and MasterCard
Russia will substantially lower collateral demands imposed recently on card giants Visa and MasterCard that aim to prevent a repeat of payment problems caused by U.S. sanctions. Some Russian banks faced disruption to bank-card payments with Visa and MasterCard in March after the U.S. enforced sanctions in response to Russia’s annexation of Crimea. To prevent it happening again, the Russian Parliament passed a law forcing the two companies to keep hundreds of millions of dollars at the Bank of Russia as collateral against any future freeze. Story by Andrey Ostroukh for The Wall Street Journal.
CFPB Requests Information on Mobile Financial Services
The Consumer Financial Protection Bureau is inquiring about mobile financial services in an effort to create better security on mobile banking platforms and to reach out to unbanked consumers. According to the CFPB, 74,000 customers a day used mobile banking last year to transfer money, check balances and make payments. The organization wants to make sure that a program with this much use is secured properly. Story by Lynn Oldshue for LowCards.com.
SunTrust Bank Reaches Settlement of Almost $1B with Mortgage Customers
SunTrust Banks Inc. reached a $968 million agreement with state and federal officials to settle allegations the bank misled its mortgage customers. The Atlanta-based lender is the third-largest bank by deposit market share in Memphis, behind First Tennessee Bank and Regions Bank, according to the Federal Deposit Insurance Corp. SunTrust first disclosed the settlement amount in an October regulatory filing. The bank has agreed to make a cash payment of $418 million and to offer $550 million in consumer assistance. Story by Jennifer Backer in The Commercial Appeal.
Which Plastic Is the Best? Debit Cards, Credit Cards or Prepaid Cards?
Major financial institutions, like most restaurants, understand the need to offer different card offerings to meet the varied circumstances and tastes of their customers. As a result, many now offer three card options beyond traditional credit cards. Consumers can choose between secured credit cards, conventional debit cards and prepaid debit cards. Banks are tailoring their cards to meet the needs of different market segments, offering secured cards to young people and others eager to build good credit, issuing conventional debit cards to most checking account customers, and providing prepaid services to those who do not have bank accounts or who have other reasons for wanting prepaid cards. Here’s a bit more about each option. Story by Curtis Arnold for the Huffington Post.
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 14.52 percent, slightly higher than last week’s 14.50 percent. Six months ago, the average was 14.46 percent. One year ago, the average was 14.30 percent.