LowCards.com Weekly Credit Card Update–March 17, 2017
When the Fed Raises Rates, Credit Card Holders Feel It First
Credit card costs are directly tied to the prime rate, which in turn is linked to the federal funds rate. The latter is what the Fed increased Wednesday. As both these rates move higher, so will the adjustable annual interest rate on credit cards. Over all, the Fed’s increase–a quarter point–is small, and it still leaves short-term borrowing costs near historical lows. But because credit card debt is so much more expensive than other forms of credit, like a mortgage or a car loan, an already expensive way to borrow will become even more burdensome. Experts always advise paying monthly balances in full, but roughly 40 percent of consumers don’t do that. And among this group, the typical balance stands at nearly $17,000. The extra quarter-point’s impact is small for now, equaling about $42 per year on that typical balance. But if the Fed moves two more times this year, that will add another $85 annually for the typical family that carries a balance on its cards. Story by Nelson D. Schwartz for The New York Times.
Two Russian Spies Charged in Massive Yahoo Hack
Russian government spies were behind Yahoo’s notorious 2014 security breach, stealing information about more than a half billion online accounts, including those used by U.S. military officials and by employees of firms in banking, finance and transportation, federal authorities said Wednesday. The Justice Department announced the indictments of Dmitry Dokuchaev and Igor Sushchin, officers of Russia’s Federal Security Service, known as the FSB, alleging they directed and paid for the illegal collection of information in the U.S. and abroad. It is the first such criminal case to directly target Russia. The case is expected to escalate tensions between the U.S. and Russia over cybercrime and espionage. Story by Aruna Viswanatha and Robert McMillan for The Wall Street Journal.
Obama-Era Prepaid Debit Card Rules Are Now Unlikely To Kick In Until 2018
Obama-era rules targeting prepaid debit cards and mobile payment apps are now unlikely to kick in until 2018, if they survive until then at all. Republicans have signaled their intent to scrap the entire set of rules, which restrict overdraft charges, require fees to be clearly disclosed and introduced fraud protections on two fast-growing sectors of the financial industry. The rules were completed in the final months of the Obama administration, making overturning them a fairly straightforward task for Congress and the President. The Consumer Financial Protection Bureau proposed delaying implementation of the rules until 2018, saying companies need more time. The original deadline was this October, and to comply with the rules, companies that issue cards needed print up new disclosure paperwork, build new software, and even physically make new cards. Story by Matthew Zeitlin for Buzz Feed.
This Start-Up is Building a Bridge Between Banks and Legal Marijuana Sellers
The marijuana industry is picking up as legalization sweeps the country, but there are still some wrinkles to be ironed out. In particular, most banks won’t deal with weed businesses, which means they can’t take credit cards. That means buyers have to carry cash, and sellers end up with huge amounts of cash on hand. But one company thinks it’s found a way to keep both banks and legal weed businesses happy. Tokken is a secure mobile payment option coupled with identification checks that meet banks’ stringent requirements. Here’s how it works. First, a purchaser agrees to let Tokken verify they can legally purchase weed. That verification may include checking mobile carrier records, gathering bioidentification data used to log into your phone or triangulating who you are based on GPS coordinates. Once your information checks out, you can upload your credit card information to the app. When you want to buy marijuana, you simply provide a numerical code to give to the cashier. Story by Michelle Castillo for CNBC.
10 States With the Best Business Credit Scores
It’s no secret that personal credit scores are a barometer of financial strength. The better your score, the easier (and cheaper) it is to get things like a mortgage or car loan. But, did you know small business owners have a separate business credit score for their company? While personal and business credit scores are both influenced by region, new data from Nav.com reveals other factors, like local policy climate, can impact business credit scores. Nav used data from 15,500 of its small business customers to calculate the average business credit score for each state to find the top 10. Business owners with good scores will find it easier to qualify for loans and trade credit with more favorable terms. If you own a business in a northern state, your business credit score is more likely to outshine the rest of the country. Eight of the 10 states with highest average business credit scores are located where snow can regularly fly, with one “roll tide” exception. Story by Jared Proctor for Credit.com.
$14 Million in Virginia Tax Refunds Issued on Debit Cards Unclaimed
More than 100,000 Virginia taxpayers who had their tax refunds issued on prepaid debit cards never used them, leaving $14 million in refunds unclaimed. Virginia issued the prepaid cards from 2013 to 2015, in an effort to save money on paper checks. Taxpayers due refunds had the option of a direct deposit or a prepaid debit card. The program proved unpopular and was discontinued after tax year 2014. Recipients complained the cards were unwieldy and carried hidden fees. The Richmond Times-Dispatch reported Sunday 9 percent of the 1.2 million cards issued were never activated. The money is transferred into the state treasury as unclaimed property. Story by the Associated Press.
Capital One Introduces Eno, an SMS Chatbot
Capital One launched a text message-based chatbot named ‘Eno’ that can help manage your credit card and bank accounts. Eno is “one” spelled backwards. Eno works a lot like Siri or Alexa, only you interact with the assistant via SMS chat instead of just by voice . Also, unlike Siri or Alexa, Eno’s only function is to allow users to manage their Capital One bank accounts and credit cards via text message. Eno can check account balances for your Capital One credit card or checking and savings accounts; review your transaction history; remind you of upcoming due dates; tell you your available credit and credit limit; and allow you to pay your credit card bill and provide a payment history. Story by Bill Hardekopf for LowCards.com.
Four Keys to Cyber Security: Protecting Restaurants and Retailers from Data Breaches
Restaurants and retailers around the country continue to be plagued with the threat of cyber-attacks. This threat is an issue that no business owner or operator ever wants to deal with, but as the necessity for customer-friendly technology increases due to consumer preference, companies would be wise to proactively deal with this challenge ahead of time, rather than face ramifications that could negatively impact their business and customers’ privacy. A recent consumer study found that credit or debit card is also the preferred payment method for 76% of dine-in restaurant goers, especially when paying for higher-end ticket items versus smaller transactions, like a cup of coffee. All of these transactions put the money of your business and your customers at risk if you’re not using the proper technology. Here are four key steps companies can take to best support and maintain a secure place of business: become PCI compliant, protect payment info with credit card encryption, choose cloud-based systems for secure data storage , and update and evolve to stay ahead of hackers. Story by Steve Fredette for Chain Store Age.
McDonald’s Begins Testing Mobile Order & Pay Ahead of Nationwide Launch
McDonald’s began testing mobile ordering and payments on Wednesday in select U.S. markets, the first to receive the technology as part of a pilot test aimed at working out the kinks ahead of a full rollout across the U.S. and to other international markets by year’s end. Initially, mobile ordering is available in 29 restaurants in Monterey and Salinas, California, through the company’s mobile application. The test will then expand to 51 more restaurants in Spokane, Washington on March 20, McDonald’s says. By Q4 2017, McDonald’s plans to have mobile ordering live in its 14,000 U.S. restaurants. In addition, 6,000 others in Canada, the U.K., France, Germany, Australia and China will receive the technology by year’s end. Story by Sarah Perez for Tech Crunch.
India Wants to Make Credit and Debit Cards Obsolete for Payments
Ever since India invalidated much of its cash, it has been encouraging its citizens to switch to mobile wallets and other epayment solutions. Today, it took another step in pushing its citizens to embark on the cashless payment solutions–but early boomers aren’t going to like it. The Indian government has launched BharatQR Code to enable people to pay for things they purchase without swiping their plastic cards. Instead, merchants can ask shoppers to scan a QR code and make payments directly from their bank account. The penetration of payment terminals machine remain low in India, with many merchants even complaining about the cost of the device and the high transaction fee. According to the government’s own estimations, there are about 57.7 million merchants but only 1.5 million digital payment acceptance locations. With BharatQR Code, the government hopes to do away with card swipe terminals as merchants will be able to generate their own QR code that will be interoperable with all banks. Story by Manish Singh for Mashable.
Here’s How Banks Can Offer Credit Cards with Enormous Sign-Up Bonuses and Still Turn a Profit
It’s not often that a CEO will announce a $200 million loss with a hint of pride, much less that they’ll claim they wish the loss was twice as large. But that’s exactly what JPMorgan Chase CEO Jamie Dimon did in January while discussing the impact of the company’s insanely popular Chase Sapphire Reserve rewards credit card. JPMorgan isn’t the only player in the high-rewards credit card game. American Express has long offered generous sign-up bonuses and travel credits to holders of its Platinum card, as has Citigroup with its Prestige card. Story by Alex Morrell for Business Insider.
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 15.15 percent, slightly higher than last week’s average of 15.00 percent. Six months ago, the average was 14.64 percent. One year ago, the average was 14.80 percent.