LowCards.com Weekly Credit Card Update–March 21, 2014
Consumers Not Powerless in Face of Credit Card Fraud
Most card companies already have custom alerts and other features that not enough consumers use. Then there’s something that all cards should have but most don’t–an on/off switch accessible from a mobile app that could keep most fraud from happening. Finally, there are the microchip cards that most of the rest of the civilized world uses but that barely exist in the United States so far. Story by Ron Lieber for the New York Times.
Borrowers Paying Mortgages Over Credit Cards Again
As the housing market and hiring continue to recover, consumers are making their mortgage payments a priority again. A growing number of borrowers are paying off their home loans before their credit card debts, reversing a trend first seen in September 2008, according to a TransUnion study that examined the delinquency rates of borrowers with mortgages, auto loans and credit card debt. Story by Les Christie for CNN Money.
Retailers Late to 2015 Credit Card Deadline Face Increased Fraud Risk
The October 2015 roll out of new chip-based credit card technology for U.S. retailers and payment processors might seem far off, but merchants who come late to the party could find themselves increasingly at risk of card fraud. Interested parties may already be falling behind. Updating and certifying retailer systems to accept the new cards and getting banks to issue new cards to consumers could take a year or more. After October 2015, liability for fraudulent transactions will shift to whichever party has the lesser technology. That means a merchant can still a run swipe and signature transaction, but could be held liable for the costs of fraud if the consumer is using a chip-enabled card. Story by Steve Norton for The Wall Street Journal.
Millennial Come of Age with Less
It’s no secret that many members of the so-called millennial generation are struggling financially. They may be the first cohort to end up worse off than their parents, according to a new survey by the Investor Education Foundation of the Financial Industry Regulatory Authority. In looking into the finances of millennials, Ameriprise Financial found in a multigenerational survey that an overwhelming majority of them feel stretched by their car payments, credit cards and other bills. Only 57 percent with access to a workplace retirement plan are contributing enough money to take full advantage of the employer match. Story by Michelle Singletary for the Philly.com.
With Credit Card Data in Play, Who Hacks the Hackers?
Not even hackers are immune to hacking. Websites that were used to sell credit card data stolen in the massive holiday data breach at Target were themselves shut down by unknown culprits Monday. “Hi subhumans and miscreants, your fraud site is gone now. Go away,” reads the first line of a message posted on rescator.so and rescator.cm, two sites that have been used as clearinghouses for troves of credit card data stolen from retailers like Target, Neiman Marcus and Sally Beauty Holdings Inc. in recent months. Story by Paul Ziobro for The Wall Street Journal.
Baby Boomers Turn to Reverse Mortgages
U.S. baby boomers desperate for retirement income are increasingly turning back to a financial product that, after the housing bust, had been left for dead: the reverse mortgage. A reverse mortgage allows retirees to borrow against that, and they don’t have to make any payments on the loan until they move or die. Borrowers took out $15.3 billion of the loans in 2013, an increase of 20 percent from the year before, according to industry publication Inside Mortgage Finance. The record year was 2009, when there were $30.21 billion of reverse mortgage loans made. Story by Peter Rudegeair and Michelle Conlin for Reuters.
U.S. Bank Creates Problem for Consumers with New Debit Cards
U.S. Bank has started sending out new debit cards to its customers as a result of recent data breaches at major retailers. Cardholders have just two days to activate their new cards before the old ones are terminated. This could cause major issues for patrons who are away on vacation, have problems receiving their mail, or who simply take a few days to open their mail. Those who rely on their card for all of their money and transactions may soon have no way to access their funds. Story by Lynn Oldshue for LowCards.com.
CFPB’s Spending Skyrockets Nearly 50 Percent
Spending at the Consumer Financial Protection Bureau went up nearly 50 percent from 2012 to last year, according to the latest audited financial statement for the bureau’s parent agency, the Federal Reserve. This may do little to quash concerns of critics and some in Congress that the agency needs tighter controls on its spending and additional oversight by those on Capitol Hill. The financial statement, which was audited by the Washington office of Deloitte & Touche, shows that in the budget year ending Dec. 31, total spending for the CFPB increased from $385 million in 2012 to $563 million, a 46 percent hike. Story by Richard Pollock for the Washington Examiner.
Big Data Used to Catch Fraudulent Tax Returns
Identity thieves are stealing billions of dollars a year through fraudulent tax refunds–and the IRS isn’t the only target. The 43 states that collect an income tax are also being flooded with these bogus returns. Georgia, Indiana and Louisiana now contract with LexisNexis Risk Solutions to screen all of their returns against its massive database of public information. When LexisNexis finds a suspicious return, it’s flagged and set aside. A letter is automatically sent to the taxpayer instructing them to go online and answer a few simple multiple choice questions to verify their identity. The questions cover information an identity thief wouldn’t likely know. For example: Which of these addresses did you live at or which one of these cars did you own? Story by Herb Weisbaum for CNBC.
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 14.47 percent, slightly lower than last week’s 14.48 percent. Six months ago, the average was 14.39 percent. One year ago, the average was 14.30 percent.