LowCards.com Weekly Credit Card Update–May 12, 2014
Target CEO Steps Aside After Massive Data Breach
A Christmas-season cyberattack on Target’s computer systems did more than expose massive amounts of customer credit card data to potential fraud. It also turned up the heat on deeper troubles that simmered under the six-year tenure of Chief Executive Gregg Steinhafel, who stepped down on Monday. Among the missteps: An expansion into Canada that verges on disaster and an e-commerce strategy that hasn’t gained momentum. But perhaps most of all, the cheap-chic “Tar-zhay” formula isn’t bringing in customers the way it used to. By the time Target’s board met April 17, the “accumulation of challenges and frustrations” among directors and Mr. Steinhafel alike became “really high,” according to one person familiar with the situation. By last week, these frustrations had turned into a focus on a “fresh start at the top.” Story by Paul Ziobro, Monica Langley, and Joann S. Lublin for The Wall Street Journal.
When Credit Card Charges Keep Slipping In
Consumers have a responsibility to watch out for funky charges on their credit card statements. So Carol Kearns has no one to blame but herself for allowing an unwanted roadside-assistance service to keep billing her for nine years. But that doesn’t let the company, AutoVantage, off the hook. Attorneys general nationwide have accused AutoVantage of duping people into signing up for its service and then sticking them with recurring fees. Nor does it speak well of Kearns’ card issuer, Capital One, which kept automatically renewing the AutoVantage subscription even though her card number changed multiple times over the years because of unrelated incidents of fraud. Story by David Lazarus for the Los Angeles Times.
A Dark Corner in Chinese Shadow Banking: Cash Via Credit Cards
Need cash in a hurry in China? You can use your credit card for that–just don’t tell the central bank. With the Chinese economy slowing, businesses of all stripes are finding themselves short of cash. The banks are proving more reluctant to lend to small and private firms, companies are delaying payment of goods they bought on credit, and the slowing economy means that sales just aren’t as good as they used to be. So companies are turning to their credit cards. Some people with point-of-sales machines will offer to swipe your card, racking up a sale, but instead of handing over the goods, they give you cash. They take a small fee, and you get–for all intents and purposes–a bank loan. Story by Dinny McMahon and Grace Zhu for The Wall Street Journal.
Consumer Credit Card Use Rebounds
Americans added to their credit card tabs in March after a cautious start to the year, a sign that consumer spending is accelerating heading into the spring. The amount of outstanding revolving credit, mostly credit-card debt, rose at a seasonally adjusted annual rate of 1.6%, to $856.68 billion, a Federal Reserve report released Wednesday said. The gain comes after credit card debt contracted at a 3.8% rate the prior month. The rising debt load suggests shoppers are confident enough in their job and income prospects to extend themselves in order to make additional purchases. Still, the amount revolving credit outstanding shrunk during the first quarter of 2014, reflecting in part unusually cold weather that slowed purchases of consumer goods. Story by Eric Morath for The Wall Street Journal.
Turn “Off” Your Credit Cards to Prevent Fraud
Don’t you wish you were able to turn off your credit cards when you don’t need them so that no one else could use them? And then back on when you were ready to make a purchase? With OnDot CardControl, that may not be such a far-fetched idea. OnDot Systems is a startup company based in San Jose, California that offers a remote control for your credit cards. The app allows you to control which of your credit cards are active at any given time directly from your phone or tablet. It also allows you to set spending limits on the cards and restrict the location where the cards can be used. Story by Bill Hardekopf for LowCards.com.
Banks in U.S. Eased Commercial Loan Policies, Fed Says
Banks in the U.S. eased policies for loans to businesses including real estate companies during the first quarter amid stronger demand for credit, according to a Federal Reserve survey. For households, banks reported easier standards on consumer credit card and auto loans. In consumer lending, “several” domestic banks were more willing to make consumer loans compared with the previous quarter, the central bank said. Several large banks increased credit card limits. Story by Jeff Kearns for Bloomberg Businessweek.
CFPB Proposes Rule to Promote More Effective Privacy Disclosures
The Consumer Financial Protection Bureau proposed a rule to promote more effective privacy disclosures from financial institutions to their customers. The rule would allow companies that limit their consumer data-sharing and meet other requirements to post their annual privacy notices online rather than delivering them individually. “Consumers need clear information about how their personal information is being used by financial institutions,” said CFPB Director Richard Cordray. “This proposal would make it easier for consumers to find and access privacy policies, while also making it cheaper for industry to provide disclosures.” Story by the CFPB.
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 14.49 percent, identical to last week. Six months ago, the average was 14.46 percent. One year ago, the average was 14.25 percent.