LowCards.com Weekly Credit Card Update–October 10, 2013
Americans Cut Back on Credit Cards Again
Consumers cut back on using credit cards in August for a third consecutive month, a sign that consumers are still cautious about spending. Consumers increased their borrowing $13.6 billion in August to a seasonally adjusted $3.04 trillion. Credit card debt dropped $883 million to roughly $850 billion. The decline could hold back consumer spending, which accounts for roughly 70% of economic growth. Story by Martin Crutsinger for the Associated Press.
Why Your Credit Card Was Declined
A declined credit card can happen to anyone, no matter your income level, credit score or credit limit. Here are eight common reasons your card may be declined and some tips on how you can avoid that embarrassment. Some examples: you have exceeded your credit card limit, your card has expired, you missed a card payment, you have made a suspicious charge, your card’s security has been threatened, you have a hold on your account, you are trying to make an international payment. Story by Bill Hardekopf for LowCards.com.
Chase Pulls Plug on Credit Card Insurance Plan
Dorothy Cross, 95, has a combined balance of more than $38,000 on three Chase cards. For about a decade, she’s paid Payment Protector fees so that, after she dies, this debt won’t overwhelm what little savings she plans to leave family members. But now, after more than $16,000 in fee payments on Cross’ part, Chase says it will no longer honor its end of the bargain. Payment Protector will disappear in May 2014, and no claims will be honored after that time. Chase is acting within its rights. The contract for Payment Protector states that the company can change the terms of the deal at any time. Story by David Lazarus for the Los Angeles Times.
Judge Blocks New York State Credit Card Surcharge Law
A federal judge has ruled that a New York State law that bans merchants from imposing surcharges on customers who pay by credit card is unconstitutional. The law violates merchants’ freedom of speech. He said it prohibits them from telling customers about the extra fees they incur for accept credit cards. Story by the Associated Press.
Credit Cards Show How Regulatory Reform Can Work
Credit cards, long a target for critics of predatory financial practices, are becoming something of a poster child for how regulation can help fix things. Thanks to reforms from the 2009 CARD Act reforms, American consumers last year saved $1.5 billion on lower late fees and $2.5 billion from new restrictions on fees charged for going over your credit limit. The CFPB has taken over regulation of credit cards and mortgages. Credit cards are one of the few good-news stories in our fitful progress toward regulatory reform. Story by Darrell Delamaide for USA Today.
Young People Actually More Responsible with Credit Cards
Despite the common belief that young people are the absolute worst when it comes to credit card use, a study from Arizona State University and the Federal Reserve Bank of Richmond shows that people between the ages of 18 and 25 are among the least likely credit card users to have a “serious default.” Story by Matthew Hendley for the Phoenix New Times.
Scammers Target Utility Customers with Threats of Power Shut-Off
Fraudsters have developed a clever and all-too-successful ruse to steal money from homeowners and small businesses across the country. They pretend they’re your local power company calling to let your know your account is delinquent and unless you pay right away the service will be disconnected. They often use “spoofing technology” that makes your caller ID display the name and phone number of the local utility. Story by Herb Weisbaum for Today.
Turkey’s Banking Watchdog is Preparing to Launch a Single Limit for Credit Cards
Turkey’s banking watchdog is preparing to put a draft regulation in effect, launching a “single limit” for credit cards, just after the loan volume of Turkey’s banks exceeded 1 trillion Turkish Liras at the end of September for the first time. A consumer’s credit card limit could not exceed four times the amount of his/her monthly income during a time when credit debts have exceeded 1 trillion liras for the first time this month in line with the drafted rules. With the new rules, credit card holders will not be able to exceed the upper limit, which will be set by regulation of their monthly income. Story in Balkans.com.
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 14.40 percent, identical to last week. Six months ago, the average was 14.28 percent. One year ago, the average was 14.29 percent.