LowCards.com Weekly Credit Card Update–September 23, 2016
Prepaid Cards’ Growing Popularity Catches Regulator’s Eye
Prepaid cards, which started out as simple gift cards from retail stores, have morphed into popular financial-management tools with functions that rival bank checking accounts. Now regulators are playing catch-up, with plans to roll out a rule this fall that would bring oversight of the sector closer to regulations covering banks. The coming rule from the Consumer Financial Protection Bureau marks the federal government’s first comprehensive effort to police the market, which caters to tens of millions of Americans, many of whom are lower-income and have either no or limited access to regular bank accounts. The products-known as general purpose reloadable, or GPR, cards-carry at least one of the major payment card network brands such as Visa or American Express and can be used to make purchases at various stores and withdraw cash at ATMs. This year, nearly $300 billion is expected to be loaded onto GPR cards, almost double the amount in 2010. Story by Yuka Hayashi for The Wall Street Journal.
Walmart’s Showdown with Visa in Canada Deepens
Shoppers who slap down Visa credit cards to pay for their purchases at some Walmart stores in Canada may be in for a shock. The big-box chain will stop accepting Visa credit cards at its 16 stores in Manitoba province, the latest escalation in a tiff over credit card transaction fees. Although still limited to a fraction of Walmart’s vast network, the fight reflects a deepening divide over the transaction fees Visa charges in Canada, where Walmart operates more than 400 stores. The boycott started this summer with Walmart’s three stores in Thunder Bay, Ontario. Story by Nathan Bomey for USA Today.
Subprime Credit Card Limits Reach 5-Year High
Total credit card limits for the subprime market reached a five-year high during the first half of 2016. These limits are now at $6.4 billion for subprime and deep subprime cardholders. This follows the trend the Federal Reserve Bank of New York noted in August. Their survey found nearly half of subprime borrowers now have a credit card, which is quickly approaching pre-recession levels (60%). Despite the increasing card limits and card availability for subprime borrowers-defined as those with credit scores below 620-the delinquency rates for credit cards has declined since 2011. The delinquency rates for subprime borrowers during the past 12 months are up 7%, but over a five-year span, they have actually dropped 6%. Overall delinquency rates across all markets have declined by 43% from the second quarter of 2011 to the second quarter of 2016. Story by John Oldshue for LowCards.com.
What The First Credit Cards Were Like
By today’s standards, we’d call it a charge card because it required you to pay in full at the end of each month. You couldn’t carry a balance from one month to the next. The Diners Club card was similar to many of its forerunners, the metal charge-plates issued by department stores, oil companies and other retailers at the time. Even by the late 1950s, Diners Club still had no penalty or interest charges for payments made after 30 days. The company’s main source of revenue was the 7% fee-called interchange-charged to merchants on each transaction. When American Express launched its first card in 1958, it also required payment in full at the end of the month. These cards offered a way to consolidate entertainment expenses but weren’t meant to enable cardholders to pay down balances over time. Story by Claire Tsosie for Forbes.
3 Simple Ways Retirees Can Control Their Credit Card Debt
One of the biggest threats facing retirees’ finances is not that they’ve saved too little–it’s that they owe too much. While the average credit card debt among all U.S. households is about $5,700, that number jumps to $6,351 for those age 65 and over (soaring to $6,876 for recent retirees between ages 65 and 69, compared with just $5,638 for those 75 and up). A retiree’s credit card debt on average is more than double the maximum monthly Social Security payment. So it’s not surprising that credit card debt is a huge financial concern for seniors, right behind medical bills and just ahead of paying for utilities. If you’re feeling weighed down by credit card bills, here are three simple ways to get that balance under control while saving some money in the process. Story by Sharon Epperson and Katie Young for CNBC.
Your American Express Credit Card Can Now Message You on Facebook
Credit cards can already technically text or email you via spending alerts, so it shouldn’t come as too much of a surprise that one issuer is now able to message its cardholders on Facebook. American Express officially launched its Facebook Messenger bot late last week. The bot, previewed at the Cannes Film Festival back in June, is designed to monitor an enrolled cardholder’s credit card purchases and then message them about relevant benefits, reminders and services. Story on Credit.com.
5 Million Brits Had to Cancel Credit Cards Due to Fraud Last Year
Nearly five million Britons had to cancel their bank cards last year as cyber fraud continues to rise. A new survey has suggested the scale of fraud in the UK with one in ten adults having to replace their credit or debit cards after a cyber-attack, identify theft or card cloning. According to the survey seen by The Times the average loss to bank fraud was Ł475, meaning that more than Ł2 billion was stolen in total. Story by Jessica Duncan for The Daily Mail.
Stripe Offers Instant Payouts to All Contractors
Stripe, the startup that competes against the likes of PayPal’s Braintree and WePay to provide payment services to digital businesses, is taking the wraps off its newest product to set it apart from the rest of the pack. Stripe is launching Instant Payouts, a service tailored specifically for marketplaces to pay their contractors “within minutes” to a contractor’s existing Visa or MasterCard debit card. Story by Ingrid Lunden for Tech Crunch.
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 14.66 percent, identical to last week. Six month ago, the average was 14.80 percent. One year ago, the average was 14.55 percent.