LowCards Weekly Credit Card Update August 17
Card Swipes in Church Make Giving Easier
It hasn’t always been easy for administrators and lay leaders to get people to donate regularly and increase their contributions each year, no matter their faith. Over the last decade or so, entrepreneurs have seized on the opening and tried to automate the process. One big player is a service called ParishPay, which works with many Catholic churches and a few synagogues to help sign up worshipers to pay via credit or debit card or automatic payment from their bank accounts. Nearly 1,000 institutions have joined the service, and it claims a 20 to 30 percent increase in giving by individuals who enroll. Story by Ron Lieber for the New York Times.
Credit Card Borrowers Still Paying the Bills, Easing Concerns
Customers of the largest credit card issuers largely continued to pay their bills on time in July, bucking growing concerns that consumers are again facing financial hardship. A rash of dour economic reports in recent months has raised worries that consumers could fall behind on their debt payments, raising costs for banks that have already written off billions of dollars of soured loans since the financial crisis. Credit card lending in particular has been a bright spot for big banks since the recession ended because consumers have made paying their monthly bills a priority and been hesitant to carry large balances. That has allowed lenders to boost earnings by setting aside less money to cover potential loan losses, and it more recently led some banks to loosen their loan criteria. Story by Andrew R. Johnson for the Wall Street Journal.
How to Tell If You Have Too Many Credit Cards
Are you too plastic for your own financial good? Although there is no magic number for the number of credit cards that should be in your wallet, some key questions can help you determine whether you’re charging around town with more cards than you need. According to recent data from Experian, the average U.S. consumer has about three open and active credit cards. Whether that number is too many, too few or just enough is really a question of how one uses and manages the accounts. If you are unsure (or in denial) about your spending habits and general attitude toward credit, here are some warning signs you have more credit cards than you can handle. Story by Marilen Cawad for The Street.
Credit Card Delinquency Rate Near 18-Year Low
The delinquency rate on credit card accounts dropped during the second quarter of 2012 to one of its lowest levels since 1994. According to a TransUnion study released Tuesday, the delinquency rate–the percentage of credit card borrowers at least 90 days past due on their accounts–dropped to 0.63 percent in the second quarter from 0.73 percent in the first quarter. The low delinquency rate is especially impressive given the fact that consumers increased their overall credit card debt during this second quarter. The average credit card debt per borrower rose 5.7 percent in the past year, from $4,699 in the second quarter of 2011 to $4,971 during 2012’s second quarter. Story by Bill Hardekopf for LowCards.com
Problems Riddle Moves to Collect Credit Card Debt
The same problems that plagued the foreclosure process–and prompted a multibillion-dollar settlement with big banks–are now emerging in the debt collection practices of credit card companies. As they work through a glut of bad loans, companies like American Express, Citigroup and Discover are going to court to recoup their money. But many of the lawsuits rely on erroneous documents, incomplete records and generic testimony from witnesses, according to judges who oversee the cases. Lenders are churning out lawsuits without regard for accuracy, and improperly collecting debts from consumers. Story by Jessica Silver-Greenberg for the New York Times.
Discover Adds Google Wallet Button for Card Customers
Discover is making it easier for its credit card customers to use Google’s new pay-by-phone service. The lender said it is adding a feature to its online account website that will let customers click a button to have their credit cards automatically loaded into the Google Wallet software application. The app, which turns certain Android smartphones into payment devices, allows users to make purchases at participating retailers by tapping their phones against special payment terminals instead of swiping a plastic card. Discover operates a payments network that competes against Visa, MasterCard and American Express to process transactions. All four companies are testing a variety of new services aimed at turning consumers’ mobile devices into credit card replacements in hopes of growing their transaction volume. Research firm Gartner Inc. in May said it estimated the value of mobile-payment transactions would reach $617 billion world-wide by 2016, up from $105.9 billion in 2011. Story by Andrew R. Johnson of the Wall Street Journal.
Your Company’s Big Credit Card Problem
Small businesses are turning to consumer cards because they have more protections than business cards. Small business owners say consumer cards are better for carrying balances for longer-term business investments, because the credit lines and the interest rates are not subject to arbitrary changes, as the interest rates on business cards are. Forty-nine percent of small-business owners currently use personal cards for business, compared to 42 percent in 2009. By contrast, 59 percent of small businesses with employees used one or more business cards, down 5 percentage points from 2009, reports the National Federation of Independent Business. Story by Jeremy Quittner for Inc.
Do You Need a Mobile Wallet?
Now that a group of prominent retailers has announced a plan to embrace mobile payments, consumers are once again facing the Big Question: Namely, is it finally time to ditch that wallet? But even with a new wave of retail giants, including Wal-Mart and Target, entering the digital wallet space, consumers may still have reason to be skeptical–at least for another year or two–and to hold on to their plastic, say experts who track mobile commerce. Story by Charles Passy for SmartMoney.com.
LowCards.com Weekly Credit Card Rate Report
Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.35 percent, slightly higher than the 14.34 percent last week. Six months ago, the average was 14.24 percent. One year ago, the average was 14.14 percent.