LowCards Weekly Credit Card Update February 3

BANK OF AMERICA TESTS OUT NEW DEAL SERVICE
Bank of America thinks it has a better way for consumers to save money other than those daily deal sites like Groupon. Bank of America is offering discounts to its customers based on their previous spending patterns. The offers will be made through the bank’s website. Customers must use their Bank of America debit or credit cards to get the savings. Those in on the deals will get the discounts, not when they buy, but in the form of cash payments once a month. The so-called BankAmeriDeals will begin testing the service this week with its employees in North Carolina.

Story by Michael Finney for ABC7

http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=8519169

YOU PROBABLY GOT LESS CREDIT CARD JUNK MAIL LAST MONTH
Credit card offer mailings fell year-over-year in December, the first such decline in 2 years, according to Citigroup analysts. But competition remains intense to find new customers, with the bank noting mailings for all of 2011 jumped 37% to nearly 5 billion, citing data from Mintel Comperemedia. Last month’s decline shows “large card issuers are still acting rational and not getting overly aggressive,” says Citi. Bank of America and Wells Fargo were the only two of 10 banks specified by the Mintel data that increased mailings in December compared to November.

Story by Andrew Johnson for the Wall Street Journal

http://blogs.wsj.com/deals/2012/01/26/you-probably-got-less-credit-card-junk-mail-last-month/?KEYWORDS=%22credit+cards%22

HACKER’S DEMO SHOWS HOW EASILY CARDS CAN BE READ THROUGH CLOTHES AND WALLETS
Pull out your credit card and flip it over. If the back is marked with the words “PayPass,” “Blink,” that triangle of nested arcs that serves as the universal symbol for wireless data or a few other obscure icons, Kristin Paget says it’s vulnerable to an uber-stealthy form of pickpocketing. As she showed on a Washington D.C. stage Saturday, she can read all the data she needs to make a fraudulent transaction off that card with just a few hundred dollars worth of equipment, and do it invisibly through your wallet, purse, or pocket.

Story by Andy Greenberg for Forbes

http://www.forbes.com/sites/andygreenberg/2012/01/30/hackers-demo-shows-how-easily-credit-cards-can-be-read-through-clothes-and-wallets/

SHOULD YOU BREAK UP WITH YOUR CREDIT CARD?
Credit cards are like relationships. It’s sometimes hard to break up and the split may hurt you more than the other party. While it may feel good to cut up that credit card, losing the available credit could hurt your credit score and raise the costs of future loans. Closing a credit card account that you have paid off or don’t use seems like a logical thing to do. However, the “credit utilization ratio” is one of the major factors in calculating your credit score, accounting for approximately 30 percent of your score. Closing an account can have a dramatic effect on that ratio. When it comes to your credit cards, the credit utilization is the ratio of all your credit card balances to the credit limits available on your cards. Having a low ratio–not having much debt but a lot of available credit–is beneficial to your credit score. A high ratio may indicate that you may be a risk for default. A healthy credit utilization ratio is anything below 30 percent.

http://www.lowcards.com/blog/should-you-break-up-with-your-credit-card-3121/

IRS CLARIFIES ITS STAND WHETHER FREQUENT FLIER MILES ARE TAXABLE
Consumers will owe taxes on miles they receive for opening a bank account, but miles they get for making purchases on credit cards or for taking a trip are tax-free, the federal agency says.

Story by David Lazarus for the Los Angeles Times

http://www.latimes.com/business/la-fi-lazarus-20120131,0,1163342.column?page=1

MASTERCARD JOINS PUSH ON NEW CARD TECHNOLOGY
MasterCard is joining rival Visa in pushing merchants to upgrade their checkout systems to handle high-tech credit and debit cards that store information inside a computer chip rather than a magnetic stripe, in a move that could hasten adoption of the technology. Such technology is common in foreign countries, where banks for years have issued chip-enabled cards to their customers to cut down on fraud and meet regional standards or country regulations. It has yet to catch on in the U.S. market. Both MasterCard’s and Visa’s plans also require the banks that handle card transactions for retailers, known as merchant acquirers, be equipped to handle chip-based cards by April 2013. MasterCard’s move follows initiatives announced last year by Visa, which is trying to boost merchant adoption by allowing certain retailers to avoid some annual security assessments while eventually shifting the liability for card fraud onto the shoulders of merchants who don’t upgrade. Visa’s security incentive is set to kick in this October and its liability shift is scheduled for October 2015.

Story by Andrew Johnson for the Wall Street Journal

http://online.wsj.com/article/SB10001424052970204740904577193491695404570.html?KEYWORDS=%22credit+cards%22

CONSUMER FINANCIAL PROTECTION BUREAU COMPLAINTS TALLIED FOR 2011
The new Consumer Financial Protection Bureau has received about 12,000 complaints over the past six months from consumers who had problems with their credit cards and mortgages, according to the CFPB’s semi-annual report to Congress. In the half year ending Dec. 31, 2011, the agency received 9,307 credit card complaints and 2,326 mortgage complaints through its website, by phone, and through referrals from other federal regulators. There is no clear winning category among credit card complaints. “Billing disputes” edged out “Identity theft/fraud/embezzlement,” but collectively accounted for about a quarter of all complaints.

Story by Ben Hallman for the Huffington Post

http://www.huffingtonpost.com/2012/01/31/cfpb-consumer-financial-protection-bureau-complaints_n_1244755.html

MORE MIDDLE-INCOME BORROWERS SEEK DEBT HELP
More middle-income consumers are seeking help through formal debt-reduction plans, according to an Atlanta-based credit counseling outfit. In 2007, the average income for clients entering debt-management plans through the nonprofit Credability was $43,000, and their average credit card debt was roughly $22,000. Last year, though, their average income was $54,000, and their average credit card debt was $24,000. A spokesman said the housing debacle and continued high unemployment rates were probably behind the trend. Middle-income borrowers are more likely to own homes, but they are now unable to borrow against the equity of their houses, because home values have fallen and lending requirements have tightened. They must increasingly turn to credit cards for emergency spending.

 

Story by Ann Carrns for the New York Times

http://bucks.blogs.nytimes.com/2012/01/30/more-middle-income-borrowers-seek-debt-help/

BANKS TO USE SOCIAL MEDIA DATA FOR LOANS AND PROCESSING
So far, banks have limited their social media exploits to marketing and customer service experiments on Twitter and FaceBook. But financial institutions and their product vendors are aware their own customers’ data
has potential implications for credit decisions, relationship pricing, even collections. MovenBank plans to use information from Twitter, FaceBook and other social networking sites not just for underwriting, but to price the entire relationship. It has developed a scoring product it calls CRED, which is a combination of traditional scoring elements and a consumer’s social media “street credibility. Among the things the score will examine are a customer’s timeliness in paying bills and tendency to have negative balances, as well as standing in social networks, and the ability to sign up friends for the bank. Banks and others can use social media data on the back end to manage the collections process for consumer loans. That includes “skip tracing,” whereby a collections department tries to get more up-to-date information on a delinquent debtor. That might include plugging known customer information into social media sites such as FaceBook, LinkedIn, and Twitter.

Story in American Banker

http://www.americanbanker.com/issues/177_18/movenbank-social-media-lending-decisions-brett-king-1046083-1.html?pg=1

TRYING TO PURGE OLD CREDIT CARD DATA? NOT SO FAST
A colleague recently closed her online account at Blockbuster, which last year was acquired by Dish Network. Because of all the news in recent months about hacked accounts, she thought that deleting her credit card information from the defunct account might be a good idea. But when she went to Blockbuster’s Web site, she found she couldn’t do that online. So she e-mailed customer service, which e-mailed her a response that said, in effect: Not possible. “The information we have on file for you is kept for accounting purposes and cannot be removed,” the e-mail said in part.

Story by Ann Carrns for the New York Times

http://bucks.blogs.nytimes.com/2012/01/31/trying-to-purge-old-credit-card-data-not-so-fast/

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 14.25 percent, slightly higher than the 14.17% last week. Six months ago, the average was 14.15 percent. One year ago, the average was 14.08 percent.

http://www.lowcards.com/blog/category/weekly-credit-card-rate-report/

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