LowCards Weekly Credit Card Update September 7

September 7, 2012, Written By Lynn Oldshue

Many Card Companies Dumping Credit Protection Plans
Credit card holders could soon be saying good-bye to some costly add-on products that promised peace-of-mind during a disaster, such as a job loss. And many consumer groups say good-riddance. Several consumer advocates lump credit protection plans in the category of an expensive type of insurance that most consumers don’t really need. All such offers are not dead, though, so consumers on the financial edge should move cautiously when it comes to promotions for debt protection products and consumer insurance. Story by Susan Tompor for USA Today.

Could Wells Fargo Go After Discover?
The investment bank, Susquehanna, says Wells Fargo, which doesn’t have a credit card operation of the scope of fellow big banks, should change that through buying Discover. A takeover “would marry their unique attributes, by both building upon existing strengths while solving each side’s challenges, thereby driving accretion and increased valuation,” the firm says. The investment bank says Wells Fargo could pay $46 a share–half in cash and half in stock–for a total of some $23.7 billion. Even at that price Wells Fargo could still boost earnings the first year after closing the purchase while having no impact on capital levels. Susquehanna says Wells Fargo could get close to $50 a share if a “more optimistic view of account expansion is taken.” Story by Kevin Kingsbury for the Wall Street Journal.

ING To Sell Capital One Stake for $3 Billion
Dutch financial services company ING Groep said it will sell its entire stake in Capital One Financial Corp. in a deal that will further boost its capital ratios as it seeks to repay a government bailout. ING said it will sell its stake of about 9.5% in the U.S. lender through an underwritten public offering. It said the deal is valued at about $3 billion, representing roughly $55.56 a Capital One share. The Netherlands’ largest bank by assets is in a rush to raise capital as it needs to repay a government bailout and seeks to comply with more stringent banking regulations to weather a volatile business environment. Story by Maarten Van Tartwijk for the Wall Street Journal.

Google Ups the Ante in Wallet Wars
Consumers have been slow to cut up their credit cards and turn on their mobile wallets. But this week, Google Wallet announced a string of features that let mobile wallets do things plastic credit cards don’t. Google Wallet product managers say they will provide I.D. verification so people can check in for a flight, download virtual boarding passes, and even keep their driver’s license on their mobile phone. It’s still early days for services like Google Wallet. Thousands of merchants are still not set up for mobile payments, making it more difficult for smartphone users to cut up their plastic. What’s more, consumers are still concerned about security issues. One U.K. survey found that 44% of people were reluctant to adopt mobile wallets due to fears of phone hacking. Story by Quentin Fottrell for MarketWatch.

Argentina Now Tracking Citizens’ Card Purchases
In a move that cracks down on tax evasion, the government of Argentina is now requiring every debit and credit card purchase be reported to the country’s tax authorities. In addition, the government has added a 15 percent tax surcharge on every purchase made outside the country using a debit or credit card issued by one of the country’s banks. This includes transactions made on eBay and Amazon as well as purchases made via PayPal. A significant number of citizens buy products on the Internet that can’t be found in Argentina, and this also enables consumers to avoid custom declarations. Now the government has a way of seeing what each citizen purchases. Story by Bill Hardekopf for LowCards.com.

Banks Face Suits as States Weigh Libor Issues
The scandal over global interest rates has state officials like Janet Cowell of North Carolina working intensely behind the scenes to build a case for suing the nation’s largest banks. Ms. Cowell, the state’s elected treasurer, and several of her staff members have spent the summer combing through the state’s investments trying to determine how much the state may have lost because of suspected manipulation of the London interbank offered rate, or Libor, which is used as a benchmark for trillions of dollars of financial contracts around the world. The attorneys general in Maryland, Massachusetts, New York and Connecticut have all been examining how much their states may have lost as a result of a lowered Libor. A spokeswoman for Connecticut’s attorney general said that the state’s work with New York’s attorney general “has broadened significantly over the last few weeks and we are now coordinating with a much larger group of attorneys general.” Story by Nathaniel Popper for the New York Times.

Card Giants Lead Rush to Myanmar
Myanmar inched closer to rejoining the global financial system as MasterCard said it had issued a license to one of the country’s largest banks. For a country that has no credit cards and only introduced ATMs less than a year ago, the introduction of the ubiquitous financial brand is a milestone. By giving travelers the ability to withdraw money at cash points and allowing merchants to accept credit cards issued by foreign banks, it will potentially save business people and tourists from having to carry thousands of dollars in local currency on trips to the country, as many do now. The move comes as international financial firms are lining up to get back into Myanmar, which has become arguably the world’s sexiest new frontier market. The potential prize is access to one of the world’s last undeveloped financial markets, with some 60 million residents, of whom only one million use banking services after decades of living under an oppressive regime. Millions more Myanmar citizens live overseas, creating a potentially giant remittances trade. Story by Shibani Mahtani and Patrick Barta for the Wall Street Journal.

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 14.36 percent, identical to last week. Six months ago, the average was 14.29 percent. One year ago, the average was 14.15 percent.



The information contained within this article was accurate as of September 7, 2012. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.