Credit Card Update April 22

April 22, 2011, Written By sitemanager

CREDIT CARD DEFAULTS, LATE PAYMENTS DROP IN MARCH
More Americans paid their credit card bills on time in March, a positive
sign for the banking industry in a month that has proved volatile over the
past few years. The top six credit card companies, Chase, Bank of America,
Citibank, Capital One, Discover and American Express, all said defaults and
late payments fell in March. Overall, delinquency and charge-offs are at
their lowest points since mid-2008. Industry-wide, the charge-off rate
peaked in the 2010 second quarter at 10.9% of balances, according to the
Federal Reserve. By the fourth quarter of 2010, the latest period for which
data is available, the rate had dropped to 7.7%. In the two years prior to
the recession, it averaged 3.82%.

WHY NEW PARENTS CAN’T GET CREDIT
Babies bring many surprises, but here’s one you might not expect: new
parents can find it hard, if not impossible, to take out new loans if they
are still on leave from work. That means moms on maternity leave can get
denied when they apply for mortgages or, soon, even new credit cards. The
reason for these policies is pretty simple: lenders don’t want to approve
loans for borrowers who can’t afford them, and if you’re not currently
earning any income–or if you’re earning a lot less than usual because
you’re on leave–it looks like you can’t afford the loan.

Story by Kimberly Palmer for US News and World Report

ALL ABOUT YOUR UNUSED REWARD POINTS
The value of the frequent-flier miles, hotel rewards, credit card points and
other loyalty program currency that Americans earned in 2010 was about $48
billion, according to a new joint study from Colloquy, a loyalty marketing
research company, and Swift Exchange, a new company aiming to make it easier
to blend and spend points from various programs. And that doesn’t include
cash discounts that grocers and other retailers often offer. Now, try to
figure out how many points will ultimately go unredeemed. The answer? Nearly
one-third, the companies figure. This is a sad state of affairs given the
money at stake. The average household earns $622 a year in miles and points
and such, so missing out on a third of that means that over $200 has gone to
waste. The average household has 18 loyalty program memberships.

Story by Ron Lieber for The New York Times

ATTRACTIVE REWARDS RETURN FOR CERTAIN CARDHOLDERS
The past three years have been a roller coaster ride for most credit
cardholders. New federal regulations and financial reforms have been passed
to supposedly benefit consumers, but issuers have made up for lost revenue
by countering with increased fees and higher interest rates. It seems most
credit cardholders may actually be worse off after all these new
“protections”. Unless you are a consumer with an excellent credit score.
These consumers are being offered some very attractive perks as issuers
fiercely compete for their business. It has been several years since banks
dressed up their credit cards in generous rewards to attract the attention
and applications of potential cardholders. Maybe this is another sign that
lending is returning back to normal, at least for the top segment of
borrowers. Issuers are competing again and using the best reward offers we’ve
seen since 2008.

ROCK BAND CAMP WITH CITI REWARD POINTS
Are you a rock star wannabe? If you’re a Citibank customer, you can attend
adult rock band camp by cashing in your rewards points. Members of Citi’s
Thank You rewards program can now sign up for camp by using around 385,000
points. Of course, that takes a lot of spending since rewards members accrue
one point for every dollar they spend. Customers also have the option of
using a combination of reward points and cash, with the typical camp session
costing around $3,000. At the camps, Citi customers will be divided into
small groups to work with real live rock stars, including Phil Collen of Def Leppard,
Sammy Hagar, Dave Navarro of Nine Inch Nails and Chad Smith of the Red Hot
Chili Peppers.

Story by Blake Ellis for CNN

SMALLER LENDERS STRUGGLE TO SURVIVE
The factors that propelled quarterly earnings at J.P. Morgan Chase & Co.
this week aren’t doing much to help smaller institutions struggling to stay
afloat. For some, like Birmingham, Ala.-based Superior Bancorp, time may be
running out. Large institutions, some of which were clobbered during the
financial crisis but are now enjoying profit growth, have an array of
disparate businesses from credit cards to investment banking. Strong
performance in one division can be used to offset troubles in another.
Regional banks typically have fewer rabbits in their hats. Many still are
wrestling with the fallout from credit that they extended to borrowers
before the financial crisis, even though loan delinquencies and defaults are
declining. They are concentrated in fewer geographic areas and have fewer
lines of business to cushion them.

Story by Robin Sidel for the Wall Street Journal

CITI: IS THERE SUNLIGHT AT THE OTHER END OF THE TOXIC POOL?
Citi’s North American operations showed some positives: losses from North
American credit cards dropped (net credit losses dropped 33%). But the
company is having trouble growing its loans. Average loans for Citi-branded
credit cards were down 7% year over year. And the bank is also losing other
sources of cheap money: total interest-bearing deposits fell 1% in the U.S.,
versus 4% growth internationally. Total retail banking accounts in North
America dropped 4%. Net interest revenue in regional consumer banking fell
11%.

Story by Avi Salzman for Barron’s

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The information contained within this article was accurate as of April 22, 2011. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.