Credit Card Update December 10

December 10, 2010, Written By sitemanager

WIKILEAKS CYBERWAR ON VISA AND MASTERCARD DISRUPTS CHRISTMAS SHOPPING
Anonymous hackers launched what is thought to be an unprecedented revenge attack on the websites of companies which are accused of bowing to US pressure to hinder the release of diplomatic cables on the WikiLeaks website. The websites of Visa, MasterCard and PayPal were all targeted by co-ordinated action on one of the busiest shopping days of the year. A group of “hacktivists” calling themselves Anonymous launched what they called “Operation Payback” against the firms that had began refusing to process payments to WikiLeaks last week. One payment firm said the cyber attacks had resulted in a “complete loss of service” for its clients, although MasterCard insisted its card transactions were still secure.

Their attack came after the financial giants announced that they would no longer process donations to the anti-secrecy group. A spokesman for MasterCard said the firm had seen “a service disruption” but insisted it had not been affected by “a concentrated effort to flood our corporate website with traffic”.

Story by Andy Bloxham for The Telegraph

http://www.telegraph.co.uk/news/worldnews/wikileaks/8190541/WikiLeaks-cyberwar-on-Visa-and-MasterCard-disrupts-Christmas-shopping-in-Operation-Payback.html

FED’S DUKE SAYS REGULATORS SHOULD WATCH PREPAID CREDIT CARDS
Federal Reserve Governor Elizabeth Duke said U.S. regulators need to protect consumers from differences among prepaid credit cards and other payment devices. “It will be important for regulators to monitor, over time, the effect of differences in regulation and pricing restrictions to ensure that consumers are adequately protected regardless of their payment method preferences,” Duke said today in the prepared remarks of a speech at the Philadelphia Fed. Consumers cannot be expected to know the differences between payments made using prepaid cards, which are subject to different regulations and fee restrictions based in part on their issuers and type, Duke said during speech at a conference on consumer credit. About one-third of consumers reported having a prepaid card of some type, Duke said, citing preliminary estimates from the Federal Reserve Bank of Boston’s 2009 Survey of Consumer Payment Choice.

Story by Alex Kowalksi for Bloomberg

http://www.bloomberg.com/news/2010-12-02/fed-s-duke-says-regulators-should-watch-prepaid-credit-cards.html

CREDIT CARDS AT RISK FROM HIGH-TECH PICKPOCKETS?
It’s supposed to make paying for things faster and easier–just wave your credit or debit card over a scanner and you’ve paid. But now some worry that radio frequency identification (RFID) technology is also making it easier for crooks to rip you off. Security expert Walt Augustinowicz took a stroll along Beale Street in Memphis where, as witnessed by CBS Affiliate WREG, he was able to swipe the credit card information from passers-by. Using just an off-the-shelf card reader he bought online for less than $100 and a Netbook computer, Augustinowicz explained, he could swipe credit card numbers, expiration dates, and in some cases, even people’s names. People who thought there was no way their pocket could be picked without laying a hand on them, soon learned they were wrong.

http://www.cbsnews.com/stories/2010/12/03/tech/main7114331.shtml

TIPPING WITH A CREDIT CARD OR DEBIT CARD
Many of us don’t think twice when we pay for dinner with a credit or debit card and add a couple dollars on the tip line. But what happens to that tip? Tipping policies vary by restaurant and not all restaurants give the total tip to the waiter or waitress. Fees paid to processors such as Visa, MasterCard, or American Express can also reduce the tip because some restaurants deduct the processing fee from tips charged to credit cards. This fee can be split between the restaurant and the server, or can cost up to 3% if the server has to pay the total fee. Deducting this fee from the tip may seem unfair to the server, but some restaurants view servers as an independent contractor and processing fees are part of their cost of business.

https://www.lowcards.com/blog/tipping-with-a-credit-card-or-debit-card-1646/

CREDIT CARD DEBT FALLS FOR 26TH CONSECUTIVE MONTH
The Federal Reserve Consumer Credit report showed credit card debt fell for a 26th consecutive time, showing Americans continue to pay down debt, one reason spending has been slow to recover. Revolving debt, which includes credit cards, dropped by $5.64 billion in October, according to the Fed. Non-revolving debt, which in addition to student borrowing also includes loans for cars and mobile homes, rose by $9.02 billion.

Story by Vincent Del Giudice for Bloomberg

http://www.bloomberg.com/news/2010-12-07/consumer-credit-in-u-s-increased-in-october-for-second-month.html

BANKS PIN REVENUE HOPES ON PREPAID CARDS
Big banks may soon start pushing a different type of plastic to their customers. Financial institutions such as U.S. Bancorp, Wells Fargo and Bank of America are exploring prepaid cards as a way to make up revenue that will likely be lost from federal restrictions on debit cards. That is because prepaid cards, which are preloaded with funds and used like debit cards, are exempt from restrictions in the Dodd-Frank financial-overhaul bill. Prepaid cards carry the same interchange rates as debit cards, typically 0.75% to 1.25% of each transaction. So if banks lose some of the debit-card fees, they hope to regain them through increased prepaid-card use. Banks are pursuing a number of alternatives for prepaid cards, including potentially using them as a debit-card replacement for low-income customers who keep small checking-account balances and don’t make many transactions. Such customers aren’t very profitable for banks, and a prepaid card could cost banks less than checking accounts to maintain.

Story by Robin Sidel and Aparajita Saha-Bubna for the Wall Street Journal

http://online.wsj.com/article/SB10001424052748704377004575651072113863694.html


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The information contained within this article was accurate as of December 10, 2010. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.