LowCards.com Weekly Credit Card Update–April 12, 2013
Analysts See Steady Credit Card Use, Despite Fears of Consumer Cutbacks
Analysts expect upcoming earnings from American Express, Visa and other large credit card companies to show that shoppers continued to swipe their credit cards at a healthy clip in the most recent quarter. Outstanding loans have not grown because many consumers are paying their bills off each month instead of carrying a balance. The change in behavior has eaten into the fee income that lenders generate by charging interest. Story by Andrew Johnson for the Wall Street Journal.
MasterCard Launches Digital Wallet Service in Canada
MasterCard announced the launch of its MasterPass digital wallet in Canada. It will be launched in the U.S. later in the spring. MasterPass is enabled to make purchases at the point of sale, online or on the phone and supports the use of NFC and QR codes. For online purchases, MasterPass eliminates the need to enter detailed shipping and card information with every purchase–that information is entered once and subsequent orders can be made via a streamlined checkout process. Story by Bryan Yurcan for Banktech.
EU Launches Probe Into MasterCard
The European Union has opened an antitrust investigation into MasterCard following concerns over some of the credit card company’s interbank fees. Regulators are looking at MasterCard’s restrictions on merchants having transactions processed by banks outside their home country in efforts to save on fees. The commission is also investigating into MasterCard’s honor-all-cards rule, which requires a merchant to accept all of the company’s cards. Both premium and commercial cards have higher interchange fees than standard cards. Story by Vanessa Mock and Frances Roberson for the Wall Street Journal.
Retail Trade Group to Opt Out of $7.2 Billion Credit Card Fee Pact
The Retail Industry Leaders Association said it will reject a proposed $7.2 billion settlement with credit card giants Visa and MasterCard over card fees, calling it a “bad deal” for nearly eight million U.S. merchants. The association said it intends to “make a statement” by opting out of the settlement just as lead lawyers for the plaintiffs and credit card companies are preparing to file papers seeking final approval from a federal judge in Brooklyn. The credit card companies believe they have a judge’s backing in the settlement, but a high number of opt-outs could imperil the hard-fought pact. Story by Andrew Johnson for the Wall Street Journal.
AMEX Website Victim of Islamic Attackers
A group of Islamic internet hackers launched a distributed denial of service attack on the American Express website, temporarily shutting down the site for a few hours. In a DDOS attack, site visitors are infected with a Trojan virus that redirects them to a site of the creator’s choice. Once a certain number of people visit that target site, the original site shuts down. American Express’s security team quickly corrected the problem. Nevertheless,it shows how vulnerable American business is right now to Internet hackers. Story by John Oldshue for LowCards.com.
Bieber Backs a Debit Card for Teenagers, From Parents
Justin Bieber earned $55 million in 2012, according to Forbes, but in new videos for the SpendSmart Payments Company, which offers a prepaid debit card for teenagers, the singer talks about his modest upbringing. Mr. Bieber also urges viewers to “have a talk with your family about money.” Subsequent videos also will feature Mr. Bieber discussing financial literacy and encouraging teenagers to share their videos. Mr. Bieber is being paid $3.75 million for a 14-month contract, along with potential monthly royalties tied to the growth of active SpendSmart cards, according to documents the company filed with the Securities and Exchange Commission. Story by Andrew Adam Newman for the New York Times.
Apple e-Wallet Will Get a Jump Start with iTunes
Analysts believe Apple will be launching an e-wallet in the next few years, with some rumors suggesting it is less than a year away from arrival. This program will allow users to save credit card information into their phone accounts and use their phones at store registers. Millions of iPhone users already have their credit card information stored on file, which will allow them to easily transition to the e-wallet software. For iTunes as a whole, there are already half a billion accounts with credit cards tied to them. Story by Lynn Oldshue for LowCards.com.
My Search for Reasonable and Understandable Credit Card Processing
The hottest debate in one of America’s largest newspapers today deals with credit card processing fees. What started out as a simple blog about the search for credit card processing, quickly turned into a national period of reevaluation of options for countless small business owners. Here is the first of his three-part series. Story by Paul Downs for the New York Times.
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 14.28 percent, slightly below last week’s average of 14.29 percent. Six months ago, the average was 14.29 percent. One year ago, the average was 14.33 percent.