LowCards.com Weekly Credit Card Update–April 22, 2016
Some Merchants See Dip in Fraud Thanks to Chip Cards
The new chip-enabled cards flowing into the U.S. marketplace have already made a dent in fraud, with some of the biggest merchants seeing a dip of more than 18% in counterfeit transactions, according to Visa. Among the 25 merchants who were suffering the most instances of counterfeit fraud at the end of 2014, five that began processing credit and debit cards equipped with the new EMV technology saw those infractions fall 18.3% as of the final quarter of 2015, says Stephanie Ericksen, vice president of risk products at Visa. Meanwhile, five of those merchants who were not yet equipped to handle chip-enabled cards saw an increase in fraudulent transactions of 11.4%. Story by Charisse Jones for USA Today.
Proof that Women are Smarter than Men (about Security)
Men make a lot of mistakes, and it appears they’re more likely than women to let crooks access sensitive information. According to a recent survey, guys are almost twice as likely as women to store passwords or PINs to credit cards, debit cards, online bank accounts and other online accounts on their smartphones, tablets and laptops — a poor security habit that could lead to chaos if one of those devices were stolen or hacked into. The study found that 21 percent of male respondents stored passwords on their devices, compared to 11 percent of females, and that 14 percent of men stored their credit- or debit-card PIN numbers, as opposed to 7 percent of female respondents. Most credit cards in Europe require a PIN to use. Story by Henry T. Casey for Fox News.
Visa, Wal-Mart Move to Speed Checkout for Customers With Chip-Enabled Cards
Shoppers may soon get back a few extra seconds at checkout. In response to complaints about the waiting periods caused by new chip-enabled credit and debit cards, Visa said it is launching software that will shave as many as 18 seconds off the time it takes to make a payment. The nation’s biggest retailer has also taken steps to be faster. Wal-Mart has lopped off 11 seconds from chip-card transaction time, a spokesman said. Among other things, the company has eliminated a prompt that asked shoppers to confirm the amount of the transaction. The new Visa software will reduce the amount of time that the card must be in the reader. It allows the chip card to be inserted and removed from the terminal while an order is still being rung up by a cashier. The transaction amount isn’t authorized by the card issuer until it is complete, but the change allows the customer to put the card away more quickly. Story by Robin Sidel for The Wall Street Journal.
Bank Overdraft Fees Hit Younger Adults Hardest
Younger adults are among those hardest hit by bank overdraft fees, according to a new Pew Charitable Trusts report. More than a third of “heavy” overdraft users – those who pay $100 or more in bank fees in a year for overdrawing their bank accounts – are in their late teens through early 30s. One reason younger consumers may be more affected is that they are more likely to use debit cards, and debits make up the majority of transactions resulting in overdraft fees. Many banks let customers overspend their checking accounts when they do not have enough money to cover a purchase, but then charge a fee – typically $35 – known as an overdraft fee. A small proportion of customers pay the majority of overdraft fees, Pew found, and they pay more than three such fees a year. The typical debit transaction amount that results in an overdraft fee is $24. These customers are essentially using the overdraft option not just as an occasional courtesy, but as an expensive form of short-term credit. Story by Ann Carrns for The New York Times.
Regulations May Be Hurting Credit Card Access for Low-Income Americans
Since 2007, there has been a 250% increase in credit card-related regulatory restrictions, but these regulations may have contributed to a 50% drop in credit card originations among lower-income Americans, according to a new report. The Harvard study examined U.S. consumer credit level trends, federal regulatory actions-including the CARD Act (2009) and the Fed’s 2008 credit card rules-and the CFPB’s pursuit of “unfair, deceptive, or abusive” activities. While researchers found regulatory actions have reduced card fees, they have also made it harder for lower-income Americans to qualify for credit. Story by Bill Hardekopf for LowCards.com.
Apple Pay and Bitcoin Are No Match for Harriet Tubman’s $20 Bill
In replacing Andrew Jackson on the $20 bill, Harriet Tubman is getting pride of place in the American wallet. Despite hype for Apple Pay, Bitcoin, and other alternative payment methods, cash is still king for the vast majority of Americans. And the twenty is the most important bill, making up 55 percent of the value of notes the typical consumer carries. Americans do carry around more $1 bills, but the value of their cash is concentrated in twenties, according to the Federal Reserve Bank of Boston’s Consumer Payments Research Center. The $20 bill is three times as popular as the $10 bill, featuring Alexander Hamilton, Treasury Secretary Jacob Lew’s first suggestion for a bill to feature a woman. Story by Ben Steverman for Bloomberg.
Costco’s Generous New Credit Card Will Be a Boon for the Retailer
Now that Costco has unveiled the details of its new Visa credit card, it’s easy to see why it was eager to end its long-standing exclusive relationship with American Express. Last year, Costco announced it was ending its 16-year deal with Amex and having Visa handle its credit card network. The move, which goes into effect on June 20, will be a big blow to Amex as it loses business from the millions of customers who patronize the second largest U.S. retailer. The new credit card, which will be issued by Citi for Costco, will be called “Costco Anywhere Visa Card by Citi” and double as a membership card for Costco shoppers. The Citi card will offer Costco members 4% cash back on up to $7,000 spent on gas, compared to 3% back up to $4,000 with Amex. Cardholders will also get 3% back on restaurants and travel, a point higher than with the Amex cards. There is no annual fee but shoppers will need to pay for a $55 annual Costco membership. Story by Phil Wahba for Fortune.
Samsung Pay Just Smartened Up Mobile Payments
Samsung has set out its plans to make paying for goods using a smartphone a more effective and reliable experience. The mobile giant has partnered with a number of the leading manufacturers of Point of Sale (PoS) terminals to ensure that customers looking to use its Samsung Pay service will be able to complete their transactions quickly and smoothly. The deal, which will see Samsung working with the likes of Verifone and Ingenico Group, will hopefully cut down on the time taken to process a mobile payment, and reduce the effectiveness of the technology, signalling an end to customers standing awkwardly while the PoS terminal processes a payment. Story by Michael Moore for Tech Week Europe.
2016 Data Breaches 10% Higher Than a Year Ago
The latest count from the Identity Theft Resource Center (ITRC) reports that there has been a total of 269 data breaches recorded through April 19, 2016, and that more than 11.27 million records have been exposed since the beginning of the year. The number of breaches in 2015 totaled 781, just two shy of the record 783 breaches that ITRC tracked in 2014. The 269 data breaches reported so far for 2016 are more than 10% higher than the number reported for the same period last year. A total of more than 169 million records were exposed in 2015. Story by Paul Ausick for 24/7 Wall St.
Bank of America–Pushing Mobile Banking to Turn Around an Industry
Last week Bank of America’s first quarter net profit slumped by 13% to $2.68 billion from $3.1 billion in the comparable quarter last year. Meanwhile revenue came in under expectations at $19.5 billion, down from $20.9 billion in the same period last year. Certainly on the mobile front, BoA has a good story to tell, adding 2.5 million mobile banking customers in the last year. The number of total active users is up to 19.6 million, up from 17.1 million in the first quarter of 2015. Equally encouraging is the rise in customer mobile engagement with 16% of all deposits occurring via on mobile devices in the first quarter. For the bank’s senior management, it’s a simple equation–get more customers to move online to complete transactions and save the bank time and money in the process, removing the need for in-store activities or at least redefining the role of branches. Story by Stuart Lauchlan for Diginomica.
LowCards.com Weekly Credit Card Rate Report
Based on the 1,000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.76 percent, slightly lower than last week’s average of 14.77 percent. Six months ago, the average was 14.56 percent. One year ago, the average was 14.46 percent.