LowCards.com Weekly Credit Card Update–April 3, 2015
Creditless Can Benefit from New FICO Score
People struggling with a bad credit score, or lack of one, could benefit from a program rolling out in the next few months aimed at making it easier to get a Visa or MasterCard. The company behind the widely used FICO credit score announced a pilot program Thursday to help millions of Americans get easier access to credit, based on their record of paying utility bills, instead of their history of loan repayments. Under the program, Fair Isaac, working with LexisNexis and credit agency Equifax, will create a payment history profile from a person’s utility bills and public property records. FICO would use that pooled data to determine an “alternative” credit score when a person with a poor credit history, or none at all, applies for a credit card. Story by Ken Sweet for the Associated Press.
Fraudsters Target Elite Credit Cards Twice as Often
So-called elite credit cards have nearly twice the fraud rates as other types of regular plastic, according to Forter, which makes fraud prevention software for online retailers. The company just released results of a yearlong study, analyzing hundreds of thousands of credit card transactions across all types of online retailers. Forter also found that people who commit credit card fraud tend to burn the midnight oil. Most fraud occurs between 2 a.m. and 6 a.m. The fraud rate is 10 times as high then as the rate between 2 p.m. and 6 p.m. Story by Tom Anderson for CNBC.
Your Credit Card’s Best-Kept Secrets
Sure, credit cards can be problematic if you carry big balances and don’t pay them off. But when managed properly, credit cards can actually save you money through valuable benefits. But many cardholders don’t use—or even know about—the valuable perks their cards offer. Understanding your benefits can help you make better choices about when to use them and how to save on all kinds of products and services. Here are six secret benefits you might already have. Story by Nancy Mann Jackson for MarketWatch.
Credit Card of the Future Could Stop Fraud
As banks seek to reduce fraud, one credit card maker has a prototype with a constantly-changing code on the back. It is from the French company Oberthur Technologies. Expect it in 2017 if it catches on with major banks. The mini ink screen is powered by a lithium-ion battery (like a phone) the size of a postage stamp that’s designed to last three years. A computer chip randomizes the number every 40 or 60 minutes. Engineers have managed to squeeze it all into a regular, 0.76 millimeter-thick card. The changing code renders the card useless to anyone who has written down your credit card number, expiration date and the code on the back. Story by Jose Pagliery for CNN Money.
Some Significant Shifts in the Credit Industry
A new survey shows some noteworthy shifts taking place in the credit industry. Rejection rates for credit applications are declining and more consumers plan to apply for credit during the next 12 months. The New York Federal Reserve’s Survey of Consumer Expectations now includes a Credit Access survey which analyzes consumers’ experiences and expectations regarding credit demand and credit access. According to the latest survey results, new applicants for credit remained steady over the past year and a half but rejection rates dropped from 30% in October 2014 to 25% in February 2015. Also, respondents who asked for a credit limit increase and got rejected dropped from 38.5% last October to 24.3% in February. The number of people who plan to apply for credit cards over the next 12 months rose from 7.8% in October to 11.6% in February. Story by Bill Hardekopf for LowCards.com.
Are Gas-Brand Credit Cards Running on Empty?
If you’re carrying a gasoline-branded credit card in your wallet, you may want to throttle back. While fuel cards can be a smart option in special cases, in general you’ll do better pumping up your rewards with another type of card. In general, gas cards have minimal rewards, paltry signup bonuses, extra hoops to jump through and carry higher interest rates compared to general-purpose cards. At current pump prices, the average 10-cent discount works out to about a 4 percent return. That’s not a bad deal compared to typical cash-back cards paying from 1 percent to 5 percent on purchases. But gasoline prices are relatively low right now. When pump prices eventually climb, the value of the discounts will fall. Story by Patricia Sabatini for the Pittsburgh Post-Gazette.
AmEx CEO Says Company was “Arrogant” in ’80s and ’90s
American Express was cocky back in the day. That was the message American Express Co. Chief Executive Officer Kenneth Chenault said Tuesday at a speech at Boston College’s Carroll School of Management. At the event, which was reportedly attended by a slew of high-profile executives from Boston-area corporations, Chenault revealed that in the 1980s and ’90s AmEx “gained a reputation as being prestigious, elitist and expensive—and for years we reveled in those attributes. We took our prestige so seriously that as a company, we too became elitist and arrogant.” Story by PYMNTS.com.
Seeing a Tax Refund as a Financial Opportunity
So far this year, the Internal Revenue Service has processed more than 66 million federal income tax refunds, averaging about $2,900 each. Such a lump sum can provide an opportunity to help get your finances on track, financial advisers say. Story by Ann Carrns for The New York Times.
College Freshmen Feel Ill-Equipped to Manage Their Money
First-year college students feel less prepared to manage their finances than to tackle other aspects of college life, a study released Thursday found. Only 58% of students surveyed said they felt prepared to manage their money, while 73% felt ready to keep up with coursework and 63% were confident about managing their time. Story by Karen Damato for The Wall Street Journal.
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 14.47 percent, identical to last week. Six months ago, the average was 14.54 percent. One year ago, the average was 14.45 percent.