LowCards.com Weekly Credit Card Update–April 5, 2019

LowCards.com Weekly Credit Card Update–April 5, 2019

April 5, 2019         Written By Bill Hardekopf

Are Airlines Making More Money from Credit Cards than from Flying?
Delta Air Lines and American Express just renewed their credit card partnership through 2019. By 2023, Delta expects to more than double its AmEx-generated revenue, to $7 billion annually. Delta is not alone. Other major carriers are also racking up cash from credit card deals. Are airlines now more in the credit card business than in the business of flying people? Story by Renata Sago for Marketplace

Americans Will Pay $122 Billion in Credit Card Interest This Year, 50% More than 5 Years Ago
With the economy booming, so too are America’s credit card debts. Ten years after the financial crisis, Americans finally feel confident enough to borrow more, and total credit card debt recently reached a record high. But borrowers are also paying more on what they borrow, as banks pass recent Federal Reserve rate hikes onto customers. Even without any additional rake hikes in 2019, Americans will spend $122 billion on credit card interest in 2019, almost $10 billion more than they did in 2018, according to MagnifyMoney. The average APR on credit card accounts has risen nearly 4 percentage points over the last five years, and now stands at 16.86%, according to the Federal Reserve. Story by Sergei Klebnikov for Money

There is a Savings Crisis and Many Americans Don’t Know How to Fix It. Here’s How
When parts of the Federal government shut down toward the end of last year, many Americans went without a paycheck or two. Crisis followed. For a large swath of America, it was probably not a surprise that so many people became so vulnerable, so quickly. If their income was put on pause, or an unforeseen expense dropped into their lives, they’d be in a similar bind. Forty percent of people in the U.S. don’t have $400 set aside for an emergency, according to the Federal Reserve. Additionally, 25 percent of Americans have nothing saved for retirement. Story by Annie Nova for CNBC

Wells Fargo Joins the US Contactless Card Pack
Wells Fargo announced that it will begin rolling out contactless credit and debit cards. Contactless payments are well positioned to take off in the US as major issuers all jump on board. US merchants are already equipped to accept contactless transactions. Seventy-eight of the top 100 US merchants currently accept contactless payments through NFC technology, according to Visa, which is the same technology used to accept mobile wallets. And over two-thirds of “everyday transactions,” like those made at quick-service restaurants, drugstores, and grocery stores, occur on contactless terminals. Story by Rachel Green for Business Insider

CFPB Research Found Students Pay High Bank Fees–When Their Schools are Paid by Banks
Colleges and banks flaunted new rules meant to protect students from paying excessive bank account fees for prepaid cards loaded with financial aid, and schools that accepted payments from banks were the biggest culprit, according to government research made public today after I filed a Freedom of Information Act.  The research found that students with so-called college-sponsored prepaid and debit cards overpaid millions of dollars in fees to banks, but mainly at schools that accepted marketing payments from those banks.  The analysis expresses concerns about a “conflict of interest” created by schools that accept bank payments. Story by Bob Sullivan for Bob Sullivan.net

Mastercard-Visa Rivalry Heats Up Over Cross-Border Payments
Why are both credit card networks suddenly so interested in cross-border payments? A cross-border payment takes place in any transaction where the buyer’s and seller’s banks are located in two different countries. Cross-border payments are a big business. Total cross-border payment volume was estimated to be as high as $22 trillion in 2015. A large part of this, about 80%, is business-to-business payments, which is usually businesses ordering inventory and supplies from companies operating in foreign countries. Traditionally, cross-border payments are some of the most opaque and expensive transactions to conduct. Using a decades-old process, these payments can bounce around among as many as five different banks–with each taking a cut of the transaction–before reaching their ultimate destinations. Story by Matthew Cochrane for The Motley Fool

I Was ‘Credit Invisible.’ That Made It Very Hard to Have a Life
Our credit score matters. A bad one can be like a door slamming on whatever you aspire to in life: a new apartment, a loan to kick-start your business idea, even a phone to call your family. But as many as 4 in 10 Americans have no idea how their score is determined. This is a feminist issue. A little more than 40 years ago, many women weren’t even able to get a credit card or their own line of credit. That changed in 1974 when Congress passed the Equality Credit Opportunity Act, which made it illegal to discriminate against anyone applying for credit based on sex, race, religion, marital status or age. So, if you have some catching up to do–on what you need to know, or on improving your credit score–here are a few things I learned. Story by Samantha Barry for CNBC

The Hidden Price of Cashless Retail
Cashless retail is still relatively uncommon, but it’s on the rise and has begun to concern some lawmakers. New Jersey recently banned cashless retail. Philadelphia has done the same. Other cities may soon follow. Debates leading up to these laws have mostly centered on how cash-free establishments impact the many low-income people who lack bank accounts and credit cards. But there’s another major problem with going cashless. Cashless retail-and credit cards in general-allow a handful of giant banks and credit card monopolies to siphon more and more revenue from the productive economy, at the expense of consumers and businesses. Story by Charlie Thaxton for Fortune

Digital Wallets Could Become More Widely Accepted Under New Citigroup Service
Digital wallets like Apple Pay and PayPal have a problem: They’re not universally accepted. Now Citigroup says it has an answer. It’s offering a new service that could increase the likelihood that consumers’ preferred payment method will be accepted by more merchants. Currently, many e-commerce companies, utilities and other providers accept just one or two digital wallets, or in some cases, none. Citigroup says its new digital consumer payments business will establish relationships and connections with all the wallet providers, as well as “request for pay” services that debit directly from bank accounts, relieving merchants of that burden and ensuring they can accept the various payment methods. Story by Paul Davidson for USA Today

Gun Control Group’s Report Card on U.S. Banks’ Firearms Ties Has Several Fs
Gun control activists have spent years trying to limit the number of assault-style firearms available to civilians. Now, one advocacy group is focusing on a different pressure point: the consumer banks that provide loans and other financial support to the gun industry. The group, Guns Down America, has created a ranking system that gives 15 banks letter grades based primarily on their ties to firearms makers and trade groups like the National Rifle Association. Six of the banks, including JPMorgan Chase and Wells Fargo, received failing grades. Citigroup earned the highest one, a B. Story by Tiffany Hsu for The New York Times

Removing the Drag from Tableside Payment Growth in the US
As U.S. restaurant operators look to comply with EMV standards, there is a shift towards the European model of bringing the payment device to the table in the form of a tableside POS or card reader. But does tableside payment in this form really meet the demands of the modern American consumer? The U.S. public expects seamless  interactions. Studies show that 56% of consumers are willing to share data to receive a faster and more convenient service, while 84% say a quick and efficient service is important in judging dining experiences. Indeed, 69% of restaurant-goers find waiting for the check the most frustrating part of eating out, which is understandable when you take into account that, on average, it takes 12 minutes from asking for the check to paying it. The harsh reality is that tableside POS payment does little to reduce this waiting time, as it still requires most of the steps previously required for a traditional card payment. Story by Daniel Rodgers for Mobile Payments Today

bill-hardekopf

About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
View all posts by Bill Hardekopf
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