LowCards.com Weekly Credit Card Update–August 10, 2018

LowCards.com Weekly Credit Card Update–August 10, 2018

August 10, 2018         Written By Bill Hardekopf

New Overdraft Rules May Be in the (Debit) Cards
Senators Cory Booker and Sherrod Brown introduced a bill that will significantly curtail the overdraft income banks can earn. The Stop Overdraft Profiteering Act of 2018 would ban overdraft fees on debit card transactions and ATM withdrawals, limit fees placed for checks and recurring payments, and control banks’ transaction posting rules. One side of the argument for the bill is that despite the rules requiring banks to ask for consumers to opt-in for overdraft, many don’t recall doing so and are surprised when overdraft fees are incurred. Story by Sarah Grotta for Payments Journal

Visa, Mastercard Agree to Cut Canada Interchange Fees
Visa and Mastercard agreed to cut Canadian credit-card transaction fees in a move that could save smaller businesses C$250 million ($192 million) a year and crimp revenue for Canadian lenders. The U.S. companies agreed to reduce the average annual interchange rate in Canada by 10 basis points to 1.4 percent on cards, Canada’s finance department said. The new rate takes effect in 2020 and runs for five years. The government estimated that small and medium-sized businesses could save C$25,000 over the period. Story by Doug Alexander for Bloomberg

American Express Beefs Up Fraud Protections
American Express has introduced a set of account services that includes a feature allowing cardholders to freeze their card, preventing it from being used for new purchases. If someone finds your card and tries to use it, they can’t. But if you find your card, you can easily unfreeze it. The freezing and unfreezing function is done from the cardholder’s online account. While the card is frozen, recurring subscriptions and bills will post to the account as usual. It can also still be used for digital wallet transactions and some online purchases at merchants where the card is on file. A card freeze is only temporary and will lift after seven days. Story by Mark Huffman for Consumer Affairs

Bugs in Mobile Credit Card Readers Could Expose Buyers
The tiny portable credit card readers you use to pay at farmer’s markets, bake sales, and smoothie shops are convenient for consumers and merchants alike. But while more and more transactions are passing through them, devices from four of the leading companies in the space-Square, SumUp, iZettle, and PayPal-turn out to have a variety of concerning security flaws. Story by Lily Hay Newman for Wired

The Brakes are on US Credit Cards
America’s craving for credit may get a little more difficult to satisfy, according to a survey of major banks conducted by the Federal Reserve. The results of the questionnaire given to senior loan officers at 72 domestic banks indicate these credit card lenders are looking at applicants with a more critical eye, particularly those whose credit score fall in the subprime category. Forty-one percent of consumers between the ages of 30 and 39 have scores of 621 or lower, and 38% of those 30 and under have scores falling in that same range. Any tightening of standards on the banks’ part has the potential to disproportionately affect young people’s ability to get a credit card just as they begin tackling some of life’s bigger financial obligations, such as a paying down their student loans or take on a home mortgage. Story by Brian Riley for Payments Journal

Discover Enhances Features for Cashback Debit Card
Discover has revamped some of the features on the Discover Cashback Debit card, formerly known as Cashback Checking. The new debit card offers a “freeze it feature,” allowing customers to temporarily turn their card off to prevent fraudulent transactions. The card itself has been redesigned with a geometric print on the face. Analysts at Fortune recently assessed what Millennials look for in debit cards. They found that weight and design were highly desired. The Discover Cashback Debit card has one of the more lucrative rewards structures in the debit card market. Users can earn 1% cash back on up to $3,000 each month, which could add up to $360 per year. There are no monthly fees on the card, and Discover waives the first account fee each calendar year. Story by Bill Hardekopf for LowCards.com

More Credit Card Benefits Are Being Rolled Back
For years, credit card companies competed for your business by offering a generous array of free perks, including price protection coverage and extended warranties on products.  Now, though, some card issuers are scaling back or dropping these benefits altogether. Why get rid of perks? One reason, say the credit card companies, is that few people use them. Indeed, a recent report from Bankrate found that a third of credit card holders never used any of the benefits their cards offer. That’s a problem for the credit card issuers because benefit programs can be costly to administer. Story by Eric Reed for Consumer Reports

Poor Families Are More Likely to Apply for Credit Cards to Pay for School Supplies
Low-income parents have a difficult choice at the start of every school year: clothes for their kids or school supplies, rent or school supplies and, in some cases, food or school supplies. Many families of these families can afford one or the other, but not both. Those who earn less than $25,000 per year are 10 times more likely than high-income parents to apply for a new credit card in order to save as little as 5% on school supplies, according to a new survey from the personal-finance website WalletHub. For those who can’t afford it, shopping for school supplies on credit is risky. Many credit cards, especially those marketed to low-income consumers, or to people with poor credit scores, charge interest rates as high as 30% or more, compared to the average credit card rate, which is 17%. Story by Maria LaMagna for MarketWatch

Most People Don’t Know about These Credit Card Perks that Can Save You Hundreds of Dollars
When you get a new credit card, you probably know something about the rewards and the sign-up bonus. If you tend to carry a balance, hopefully you know the APR as well. But there’s a good chance you’re unaware of perks that can save you hundreds of dollars. Less than half of the respondents in a recent survey knew about popular secondary credit card benefits, including rental car insurance and airport lounge access. Some benefits are lesser-known still: Only 17 percent of those polled knew that some cards offer cell phone damage protection, like the U.S. Bank Visa Platinum card. It covers up to $600 in damages to your phone – twice per year. To benefit from a lot of these perks, you need to be aware of them. For instance, U.S. Bank requires you to pay for your cell phone bill with the Platinum card in order to receive the protection benefit. Story by Yoni Blumberg for CNBC

What is AR’s Role in Retail Mobile Apps Going Forward?
Augmented reality apps are emerging that deliver rich, highly interactive, two-way experiences that visually engage customers and extend products and services to fingertip access, both inside and outside the store. Central to AR apps is they are tailor-made for mobile devices. Houzz reports that mobile users who engage AR are 11x more likely to purchase and spend 2.7x more time in the app. Whether virtually walking around furniture to pick out the right fabric or choosing the perfect headlamp for a BMW, we are all kids at heart, and AR shopping experiences are lots of fun. Indeed, research shows that nearly 70 percent of consumers expect retailers to offer an AR experience. Meanwhile, research also shows that a whopping 61 percent of shoppers like shopping at stores that offer some kind of AR functionality versus stores that do not. Story by Blair Newman for Mobile Payments Today

Visa, Mastercard Seen Rising 12% on Robust Profits
Shares of fintech giants Visa and MasterCard have increased by 39% and 56% respectively over the past year, crushing the S&P 500’s rise of just 15.5%. If you thought the two payment processors at the heart of the e-commerce ecosystem were finished rising, think again. Analysts are looking for shares of both companies to increase by 1%. A better outlook for both companies is driving the bullish sentiment. Story by Michael Kramer for Investopedia

The information contained within this article was accurate as of August 10, 2018. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


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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