LowCards.com Weekly Credit Card Update–August 19, 2016
Major Hotel Chains Hacked, Credit Card Details Stolen
If you stayed at a major hotel chain in recent months, you might want to check your credit card statement. HEI Hotels & Resorts, which operates a slew of popular hotels-including Starwood, Marriott, Hyatt, and others-says that 20 of its properties were hacked and payment card data stolen by hackers. The company pointed to “point-of-sale terminals, such as food and beverage outlets” as the source of the breach. Story by Don Reisinger for PC Mag.
Citi Can’t Stop AT&T From Saying “Thanks”. For Now
Two months ago, Citi sued AT&T–not over some huge multimillion-dollar account or bad business deal, but over AT&T’s daring use of the word “Thanks” in a new loyalty program. The bank asked a federal court to bar the phone giant from using the disputed term pending the outcome of the case, but the judge has shot that request down. At issue is Citi’s trademark over its “ThankYou from Citi” credit card rewards program and AT&T’s recently launched “AT&T Thanks” loyalty program. Citi had sought a preliminary injunction against AT&T. Story by Chris Morran for Consumerist.
How Credit Card Companies Prey on Millennials
When Kelly Dilworth applied for a Discover card in July, she was happy to learn that her spending limit was $13,000-a level most card companies don’t offer unless a customer is in the highest credit tier. Then she found out the card’s annual percentage rate (APR) was 21.24 percent, a level that used to be reserved for people with shabby credit. Like most credit card companies, Discover didn’t reveal to Dilworth what her APR would be until after it had issued her card. While U.S. interest rates remain below 1 percent, some of the same financial institutions allowed to borrow money from the government at historic lows are quietly jacking up rates on even people with commendable credit. Story by Leah McGrath Goodman for Newsweek.
Green Dot/Mastercard Explain Walmart Prepaid Glitch
Details are emerging about the May 2016 prepaid glitch that hit a triumvirate of heavy hitters in the payments and retail space–namely, Green Dot, Mastercard and Walmart–and the scope has finally been quantified. More than 58,000 customers using Walmart branded prepaid cards were affected by their inability to access funds loaded on those cards. In addition to being unable to access funds, some customers were unable to activate new cards or view account balances. Green Dot explained in its missive that it had been in the midst of migrating processing services tied to its 2 million active prepaid accounts when the outage occurred. Green Dot said that roughly 1.2 percent of its active card base, which numbers roughly 4.8 million, had been hit by the service outage, and of the 58,000 plus that had been affected, roughly 12,600 were stymied from activating new cards or activating replacement cards. More than 41,000 accounts had transactions declined because of low balances that were reporting errors. The remaining amount–about 4,500 accounts–were calculated as they came from complaints to various regulatory agencies. Story by PYMNTS.
Did VISA, MasterCard Collude to Put Profits Before Protection?
“We don’t take American Express.” You’ve likely heard this before, right? What about “We don’t take Visa.” Never? That sounds about right. Major retailers, if they accept card payments, take Visa and MasterCard, for the most part. These two card-issuing giants pretty much have the market on credit cards cornered – but at what cost? According to Home Depot, the cost was $750 million in transaction fees last year alone. In its recent antitrust suit, Home Depot criticizes Visa and MasterCard’s allegedly exorbitant transaction fees and claims they are gouging the market through unfair competition, unreasonable restraints on trade, and a collusion to put their profits ahead of fraud protection. Story by Annie Dike for The National Law Review.
Mobile Payments Wait For Consumers; 59% Not Interested
Only 21% of consumers who use the Internet expect to move to try mobile payments, according to a survey by Citi Cards. In addition, a majority (59%) said they were very unlikely to start using a mobile payment app. It is estimated that transaction value will triple this year due to a growing user base, broader merchant acceptance and the increasing frequency of consumers using their phones to make point-of-sale purchases on more expensive products. So there may not be a lot more people, but there will be a lot more money flowing through mobile. One of the drivers of mobile payments should have been the shift to credit cards with chips, finally launched into the U.S. market late last year. Any consumers who have to insert their cards into payment terminals have to recognize that the time the card is required to sit in the machine is a lot longer than the old credit card swipe. While slower than a credit card swipe, mobile payments can be a lot faster than waiting for a card chip to be read in a point-of-sale terminal. Story by Chuck Martin for Media Post.
Millennials More Likely to Switch Banks
Millennials are two to three times more likely to change to a new financial institution than people in other age groups, according to a new FICO survey. The desire to switch may be largely in part to the low fees associated with online and mobile-only banking. Millennials said getting lower fees was their top reason for switching financial institutions: 45% for age 25-34 compared to 36% of age 18-24. Another reason why Millennials are apt to switch banks is because they have had a bad experience after missing a payment. Story by John Oldshue for LowCards.com.
Repealing the ‘Durbin Amendment’ of Dodd-Frank Will Benefit Consumers
Soon after President Barack Obama signed Dodd-Frank, including the Durbin amendment, into law, many of the largest banks increase their fees on basic checking accounts. Additionally, many banks offering free checking discontinued that, leading today to free checking being almost non-existent. While most banks offered free checking before, only 39 percent of banks nationally offer free checking just two years after Dodd-Frank became law. As a result of the regulations under the Durbin amendment, the interchange fees on the use of debit cards come at the disadvantage of smaller purchases, at the expense of consumers. Story by Dean Chambers for Inside Sources.
From Download to Deposit, Mobile Banking Only as Safe as Your App
Once upon a time, depositing a check required actually visiting a bank. Now, the same task can be as simple as taking out your smartphone, opening an app and snapping a picture. But as mobile banking increasingly replaces, or at least supplements, traditional banking, questions arise about the trade-offs between security and convenience. According to the Federal Reserve, 42% of mobile phone owners think mobile banking leaves personal information very or somewhat unsafe, while another 15% admit they aren’t sure how safe it is. Story by Alyssa Oursler for USA Today.
Starbucks Prepaid Program Offers Lessons for Credit Unions
Great power comes from a great prepaid program. Since launching its first card in 2001, Starbucks has achieved tremendous success with its prepaid program. Today, the coffee mega-chain boasts more than $1.2 billion loaded onto its cards and mobile app. What’s even more impressive, however, is that this figure exceeds the deposits at many financial institutions. To win back consumers prone to depositing their money in Starbucks accounts, credit unions should consider bolstering their prepaid programs with strategies straight out of the Starbucks playbook. Story by Jeff Falk for Credit Union Insight.
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 14.63 percent, identical to last week. Six month ago, the average was 14.83 percent. One year ago, the average was 14.65 percent.