LowCards.com Weekly Credit Card Update–August 2, 2019

LowCards.com Weekly Credit Card Update–August 2, 2019

August 2, 2019         Written By Bill Hardekopf

Fed’s First Rate Cut in More Than 10 Years: What It Could Mean for Your Finances
The Federal Reserve on Wednesday lowered its benchmark federal funds rate by a quarter percentage points to around 2.25% from about 2.5%. Supporting the rate cut are data showing the economy losing momentum in areas such as job creation and manufacturing, inflation below the Fed’s target, and slowing global growth amid trade tensions. Contradicting the impetus to cut, the economy is in its longest recorded expansion, unemployment is low and there is ample liquidity at low cost in both consumer and commercial credit markets. Regardless of the reasons or their validity, it is important for consumers to understand the implications of a Fed rate cut on their financial well-being. Story by Tendayi Kapfidze for CBS News

Digital Transactions Driving Growth in Debit
Debit card use and market penetration continued to grow last year, while fraud losses declined, according to Pulse’s debit issuer survey released this morning. Americans conducted 68.5 billion debit transactions in 2018, a 6.7% rise from the year before. Digital transactions—that is, card-not-present purchases—grew 24% year-on-year, more than five times faster than in-person card transactions, and now account for a quarter of all debit purchases. Story in ABA Banking Journal

The Capital One Hack Exposes the Dark Side of Racking Up Credit Card Rewards
Americans can’t get enough of credit card rewards. But our eagerness to score potentially lucrative deals comes with one major, often-overlooked trade-off: It leaves you more vulnerable to cyber criminals. “The more credit cards you have, you’re increasing your attack surface,” said Benjamin Preminger, senior cyber-threat intelligence specialist at cybersecurity firm Sixgill. “You’re storing your data in more databases, so there’s a greater likelihood your information will be breached.” Story by Jacob Passy for MarketWatch

Green Dot Launches High-Yield Mobile Banking App with Cash Back
Green Dot Corp., a company that offers reloadable prepaid debit cards, launched a mobile bank account that offers 3% cash back for online or in-app purchases, a 3% high-yield savings account and free cash withdrawals. The Unlimited Cash Back Bank Account by Green Dot Bank allows customers to make free cash deposits at national retailers, charges no overdraft fees, has no minimum deposit requirements and only charges a low monthly fee that can be waived. The FDIC-insured account uses a mobile app and Visa debit card to offer several features to customers, including P2P funds transfer, electronic bill payment, the ability to track spending and savings and the ability to easily set up Apple Pay, Google Pay or Samsung Pay with the account. Story in Mobile Payments Today

Flaws Allow Attackers to Bypass Payment Limits on Visa Contactless Cards
Flaws that allow attackers to bypass the payment limits on Visa contactless cards have been discovered by two researchers at Positive Technologies. The attack was tested with five major UK banks, successfully bypassing the UK contactless verification limit of £30 on all tested Visa cards, irrespective of the card terminal. The researchers also found that this attack is possible with cards and terminals outside of the UK. These findings are significant because contactless payment verification limits are used to safeguard against fraudulent losses, which have been increasing in recent years. Story in Help Net Security

Mastercard is Betting Big on Acquisitions and Partnerships for its Noncard Business
Mastercard’s acquisition of Transfast can enable it to compete for account-to-account transfers. The acquisition will see Mastercard build on its cross-border payments performance, which increased 16% YoY on a local currency basis in Q2 2019. Just as importantly, the acquisition will further diversify its business beyond card transactions and could bolster its lagging non-US business. Its partnership with P27 Nordic Payments Platform could further expand its noncard business and help it cash in on the potential of real-time payments. The collaboration will see Mastercard work with the platform to provide real-time (RTP) and batch payments in Nordic markets and replace their current payments infrastructure. This will give it a chance to capitalize on the global RTP market, which is projected to be worth $39 billion in revenue by 2025. Story by Daniel Keyes for Business Insider

The Capital One Breach is More Complicated Than It Looks
On Monday night, Capital One and its customers got some very bad news. The company had been breached, spilling hundreds of thousands of social security numbers and account details into public view. The New York Attorney General is already investigating whether Capital One is negligent, but the broader story is familiar: a big company let a lot of sensitive data go missing, and customers bore most of the risk. But the closer you look, the stranger the story is. Story by Russell Brandom for The Verge

Mobile Payment Adoption Just Might Be on the Verge of a Breakthrough
In a report on mobile wallet adoption released earlier this month, Juniper Research estimated that consumer spending through digital wallets would rise 40% this year in North America and Europe to $790 billion in 2019. Juniper analysts said the increase is due to a continued migration from consumers using cash, the transition by major banks to contactless cards as well as a surge from millennials and younger consumers who are increasingly using the iPhone, where the firm estimates that one third of the devices are being used to make contactless purchases. Story by David Jones for Mobile Payments Today

Facebook’s Audacious Pitch for a Global Cryptocurrency
Libra, the new cryptocurrency proposed by Facebook last month, is intended to solve many of the problems that have beset Bitcoin. A white paper announcing the new venture includes a “problem statement,” which notes that there are 1.7 billion people in the world without access to banks or other financial institutions. And, for those living and working outside their countries of birth, who accounted for six-hundred and eighty-nine billion dollars in remittances last year, a record high, “hard-earned income is eroded by fees.” Libra, which is being pitched as a “stable” currency “for the whole world,” will be pegged to a basket of low-volatility fiat currencies such as, for example, the U.S. dollar and the Japanese yen. This will make it useful for commerce but not for speculation. Story by Sue Halpern for The New Yorker

Apple Card Will Launch in August
Apple Card will hit its summer launch date. During the company’s fiscal third-quarter earnings call Tuesday, CEO Tim Cook announced that the company will begin offering its new card to users next month. First announced during the company’s March software and services event, Apple Card will be Apple’s entrance into the payments arena. The iPhone-maker has teamed up with Goldman Sachs and Mastercard for the new credit card, which will be available as a digital card in the Wallet app for use with Apple Pay. A physical titanium card will also be available for use in places that don’t yet accept mobile payments. Story by Eli Blumenthal for CNet

Zerocard Aims to Reduce Overspending with “Debit-Style” Credit Card and Rewards
Zerocard aims to be an alternative to credit cards from big banks that make money off cardholders who fall into debt. Zerocard is a credit card, but provides a “debit-style experience” and 1% to 3% cash-back rewards for cardholders. You have to have a Zero checking account in order to qualify for the credit card, which allows you to use the unique debit-style feature. The card gives you all the benefits of a traditional credit card—access to a line of credit, cash-back program and a chance to build credit—while encouraging you to spend within your means thanks to the debit feature. This debit-style feature can be turned on and off at anytime via the Zero app. When this feature is turned on, the credit limit of your Zerocard is equal to the amount in your Zero checking account. This is similar to a secured card. Story by Alexandria White for CNBC

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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