LowCards.com Weekly Credit Card Update–August 25, 2017

LowCards.com Weekly Credit Card Update–August 25, 2017

August 25, 2017         Written By Lynn Oldshue

AmEx’s $300 Million Prepaid Tech Experiment Ends in a Sale
American Express is selling its prepaid-card technology to InComm Holdings as the lender continues its shift away from down-market customers. InComm, which is backed by private equity firm Warburg Pincus, will also become the exclusive program manager and processor for AmEx’s prepaid products, which include gift cards, business-to-business rewards, tax disbursements and reloadable cards, the companies said Thursday in a statement that didn’t include terms. The deal is expected to be completed in early 2018. AmEx last year dismantled its enterprise growth division, which was created in 2010 as part of an effort by the New York-based firm to broaden its appeal beyond affluent shoppers. The firm had acquired payments startup Revolution Money that year for about $300 million and renamed it Serve, using the technology to offer a line of reloadable prepaid cards that function as a digital alternative to a checking account. In 2012, American Express reached a deal with Wal-Mart Stores Inc. to expand sales of its Bluebird prepaid card. Story by Jennifer Surane for Bloomberg

35% of Americans Are Making This Easily Avoidable Money Mistake
Do you know how many automatic payments you’re making every month? If not, you’re not alone. Some 35% of Americans say they have made automatic payments to a subscription, or a membership service like a gym, and they didn’t even realize it. That’s according to a new survey from the credit-card website CreditCards.com, which asked 1,000 adults about their spending habits. Nearly half of people (48%) said the unexpected charges happened when they started a service as a free trial and then forgot to cancel it. Members of Generation X were the most likely to have signed up for auto-pay programs without realizing it. Some 44% did so, more than 2.5 times that of people ages 72 and over (17%). Parents are more likely than non-parents to be unwittingly enrolled in such a program (43% versus 32%). Plus, people with higher education and income levels are more likely to have been enrolled in an unwanted auto payment plan compared to respondents who make less than $30,000 per year and have an education level of high school or less. Story by Maria LaMagna for MarketWatch

MasterCard and Visa Investors Should Watch This Trend
Visa and Mastercard have thrived in the past few years, as Americans have become more financially secure and slowly become more comfortable taking out credit cards. Banks have been competing to offer generous incentives with new cards, helping prime the pump. But a recent report from the New York Fed indicates that Americans may now be binging too much on credit, and more of us are racking up delinquencies. That trend can sometimes be a red flag for credit card companies, particularly if banks get cold feet and start pulling back on lending. Total U.S. household debt hit a new record of $12.8 trillion in the second quarter, and credit card debt is at its highest level since 2009, according to the Fed. Delinquencies are generally a bigger problem for banks than credit card processors, because banks take the loss on the debt. But credit card companies do depend on banks being willing to issue more credit. If the banks end up on the hook for too many losses, they could pull back on issuing all those sweet rewards-filled cards. Story by Avi Salzman for Barron’s

Uber Relaunches Visa Rewards Program
On Wednesday, ridesharing platform Uber announced the relaunch of Visa Local Offers, a rewards program giving Uber riders around the country the ability to earn Uber credits by using the Visa card attached to their Uber accounts when spending at restaurants, shops and local businesses. Uber said Visa Local Offers is available from the Uber app, where riders can explore thousands of offers from featured merchants. There are no promo codes or coupons to manage. Once enrolled in the program, Uber credits will automatically start to add up in their Uber accounts when users spend with their eligible Visa cards at featured merchants. Uber said riders will need the latest version of the Uber app and an eligible U.S.-issued Visa card on their Uber accounts to enroll in Visa Local Offers. Story in PYMNTS

Digital Payments Now More Popular Than Cash
Digital payments are now popular than cash as app-based methods become more widely supported. Every major mobile operating system now comes with a built-in payment provider. Adoption amongst banks and retailers is also on the rise. Almost half of all consumers now prefer to make small transactions using an app. A recent survey found cash has slipped in popularity to 45 percent of consumers. Digital payments are now at 47 percent. The number of mobile transactions being made is rapidly increasing. Consumers are visiting bank stores and ATMs less frequently. People are becoming reliant on their phones, opting to keep less cash on their person and instead rely on Apple Pay, Android Pay or a similar solution. 46 percent of survey respondents said they use cash on fewer than eight days in a month. 5 percent claimed to never use cash, having entirely abandoned coins and notes for digital methods. Of those that do use cash, 76 percent keep less than $50 in their wallet. Almost half have less than $20. Story by James Walker for Digital Journal

Mobile Payment Company Square Just Opened Its First Brick-and-Mortar Store
Square, the mobile payment processing company and maker of the popular Square Card Reader, is opening its first brick-and-mortar location, a real-life showroom in the heart of New York’s lower Manhattan that’s part tech support center, part store and part showcase for curated products from Square customers. Starting this week, Square Showroom will function similarly to how Apple runs its Genius Bar, at least on weekdays, with customers booking appointments in advance. On weekends, it will be more like a pop-up store, with a selection of jewelry, bags, art, candles and other products from some of the companies that use Square. While Square started as a business focused primarily on startups that weren’t able to shoulder hefty credit card transaction fees, the company has become increasingly focused on addressing the needs of more complex customers dealing with payroll, invoices and other payments. Story by Marty Swant for Adweek

GreenMed Launches World’s First Cryptocurrency-Based Credit Card Processing App for Legal Marijuana Industry
Pro-cannabis cryptocurrency startup GreenMed has become the world’s first one-stop shop for electronic payments in the legal marijuana industry. The platform enables customers to pay for legal marijuana with credit and debit cards. Apart from allowing card payment at dispensaries, the platform also allows users to pre-purchase for quick pick-up over its app. GreenMed is the first platform to implement an ERC20 Ethereum token-backed application for the convenience of both customers and legal marijuana dispensary operators. Due to strict federal regulations, banks have been unable to partner with legal marijuana dispensaries, leaving cryptocurrencies like Ethereum as the only option to help the $5 billion industry accept mainstream electronic payments like credit/debit cards and electronic fund transfers. They can also choose to pay with digital currencies. Story in PR Newswire

American Express Ordered to Pay $96 Million by CFPB
American Express has been ordered by the Consumer Financial Protection Bureau (CFPB) to pay $96 million to customers in Puerto Rico and other U.S. territories. Federal regulators said they issued the fine because two subsidiaries of American Express harmed more than 200,000 customers by charging higher interest rates, enforcing stricter credit cutoffs and offering less debt forgiveness than customers in United States received. One discrepancy included introductory interest rates. From 2005 through 2013, more than two-thirds of the American Express credit cards available in Puerto Rico did not offer a 0% introductory interest rate, while 90% of similar cards in the U.S. mainland did offer this rate, according to the CFPB. The regulator also found when cardholders in U.S. territories defaulted on their debt, they were forced to pay at least 73% of what they owed to settle the matter, while customers in the mainland paid about 55%. Story by John Oldshue for LowCards.com

UK Credit And Debit Card Spending Growing? At Fastest Rate Since 2008
New UK figures show spending on credit, debit and charge cards is growing at the fastest rate since 2008, rising more than five times faster than earnings in a fresh sign of ballooning borrowing by consumers. The number of card transactions increased by 12.3% over the year to the end of June, coming amid a boom in consumer debt that has been raising alarm bells at the Bank of England. The pace of growth in card payments was 10.6% in the 12 months to the end of December. The figures illustrate a growing trend for card payments instead of cash and cheques, buoyed by contactless technology. They also underscore an alarming rate of growth for borrowing at a time when consumers are squeezed by rising inflation and a slower pace of wage growth. The consumer price index rose by 2.6% in July, while wages rose by just 2.1%. Story by Richard Partington for The Guardian

4 Credit Card Fraud Features You May Want
With identity theft reaching a new high last year, Americans are now more scared of someone stealing their credit card or Social Security number than of suffering a terrorist attack, according to a recent FICO survey. If there’s any good news from the 16% annual spike in card fraud, it’s that cardholders themselves are not paying the losses from this wave, at least not directly; those costs are absorbed by credit card issuers. But fraudulent activity creates the nuisance of replacing the card and inputting its information into your online accounts, as well as the worry that the fraudster may have accessed other personal data while stealing your card information. Card issuers are now deploying innovative anti-fraud tools to supplement their customary monitoring of transactions, and of alerts when they detect any suspicious activity. These four card features promise greater peace of mind and fewer hassles should your card be commandeered by a criminal. Story in Nasdaq

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 15.41 percent, identical to last week. Six months ago, the average was 14.99 percent. One year ago, the average was 14.64 percent.


About Lynn Oldshue

Lynn Oldshue has written personal finance stories for LowCards.com for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue
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