LowCards.com Weekly Credit Card Update–August 29, 2014
U.S. Late Payment Rate on Credit Cards is at the Lowest Level in Seven Years
Americans are doing a better job of making timely credit card payments, even as many lenders increasingly extend credit to more people with less-than-stellar credit. The rate of U.S. credit card payments at least 90 days overdue fell to 1.16 percent in the April-June quarter–the lowest level in at least seven years, credit reporting agency TransUnion said. The second-quarter credit card delinquency rate is down from 1.27 percent in the same period last year and 1.37 percent in the first three months of this year. Story by Alex Veiga for the Associated Press.
American Express and Discover Rated Top Credit Cards
Two major credit card issuers targeting different clientele—upscale American Express and mainstream Discover–tied for top honors again in this year’s J.D. Power customer satisfaction survey. The ranking demonstrates there’s more than one path to keeping customers happy. American Express and Discover both provide great personal service when customers call in and they also make it easy for people to manage their accounts online, as well as by using mobile apps. Story by Patricia Sabatini for the Pittsburgh Post Gazette.
Banks, Retailers Speed Up Drive to Add Chips to Credit, Debit Cards
The push for the new cards is taking on greater urgency following a number of high-profile data breaches in recent months that have exposed millions of consumers to potential fraud. Just last week, grocery chain Supervalu disclosed that it was investigating a breach that could affect shoppers at roughly 1,000 supermarkets. In all, U.S. lenders will issue more than 575 million chip credit and debit cards by the end of 2015, representing roughly half of the one billion cards now in circulation, according to an industry-group projection. Bank of America, the nation’ second-largest credit card issuer after J.P. Morgan Chase, and regional lender SunTrust Banks are among the institutions now putting chips on plastic sent to new customers or existing customers whose cards are expiring. Story by Robin Sidel for The Wall Street Journal.
Cosigning a Student Loan Risky for Parents
Parents and grandparents feel they should help out when it comes to getting a college diploma and contribute to building up all that college debt. But cosigning is nothing as simple as offering a reference. It can mean the parent or grandparent is on the hook if the student defaults. Cosigning puts your credit score at risk if the student makes late payments or falls behind. Story by Susan Tompor for the Detroit Free Press.
Malware in Target Breach has Affected 1,000 Other Businesses
The data breach at Target late last year shattered consumer trust, and that confidence has been further eroded by numerous breaches throughout 2014. Just last week, two more companies, SuperValu and UPS Stores, reported significant breaches. But what is becoming evident now is the link between so many of these security breaches. In an advisory released on Friday, the Department of Homeland Security estimates more than 1,000 businesses have been affected by the same “Backoff” malware that led to the Target breach. Story by Natalie Rutledge for LowCards.com.
For Student Loan Borrowers in Default, Redemption Just Got Easier
As college campuses prepare for a new academic year, revised federal rules now in effect should make it easier to return student loans in default to good standing. The new rules, which became official July 1, help define what is a “reasonable and affordable” monthly payment for borrowers working to get troubled loans back on track through a rehabilitation process. Under the rules, payments must be calculated in a way that takes into account a borrower’s income and expenses as well as family size. Story by Ann Carrns for The New York Times.
Extended Warranties May Not Save You Money
Beyond that manufacturer’s warranty, a good credit card such as American Express or Visa Signature can offer cardholders extended coverage simply by virtue of you swiping your card at checkout. Plans vary by provider, but many higher-end credit card programs provide one extra year of coverage above the original manufacturer’s warranty, making that one-year warranty on a new TV actually good for two years. If you’re eligible for this coverage at no additional cost, why pay for a two-year service contract? Story by Jeff Reeves for USA Today.
Beat Those Annoying Overdraft Fees
Consumers paid an estimated $32 billion in overdraft fees on their debit accounts in 2013. But did you know that most of that revenue comes from customers who give the bank explicit permission to charge them? The Consumer Financial Protection Bureau (CFPB) recently released an analysis of overdraft data on nearly 2 million checking accounts held at many of the big banks. The patterns they turned up can help you avoid paying these very avoidable charges. Story by Anya Kamenetz for the Chicago Tribune.
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 14.49 percent, slightly higher than last week’s average of 14.47 percent. Six months ago, the average was 14.50 percent. One year ago, the average was 14.38 percent.