LowCards.com Weekly Credit Card Update–August 30, 2013
Facebook Friends Could Change Your Credit Score
Choose your Facebook friends wisely; they could help you get approved–or rejected–for a loan. A handful of tech startups are using social data to determine the risk of lending to people who have a difficult time accessing credit. But some financial lending companies have found that social connections can be a good indicator of a person’s creditworthiness. One such company, Lenddo, determines if you’re friends on Facebook with someone who was late paying back a loan to Lenddo. If so, that’s bad news for you. Story by Kate Lobosco for CNN Money.
Platinum Card and Text Alert, Via Pawnshop
Linda Ballard uses the word “love” to describe her banking relationship, lauding the ease of cashing her bimonthly paycheck, the convenience of text alerts about her balance and the features on the platinum card that she was upgraded to in July. She is getting this array of services from a pawnshop–part of an industry that has long had a reputation of taking advantage of vulnerable customers handing over prized possessions in exchange for cash. As banks zero in on more affluent customers, close branches in poor areas and remain stingy with credit, pawnshops are revamping their image and stepping into the void to offer financial services. Story by Stephanie Clifford and Jessica Silver-Greenberg.
Zero Worship: Credit Card Firms Compete with No Interest Transfers
Credit card companies, hungry for new customers as many Americans continue to shun debt, are flooding mailboxes and email accounts with offers that allow new customers to transfer their existing credit card balances from other institutions without paying interest for as long as two years. Lenders are pushing the offers as they attempt to bulk up their loan portfolios, which shrank dramatically during the financial crisis. Story by Robin Sidel for The Wall Street Journal.
Regulators Prepare Penalties for JP Morgan
Two federal regulators, the Office of the Comptroller of the Currency and the CFPB, are preparing a series of enforcement actions and fines against JP Morgan Chase stemming from its dealings with consumers during the recession in the latest legal woes facing the nation’s biggest bank. Under the terms of the civil orders, the bank will have to acknowledge internal flaws and dole out at least $80 million in fines based on concerns that the bank duped its credit card customers into buying products pitched as a way to shield them from identity theft. The consumer bureau will also levy a roughly $20 million fine, while the comptroller’s office is expected to extract about $60 million. Story by Jessica-Silver-Greenberg and Ben Protess for the New York Times.
Airline Reward Miles Becoming Harder to Use
Cashing in those airline miles for a free ticket is not as easy as it used to be. Airline mergers have cut the available flights, leading to more crowded flights with fewer available seats for frequent fliers. Yet, consumers continue to sign up for airline reward credit cards and collect miles because free flights are a good deal if you can get them. A survey found that value airlines have seats available to be booked with frequent flier miles 96% of the time. Larger airlines have just 61% reward seat availability. Southwest, its subsidiary AirTran, and JetBlue are among the top five airlines for customers trying to book tickets with frequent flier miles or points. Story by Bill Hardekopf for LowCards.com.
CFPB wants Student Loan Breaks for Public Workers
The Consumer Financial Protection Bureau launched an initiative to urge public service organizations to better inform their employees about loan repayment and forgiveness options. The CFPB reports that one in four American workers may be eligible for student loan debt forgiveness programs open to public service employees, such as teachers, health workers, police officers, firefighters and social workers. Story by Allie Bidwell for U.S. News and World Report.
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 14.38 percent, the same as last week. Six months ago, the average was 14.35 percent. One year ago, the average was 14.36 percent.