LowCards.com Weekly Credit Card Update–December 20, 2013
Target Says 40 Million Credit, Debit Cards May Have Been Compromised in Security Breach
Target said Thursday that credit and debit card account information for 40 million of its customers may have been stolen during the height of the holiday shopping season. The retailer, which has more than 1,500 stores throughout the United States, said customer names, debit or credit card numbers, card expiration dates were taken, along with the three-digit security codes often imprinted on the backs of cards, known as CVVs. With that information, it would be easy for criminals to make purchases on most Web sites. The breach affected those who shopped in a Target store—not online–between November 27 and December 15. Story by Craig Timberg, Hayley Tsukayama and Jia-Lynn Yang for the Washington Post.
Americans Increasingly Paying Off Their Credit Cards
A growing share of Americans are regularly paying off their full credit card balances than were prior to the recession, according to data released Tuesday by the American Bankers Association. The trade group’s quarterly figures show that in the second quarter of 2013, 28.7 percent of all credit card accounts were “transactor” accounts–industry-speak for accounts whose balances are paid off in full each month. That’s a nearly 50 percent increase since the start of 2008, early in the Great Recession. At that time, only 19 percent of accounts were in this category. While Americans may be becoming more fastidious about their credit cards, that decline in outstanding debt may also be partly due to banks’ increased pickiness about to whom to give credit. According to ABA data, nearly 52 percent of cardholders have a credit score of 759 or greater, compared to just 41 percent in 2009. These high-credit-score individuals may be more likely to pay down their debt than other borrowers. Story by Danielle Kurtzleben for U.S. News.
Credit Card Issuers Still Cashing in on College Students, Alums
While government reform has significantly curtailed the number of credit cards being offered on college campuses, card issuers and universities are still cashing in. More than 1.2 million college-affiliated credit card accounts, which can be held by students, alumni or other cardholders, remained outstanding last year. Bank of America subsidiary, FIA Card Services, had nearly 1 million open accounts. Overall, issuers paid more than $50 million to colleges, universities and other groups related to the cards, down from more than $84 million in 2009, the report stated. Alumni groups received nearly $31 million, and colleges and universities received roughly $11.8 million, while the rest went to other affiliated organizations, such as fraternities and sororities. Story by Melanie Hicken for CNN Money.
J.P. Morgan is Sued for Alleged Misconduct in Credit Card Collections
J.P. Morgan Chase’s legal problems worsened Tuesday when the State of Mississippi alleged it committed misconduct while suing credit card users for delinquent payments. Mississippi Attorney General Jim Hood filed a lawsuit following an 18-month investigation and several months of discussions with J.P. Morgan. The complaint alleges J.P. Morgan “knowingly and willfully made false and misleading statements” while recouping old debts and filed legal documents in Mississippi that were “uncertified and lacked evidence.” J.P. Morgan, according to the complaint, pursued Mississippi consumers for delinquent amounts they didn’t owe or debts that already had been paid. Story by Dan Fitzpatrick and Alan Zibel for The Wall Street Journal.
CFPB Orders $34.1 Million Healthcare Card Refund
The Consumer Financial Protection Bureau is ordering a $34.1 million refund to over one million customers who have used GE Capital Retail Bank’s CareCredit card. CareCredit cards are designed to pay doctor and dentist bills with no interest, but recent reports have indicated many consumers paid significant amounts of interest if their balances were not paid during the promotional period. Story by Lynn Oldshue for LowCards.com.
Three Colleges Incorrectly Used State-Issued Credit Cards
Employees at three Washington universities used state-issued credit cards in violation of state policy, charging $226,583 worth of alcohol, gifts and other items to the cards, according to a report by the state Auditor’s Office. The report was a review of the way credit cards are used at the three largest public four-year universities in Washington–the University of Washington, Washington State University and Western Washington University. The audit report found purchases that were not supposed to be charged to state-issued credit cards at all three schools, with the largest amount–$197,265–at the UW. The UW is also the largest user of state credit cards among the six four-year public schools in Washington. Story by Katherine Long for The Seattle Times.
Reducing Credit Card Debt in 2014
Christmas shopping has reached a frenzied pace, and millions of consumers are buying things they probably cannot afford. Many of us will enter January with credit card debt. Issuers are adding to the dilemma. Mailboxes have been filled with credit card offers as issuers aggressively market lucrative rewards and balance transfer cards, especially to consumers with good or excellent credit scores. Here are ten tips for reducing credit card debt in 2014. Story by Bill Hardekopf for LowCards.com.
Federal Consumer Agency Sues Over Online Loans
It sounds like something from a movie: A $10,000 loan with an annual interest rate of nearly 90 percent, that costs more than $60,000 to repay. On Monday, the federal Consumer Financial Protection Bureau sued CashCall, two related companies and their owner, J. Paul Reddam, seeking to stop them from demanding payment for the loans. The bureau also is seeking refunds for payments that borrowers have made, as well as financial penalties. The bureau didn’t immediately say how much money is at stake for refunds overall, but a spokesman said CashCall’s affiliate, WS Funding, financed hundreds of thousands of loans from 2010 to 2013. The bureau said the action is its first online-lending lawsuit. Story by Ann Carrns for The New York Times.
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 14.46 percent, slightly lower than last week’s average of 14.47 percent. Six months ago, the average was 14.30 percent. One year ago, the average was 14.32 percent.