LowCards.com Weekly Credit Card Update–December 27, 2013
American Express To Pay $75 Million Over Credit Card Practices
The Consumer Financial Protection Bureau has ordered American Express to pay more than $75 million to settle claims that it charged improper fees and misled its credit card customers over so-called add-on products like identity fraud protection. American Express will have to refund $59.5 million to more than 335,000 consumers over what the bureau called “illegal credit card practices.” American Express will also have to pay a $9.6 million cash penalty to the bureau, according to a statement issued on Tuesday. Story by Rachel Abrams for the New York Times.
Debit and Credit Cards Stolen in Target Breach Reportedly for Sale in Underground Markets
Credit and debit card accounts stolen during a security breach involving retailer Target have reportedly flooded underground black markets, going on sale in batches of one million cards. The cards are being sold from around $20 to more than $100 each, KrebsOnSecurity reports. The security news site said it spoke to a fraud analyst at a major bank who said his team was able to buy a portion of the bank’s accounts from an online store advertised in cybercrime forums as a place where thieves can buy stolen cards. Story in FoxNews.com.
U.S. a Laggard in Adopting More Secure Cards
The massive data breach at Target has again highlighted how the United States remains a relatively insecure backwater when it comes to credit card technology. Over the last decade, most countries have moved toward using credit cards that carry information on embeddable microchips rather than magnetic strips. The additional encryption on so-called smart cards has made the kind of brazen data thefts suffered by Target almost impossible to pull off in most other countries. Because the U.S. is one of the few places yet to widely deploy such technology, the nation has increasingly become the focus of hackers seeking to steal such information. The stolen data can easily be turned into phony credit cards that are sold on black markets around the world. Story by Chris O’Brien for the Los Angeles Times.
You Could Soon Pay More for Using Credit Cards
Retailers could soon be passing on their “swipe” fees–the fees Visa, MasterCard and American Express charge to merchants–to customers paying by credit card. American Express agreed to settle two class actions filed by merchants in 2004 and 2006 that would allow them to impose surcharges on credit card users if the same surcharge is charged to holders of other credit cards. A judge has yet to approve the American Express decision. Large retailers such as Target and the National Retail Federation have said merchants were unlikely to set up a two-tier system that passes on swipe fees to customers, saying such charges are not consumer-friendly. Story by Susanna Kim for Good Morning America.
How to Stop Receiving Credit Card Offers In The Mail
Most of us signed up for the “do not call” list years ago when we found out how to stop telemarketers from calling our home phone numbers. But many of us have not taken time to opt out of direct mail offers from credit card companies, which are essentially written solicitations from telemarketers. It is just as annoying to throw away credit card offers as it is to answer pointless phone calls. Luckily, you don’t have to do either anymore. OptOutPrescreen.com is a site provided by Equifax, TransUnion, Experian and Innovis, known as the consumer credit reporting companies. On it, you can opt-out of receiving credit card offers for five years or permanently. Story by Bill Hardekopf for LowCards.com.
Wave of Lawsuits Against Target Begins Rolling In
Target, the second-largest U.S. discount chain, faces almost two dozen lawsuits filed by customers after a computer security breach exposed data on 40 million debit and credit cards. Customers have filed complaints seeking group, or class-action, status for their suits in state and federal courts from the company’s home state of Minnesota to California and New York. Most accuse Target of failing to protect their private information. Story by Chris Dolmetsch for Bloomberg News.
The High Cost of Holiday Bank Offers
There’s no shortage of loan offers from banks and credit card lenders. Convenience checks and deferred-billing promotions fill mailboxes with seemingly generous zero-interest terms and 12 months to pay. But are these offers really worth the cost? Most financial experts urge caution, as many offers come with hidden costs. Story by Dennis Nishi for The Wall Street Journal.
Credit Cards Have You Covered on Price Drops
Stop chastising yourself for paying full price on that trendy electronic gadget, those cool boots or ugly Christmas sweater before the deep discounts kicked in. You can still save on your holiday shopping after Christmas. Many credit cards help you to recoup the difference through their price-guarantee programs. Think of price guarantees as a handy back-up plan that allows you to pay full-price on an item when you need it and still get a break if the price has been slashed up to three months later. That means you can buy a new refrigerator when yours goes on the blink in October and get a refund of the change between full price and the Black Friday discount a month later. But it only works if you use a MasterCard, Discover or Citibank credit card to make the purchase. Visa and American Express which both used to offer price-matching programs no longer do. Story by Jennifer Waters for MarketWatch.
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, identical to last week. Six months ago, the average was 14.32 percent. One year ago, the average was 14.35 percent.