LowCards.com Weekly Credit Card Update–December 31, 2015
There are Officially More People Doing Their Weekly Banking via Mobile Phones Than Branches
Mobile banking remains a technology in its infancy, but according to Javelin Strategy & Research, it has already eclipsed physical branches in terms of the percentage of US customers using it to take care of their weekly banking needs. Users aren’t just turning to mobile apps and browsers for handling simple services like checking their balance, either. A Javelin study last year found that more Americans are now using digital devices–including smartphones and tablets, as well as desktop computers–rather than visiting local bank branches to apply for credit cards, loans, and investment accounts. These shifts, along with cost pressures on banks, have helped to accelerate branch closings across the country. Story by Ian Kar for Quartz.
Why You Should Consider Freezing Your Credit Reports
Freeze your credit reports before you get burned. That’s the message from security experts, consumer advocates and some state Attorneys General. They say more people should consider a credit freeze as a way to block identity thieves from opening new credit cards and other accounts in your name. They recommend a freeze even if your identity hasn’t been stolen. Story by Joseph Pisani for the Associated Press.
Samsung Pay Plans to Enable U.S. Online Shopping in 2016
Samsung plans to expand its fledgling mobile payment service in the United States next year, allowing users to shop online and with more smartphones that support the electronic wallet. Lower-priced Samsung phones will likely start offering the mobile wallet within the next year. The service debuted in South Korea on just a handful of high-end Samsung phones. Samsung Pay has already scored a lead over its major rivals Apple and Android, by launching its U.S. service on Sept. 28 with technology that is widely used at most stores. Apple Pay and Alphabet Inc’s Android Pay require retailers to install new equipment. By accepting payments online, Samsung Pay will compete with established rival PayPal Holdings Inc, as well as newcomers such as Visa Inc’s Visa Checkout. Story by Nandita Bose for Reuters.
Hyatt Says Hack Targeted Names, Credit Card Numbers
Hyatt Hotels said an attack on its computer system targeted key data stored on payment cards, but it is still investigating details about the cyberintrusion. The hotel chain also said it discovered the malware on Nov. 30. The company’s statements followed its disclosure Wednesday that it had recently identified malicious software on computers that operate its payment-processing systems. The incident affected Hyatt-managed properties, but not those that are owned by franchisees, the company said. A company spokeswoman said in an email Thursday that the malware targeted data such as cardholder name, card number, expiration date and the security code. Story by Robin Sidel for The Wall Street Journal.
Holiday Spending up 8 Percent; Online Sales Surge
Americans spent more on items like furniture during the holidays this year, with online shopping in particular seeing a big spike. Overall spending rose 7.9 percent from a year ago, according to the MasterCard SpendingPulse report, which tracks retail sales across cards, cash and checks from Black Friday to Christmas Eve. The uptick was driven by people sitting in the comfort of their homes or at work, with online shopping up 20 percent. Shopping at physical stores still accounts for the majority of spending during the holidays. But the continuing shift to online shopping is forcing retailers to improve their websites, or offer perks like faster or free delivery. Story by the Associated Press.
AmEx Reinstates Policy That Prohibits Merchant Steering
American Express has officially reinstated its longstanding policy preventing merchants from steering customers to cheaper payment options. The credit card giant chose to do this after a federal appeals court lifted the ban that forced the company to suspend the policy in the first place. AmEx and merchants have battled in court for months over the anti-steering policy. Merchants argue that preventing them from promoting other payment options not only damages their profits, but is also anticompetitive. A lower court ruled in favor of the merchants earlier this year, but that ruling was overturned last week by the federal appeals court. The American Express employees in charge of merchant relations have been told to start enforcing the policy immediately. Story by Bill Hardekopf for LowCards.com.
Terrorists Use Credit Cards Too–Anti-Fraud Software Could Catch Them
The Belgian residents who were linked to the November terrorist attack could have been stopped with real-time sophisticated analytics that can detect behavioral changes in credit and debit card usage, said Dr. Akli Adjaoute, founder and CEO of Brighterion, a company specializing in credit card fraud prevention. The system would probably have caught the attacker, he said, even if the various government intelligence services weren’t involved. You can’t rent a car without a credit card because the card covers insurance. Most airline tickets are also purchased with plastic–a Belgian trying to buy a ticket to Turkey with cash would immediately arouse suspicions. The artificial intelligence that Brighterion uses to prevent fraud in credit cards–MasterCard is a client–could detect the sort of change in behavior leading up to an attack. Story by Tom Groenfeldt for Forbes.
The Bancorp To Pay $4.3M In FDIC Debit Card Settlement
The Bancorp Inc. will pay a civil penalty of $3 million and about $1.3 million in restitution to about 21,000 affected customers for engaging in unfair and deceptive practices related to prepaid debit cards, the Federal Deposit insurance Corporation announced. The FDIC found that the bank violated the Federal Trade Commission Act by not providing promised protections to consumers when resolving account errors, failure to provide promised benefits for a debit card rewards program and charging deceptive fees. Story by John Kennedy for Law 360.
Parents Teaching Fiscal Responsibility, Look to Prepaid
Parents are increasingly turning to prepaid cards to teach their preteen and teenage children about financial responsibility. Recent data from the Prepaid International Forum (PIF) found 60 percent of parents believed prepaid cards offered their kids a greater sense of financial responsibility and served as effective budgeting tools. For parents with children under the age of 12 specifically, prepaid is the No. 1 tool they use to introduce money management to their kids. Because children (or anyone for that matter) can’t spend more than what’s loaded on a prepaid card, parents have the peace of mind their children won’t incur debt as they taste financial freedom. Of parents with children using prepaid cards, 43 percent said they most appreciated receiving their children’s balance and transaction histories. Story by Jeff Falk for CU Insight.
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 14.87 percent, identical to last week. Six months ago, the average was 14.62 percent. One year ago, the average was 14.45 percent.