LowCards.com Weekly Credit Card Update–February 14, 2014
Target Data Breach Pits Banks Against Retailers
Banks and big retailers are locked in a debate over the breach of consumer data that gripped Target during the holiday season. At issue: Which industry bears more responsibility for protecting consumers’ personal information? The retailers’ argument: banks must upgrade the security technology for the credit and debit cards they issue. The banks’ counterargument: newer electronic-chip technology wouldn’t have prevented the Target breach. And retailers must tighten their own security systems for processing card payments. The finger-pointing is coming from two industries with considerable lobbying might. Their trade groups have been bombarding lawmakers with letters arguing why the other industry must do more—and spend more–to protect consumers. Story by Marcy Gordon for the Associated Press.
Consumer Borrowing Jumps in December
Demands for auto, student and credit card loans experienced significant increases in December, according to the latest figures from the Federal Reserve. Consumer credit increased $18.8 billion in December, an annual rate of 7.3%. This was the biggest increase in 10 months. Over $13 billion of this increase came from the category that includes student and auto loans. Revolving credit, the majority of which is credit card debt, increased at an annual rate of 7% with a jump of $5 billion in December. This was the third largest gain during the recovery and the largest jump since May. Some
analysts believe this could be a positive sign for the future of the economy. Story by Lynn Oldshue for LowCards.com.
Whether PIN or Signature, Smart Cards are Coming
Smart cards, already used for credit transactions in about 130 countries, are coming to America. But it will be years before we all have these fraud-resistant credit cards in our wallets. Though U.S. banks have been issuing the cards for a few years, the recent rash of data breaches at Target and other retailers has injected a sense of urgency into their efforts. The big question is what type of smart cards the banks will issue. Will they require a PIN code for authentication or simply a signature? Story by Herb Weisbaum for CNBC.
Credit Card Thief Tries to Eat the Evidence
A hotel receptionist in Manchester, England was recently convicted of selling his customers’ credit card information after a police officer found him trying to eat the evidence. The officer noticed the man and thought he was trying to swallow drugs. Authorities managed to get half of a piece of paper out that contained a customer’s bank details, and that was enough to take the man in for questioning. Story by Natalie Rutledge for LowCards.com.
Frequent Flier Programs Tighten Rules for Membership
Delta Air Lines and United Airlines are tightening their frequent flier loyalty program rules, bringing in minimum spending requirements for some members and demanding that they fly further to earn a business or first-class reward ticket. In so doing they are taking a lead from lower-cost competitors that already reward regular passengers based on how much they spend rather than how far they fly. Industry analysts expect American Airlines and perhaps other international carriers to follow suit. Story by Jane L. Levere for The New York Times.
How to Find the Best Prepaid Cards
Consumers are loading up on prepaid cards as a convenient way to monitor spending and control debt. But take note: the cards offer limited protection to customers, and some carry heavy fees that mean those benefits come at a stiff price. Banks seeking fresh sources of revenue market prepaid cards to higher-income clients as a budgeting tool. They promote the cards as a way to help retirees, college students and travelers manage cash. Story by Annamaria Andriotis for The Wall Street Journal.
St. Louis Woman Denied Loans, Credit Cards Because Agency Listed Her as Dead
Nothing says “I’m alive” like a lawsuit. A suburban St. Louis woman claims Heartland Bank and the credit agency Equifax declared her dead more than a year ago, a status that has blocked her from refinancing her mortgage or getting a credit card, the St. Louis Times-Dispatch reported. Kimberly Haman, 46, says she got in touch with both agencies several times to say she was still breathing–to no avail. Story by Sasha Goldstein for New York Daily News.
Data Brokers Come Under Fresh Scrutiny
Regulators and lawmakers are stepping up scrutiny of a burgeoning business in which data brokers compile profiles of financially troubled consumers from social media and other sources and market them as sales leads to lenders. The Federal Trade Commission, Consumer Financial Protection Bureau and lawmakers concerned about the identification of financially at-risk consumers are examining the practice and intensifying efforts to police data brokers who may skirt federal law. Story by Stephanie Armour for The Wall Street Journal.
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 14.48 percent, slightly below the average of 14.50 percent last week. Six months ago, the average was 14.35 percent. One year ago, the average was 14.35 percent.