LowCards.com Weekly Credit Card Update–February 14, 2020

LowCards.com Weekly Credit Card Update–February 14, 2020

February 14, 2020         Written By Bill Hardekopf

Credit Card Debt in U.S. Rises to Record $930 Billion
Credit card debt rose to a record in the final quarter of 2019 as Americans spent aggressively amid a strong economy and job market, and the proportion of people seriously behind on their payments increased. Total credit card balances increased by $46 billion to $930 billion, well above the previous peak seen before the 2008 financial crisis, according to data released by the Federal Reserve Bank of New York on Tuesday. Story by Yuka Hayashi for The Wall Street Journal

Apple Will Manage 10% Of Global Credit Card Transactions By 2025
Apple Pay is a sleeper billion-dollar business. Despite launching just a few years ago in only one country, Apple Pay now accounts for 5% of all global credit card purchase volume, according to financial research firm Bernstein. The World Payments Report says that global non-cash transaction volumes hit $539 billion in 2017, and were growing at 12% annually. And that means Apple can collect a lot of money along the way. Apple Pay doesn’t return much revenue for Apple per transaction: it’s just another way of using your credit card. Every time you use it, however, Apple gets a .15% cut of that payment. According to one estimate by 9to5Mac, if just 5% of transactions happen via Apple Pay, Apple would make $525M just in the United States at 2018 transaction volumes. At 10%, that’s over a billion dollars. Story by John Koetsier for Forbes

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Here’s a Top Reason Americans Are Carrying an Average Credit Card Balance of Over $6,200
Americans may have a love-hate relationship with their credit cards, but that’s not preventing them from piling on debt. The country’s outstanding credit card and other types of revolving debt have jumped almost 20% from a decade ago, reaching an all-time high of about $1.1 trillion, according to a recent study from CompareCards. The average balance on a credit card is now almost $6,200, and the typical American holds four credit cards, according to the credit bureau Experian. Credit card issuers are also giving Americans more room to run up debt, boosting the typical credit limit by 20% over the last decade to $31,000. Story by Aimee Picchi for USA Today

Many Low-Income Californians Don’t Use Credit Cards. Should Stores Be Required to Accept Cash?
A small, but growing number of businesses are no longer accepting cash. Owners say that accepting only credit cards, debit cards or digital wallets like Apple Pay is more efficient and lowers the risk of being robbed. Electronic forms of payments are gaining popularity with consumers. But the cash-free trend has raised concerns that such shops exclude customers who rely exclusively on cash. Sen. Jerry Hill, a Democrat from San Mateo, says this amounts to discrimination against people without credit cards or bank accounts, who tend to be low-income. Story by Jackie Botts for Cal Matters

Mastercard Given Approval to Prepare for Entry into China’s Payments Market
After years of unsuccessful attempts to enter China’s massive $27 trillion payments market, Mastercard announced today it has won approval from the People’s Bank of China (PBOC) to begin formal preparation to set up a bank card clearing institution in China. The news is a significant step toward Mastercard being able to do business in China, where large, domestic players currently dominate. Story by Sarah Perez for Tech Crunch

What Visa’s Swipe Fee Changes Mean For Your Wallet
The changes will introduce a hike to “card-not-present” transactions, which can occur when payment is made online or over the phone. Traditional Visa cards used for these transactions will see swipe fees increase from $1.90 to $1.99 on a $100 transaction, and premium Visa cards will see a 10-cent hike from $2.50 to $2.60. Using a premium credit card at the grocery store or large supermarket for a $50 transaction, however, will incur a smaller fee of 77 cents, compared to its old fee of $1.15. Story by Kelly Anne Smith for Forbes

Justices to Consider Constitutionality of CFPB Structure
The congressional commission that investigated the 2008 financial crisis concluded that the United States’ consumer-protection system was “too fragmented to be effective.” In response to that finding, in 2010 Congress created the Consumer Financial Protection Bureau as part of the Dodd-Frank Act. The CFPB is led by one director appointed by the president and confirmed by the Senate to serve a five-year term; once the director has been confirmed, the president can only remove her for “inefficiency, neglect of duty, or malfeasance in office.” On March 3, the Supreme Court will hear oral argument in a challenge to the constitutionality of that leadership structure. Story by Amy Howe for SCOTUS Blog

Ramp, a Corporate Credit Card to Rival Brex and Amex, Raises $25 Million
A new credit card startup is taking aim at American Express and other stalwarts that have long dominated corporate expense accounts. Ramp, a New York-based fintech firm whose founders sold their last venture to Capital One, has raised $25 million and signed up nearly 100 businesses to its card, the company announced. What sets Ramp apart from its competitors, according to its CEO, is that it’s designed to help card holders save money. He claims to have helped customers spend an average of 2% less so far (savings of as much as $250,000 for one company), using technology to identify “wasteful spending.” Story by Jen Wieczner for Fortune

Customers Increasingly Hungry For Mobile Payments
The biggest point in the Wirecard research is that mobile payments are now considered the most important shopping-related technology to improve customers’ buying experience. That’s the case for 58 percent of customers, followed by biometric-linked payments or cashierless stores for 45 percent. Augmented and/or virtual reality store experiences came in third with just 25 percent of the total. There’s also a growing demand for biometrics, as 68 percent of customers expressed an interest in that. Story by Steven Anderson for Payment Week

Single People: It’s Your Money. Here’s What to Do With It
It’s all on you. When you’re single, you don’t have a spouse helping you pay bills or a partner nagging you to spend less and save more. How much money you make and what you do with that cash is up to you alone. and only you deal with the repercussions of your financial mistakes. To live your best life as captain of your own ship, you’ve got to commit to making the right choices. Here are 11 financial tips for singles to heed. Story by Nicole Dow for The Penny Hoarder

Your Credit Card Benefits Just Got Cut. What Do You Do?
Credit card issuers are raking in revenue at a rapid clip, and higher annual fees are likely a big contributor: Annual fee revenue was about $600 million in the first quarter of 2015, but by the first quarter of 2018, it had nearly doubled to a whopping $1 billion, according to 2019 Consumer Credit Market report by the CFPB. Banks have the legal right to stop offering you benefits like statement credits and lounge access, even if they provided them to you when you originally signed up. They also have the right to change the rates and fees from what you agreed to in the first place (though limitations may apply). And although banks have to give you notice about changes to your rates and fees, they’re not legally required to give you advance notice of changes to your rewards. Story by Sally French for The New York Times

The information contained within this article was accurate as of February 14, 2020. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.