LowCards.com Weekly Credit Card Update–February 22, 2019

LowCards.com Weekly Credit Card Update–February 22, 2019

February 23, 2019         Written By Bill Hardekopf

Those Credit Card Bonuses May Be Taxable
Have you gotten a bonus from your credit card company for successfully referring friends or family for new cards? You may owe taxes on that bonus. People who thought they were getting a perk with no strings attached are getting 1099 tax forms from some major card brands, including Chase, American Express and Discover. Whether rewards or bonuses are taxable depends on whether they are tied to spending on the card, tax experts say. If you get cash back or rewards from a credit card in exchange for buying things with the card, the Internal Revenue Service generally doesn’t consider the rewards taxable. If you earn a reward or bonus for simply opening an account–or referring a friend who opens a new account–that amount is considered to be taxable. Story by Ann Carrns for The New York Times

Purchases With Plastic Get Costlier for Merchants-and Consumers
Credit card companies are increasing a range of fees that U.S. merchants will pay to process transactions, a move likely to inflame already fractious relations between many businesses and card networks. Visa and Mastercard, the two biggest U.S. card networks, are preparing increases to certain existing fees that will kick in this April, according to people familiar with the matter. Merchants often increase the prices consumers pay following such fee increases, in an attempt to protect their own profits. Roughly 1% to 2.5% of prices for goods and services go to cover card fees, according to people familiar with merchant pricing. Story by AnnaMaria Andriotis for The Wall Street Journal

This Legislation Could Force Stores to Take Your Cash
Stores and restaurants in several states would be required to do something pretty basic if certain lawmakers have their way: accept their customers’ cash. The legislation comes amid a worldwide move toward cashless payments using cards or mobile devices, which supporters say are safer, quicker and more convenient. But critics say an outright ban on cash discriminates against those without credit or bank accounts, and raises concerns about privacy and data security. The New Jersey Legislature and the Philadelphia City Council have passed measures this year that would ban cashless stores. New York City, Washington, San Francisco and Chicago are weighing similar bills. Story by Karen Zraick for The New York Times

Another Multibillion-Dollar Settlement Won’t Dent Mastercard’s, Visa’s Dominance
Visa and Mastercard are going to have to put a lot of checks in the mail. The U.S. District Court for the Eastern District of New York said in a release Friday morning that an agreement had been reached to settle a class action lawsuit brought by merchants who claimed the card processors had charged them excessive fees on debit and credit transactions. Visa and Mastercard, and certain banks, will pay between $5.54 billion and $6.42 billion on claims from merchants who accepted customer payments via Visa or Mastercard anytime between 2004 and Jan. 25, 2019. The card processors maintain they did nothing wrong and the Eastern District hasn’t determined if they or the plaintiffs are right, the release said. Story by Ben Walsh for Barron’s

Mastercard Renews Effort to Enter Chinese Market
Mastercard, after years of frustrated attempts to enter the Chinese market, is trying again by joining with a Chinese company close to the regulator in charge of approving credit card businesses. The card network plans to set up a joint venture with NetsUnion Clearing Corp., a clearing house for online payments more commonly known as Wanglian, according to a person familiar with the matter. The person said Mastercard will then refile its application with the People’s Bank of China, which is in charge of approving card-clearing services. American Express won approval last year to set up card-clearing services, also as a joint venture with a domestic fintech firm instead of as a wholly-owned business. Story by Chao Deng and Stella Yifan Xie for The Wall Street Journal

Mobile Coupons Drive Loyalty, Customer Engagement
As couponing continues to evolve, brands and retailers alike must pay attention to text messaging, as it’s going to quickly disrupt the way people access and use deals to make purchases. With 90 percent of all text messages read within three minutes of delivery, this is an exciting opportunity to help businesses deepen brand affinity and engagement with highly personal mobile deals. Because when it comes down to it, the golden rule of 21st century retail is personalization – and what’s more effective to garner long-term brand loyalty than offering consumers with deals tailored exactly to their personal needs? Here are three ways that the next generation of messaging is transforming the power of couponing. Story by Katie Wilson for Mobile Payments Today

Gambling Industry Report Finds 95% Growth In Mobile Transactions
The last five years are marked by the continuing expansion of mobile gambling. Not only are players using their mobile devices to gamble, they are using them to pay for their online gambling. Back in 2012, the growth rate for mobile financial transactions compared to 2011 was just 6%. In 2018 the growth rate had soared to 95%. A study of 518 million transactions from more than 100 gambling operators and platforms found that 70% of all online gambling transactions are now made using mobile devices. Story by Joss Woods for Legal Sports Report

How Will People Bank in the Future?
What will replace the personal computer, smartphone and other digital devices that dominate transactional banking today? With 5G networks about to roll out, augmented reality and mixed reality becoming more pervasive, and AI, voice devices, and other Internet of Things (IoT) integrations, could completely new forms of engagement be on the horizon? Story by Jim Marous for The Financial Brand

What is the Earned Income Tax Credit?
It is tax time in the United States, and many Americans are trying to make sense of the new tax code and hoping they qualify for a return instead of having to pay. One thing that could ensure a return is qualifying for the Earned Income Tax Credit (EIC or EITC), which is a benefit for those who have low to moderate income. To qualify for the Earned Income Tax Credit, you must meet a number of criteria. Story by Bill Hardekopf for LowCards.com

Apple, Goldman Sachs Team Up on Credit Card Paired With iPhone
Apple and Goldman Sachs plan to start issuing this spring a joint credit card paired with new iPhone features that will help users manage their money. The card will be rolled out to employees for testing in the next few weeks and officially launch later this year, according to people familiar with the matter. The companies hope to lure cardholders by offering them extra features on Apple’s Wallet app, which will let them set spending goals, track their rewards and manage their balances, the people said. Story by Tripp Mickle, Liz Hoffman and Peter Rudegeair for The Wall Street Journal


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.
View all posts by Bill Hardekopf
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