LowCards.com Weekly Credit Card Update–February 7, 2014
Hotel Company Investigates Data Breach, Card Fraud
White Lodging Services, a hospitality company that manages 168 hotels in 21 states–under franchises from Hilton, Marriott, Sheraton, and Westin—is investigating reports that it suffered a data breach that lasted from March 2013 until the end of the year. Word of the breaches first surfaced Friday when security journalist Brian Krebs reported that unnamed card processors had tied fraud involving hundreds of credit cards to a number of Marriott properties operated by White Lodging Services, which is based in Merrillville, Ind. The affected hotels were located in Austin, Texas, Chicago, Denver, Los Angeles, Louisville, Ky., and Tampa, Fla. Story by Mathew J. Schwartz for Information Week.
Newly Wary, Shoppers Trust Cash
Like dieters vowing to trade cupcakes for carrots, a number of American shoppers are making a new pledge: cash only. The drumbeat of disclosures about credit and debit card breaches at major retailers (and hints of more to come) has unnerved consumers to the point where chatter online and at the water cooler is filled with people promising to curb their plastic habits. With Senate hearings on the recent Target breach and the security of consumer data scheduled for Monday and Tuesday, discussion about what consumers can do on their own is likely to grow even louder. Story by Hilary Stout for the New York Times.
Millennials Cutting Back on Credit Cards, But Struggle with Credit Scores
Millennials are carrying far fewer credit cards with smaller balances than older consumers but are still struggling with their credit scores and debt utilization. Experian’s Fourth Annual State of Credit analyzed the credit card habits of four generations: Millennials (19-29), Generation X (30-46), Baby Boomers (47-65) and the Greatest Generation (66+). Millennials carry 40% less credit card debt than the average person. Consumers who are 19-29 years old have $2,682 in credit card debt compared to the national average of $4,501. In addition, Millennials have the fewest number of bank cards of the four generations: the average millennial has 1.57 bank cards versus a national average of 2.19. In fact, a greater number of younger people continue to shy away from carrying any cards. In 2005, the number of people between the ages of 18 and 30 who did not own a credit card was 9%. In 2012, that number rose to 16%. Story by Bill Hardekopf for LowCards.com.
Busting a Credit Card Hacker
In 2007, Ukrainian Maksym Yastremsky was the most prolific credit card hacker in the world. He’d stolen over 40 million cards from mostly U.S.-based retailers. He’d cost credit card companies over $11 million. In 2008 he was arrested in Turkey after the U.S. Secret Service infiltrated his network. Here’s how they did it. Story by Steve Hargreaves and Kathleen Johnston for CNN Money.
Target Works on Security-Heavy Credit Cards After Breach
Target Chief Financial Officer John Mulligan said the company was speeding up its implementation of high-security credit cards. The credit cards come embedded with a tiny microprocessor chip, which is said to beef up security and make it more difficult for cybercriminals to access user data. Target had already begun work on the cards before the hack, but it is now accelerating this $100 million program. Mulligan said that the technology should be ready for customers on Target’s REDcards by early 2015, which is six months before the scheduled release. Story by Dara Kerr for CNet.
Unease Weighs on MasterCard’s Results
MasterCard’s fourth quarter profit rose 3% as cardholder spending increased, though an increase in payments the company made to its bank partners and slowing growth raised some red flags. The rebate and incentive payments, which MasterCard pays to banks when signing new contracts and renewing agreements, increased 23% to $925 million. Higher rebates and incentives can be viewed as a good sign for the company because it means it is winning new deals, but it also can be a concern for investors who worry about banks demanding better pricing from MasterCard. Story by Andrew Johnson for The Wall Street Journal.
Target Vows to Speed Anti-Fraud Technology
A top executive of Target told a Senate committee on Tuesday that the company was accelerating plans to adopt a technology widely used in Europe but rare in the United States that reduces potential for credit card fraud, and lawmakers from both parties called on other businesses to do the same. The session, a Senate Judiciary Committee hearing on privacy in the digital age, was the first time that executives from Target and Neiman Marcus had been subject to detailed public questioning about the detection and handling of the recent data security breaches that exposed the data of millions of customers. Story by Hilary Stout for the New York Times.
Richard Cordray to Play “Jeopardy” for the Second Time
The nation’s top bank watchdog will appear in a very different role Wednesday–as a “Jeopardy!” contestant. Richard Cordray, head of the U.S. Consumer Financial Protection Bureau, will turn up on the quiz show as part of a tournament of champs from decades past. In 1987, Cordray won $45,303 over the course of an entire week, earning more “than I did [clerking] for the Supreme Court for a year,” he said. Story by Celeste Katz for New York Daily News.
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 14.50 percent, identical to last week. Six months ago, the average was 14.35 percent. One year ago, the average was 14.35 percent.