LowCards.com Weekly Credit Card Update–January 13, 2017
Amazon’s New Credit Card Primed To Disrupt Retail
Amazon announced its latest benefit for Amazon Prime members: an Amazon Prime credit card that offers 5% off every Amazon purchase, plus 2% back at restaurants, gas stations and drugstores and 1% back on every other purchase. The credit card is included in your Amazon Prime membership and therefore has no additional annual fee. The credit card waives all foreign transaction fees, which makes the card international travel friendly. Amazon wants to increase its Prime membership base, which has been a major profitability and growth engine for Amazon (the company says Prime members spend twice as much as regular members, given the unlimited free shipping) and an effective strategy to retain its customer base. According to Consumer Intelligence Research Partners, nearly half of U.S. households have an Amazon Prime membership. The 5% cash back is a push to migrate more consumers from brick and mortar retailers (like Target and Walmart) to online (Amazon). By bundling the credit card with Amazon Prime, Amazon has an advantage over its retail competitors by providing free streaming content on top of the extra credit card benefits. Story by Zack Friedman for Forbes.
Supreme Court Considers Role of Free Speech in Explaining Credit Card Fees
At a lively Supreme Court argument on Tuesday, the justices considered how the First Amendment applies to credit card fees. The case was the latest battle in a continuing dispute between some merchants, who want to avoid fees charged by credit card companies by steering customers toward cash, and credit card companies, which seek to make the fees invisible to consumers. The New York law at issue in the case, similar to ones in nine other states, bars merchants from imposing surcharges when their customers use credit cards. Discounts for using cash, on the other hand, are permitted. That distinction runs afoul of the First Amendment, said Deepak Gupta, a lawyer for several merchants challenging the law. Story by Adam Liptak for The New York Times.
Consumer Credit Delinquency Rates Expected to Rise in 2017
Credit card serious delinquency rates (for payments that are 90 or more days past due) have also been increasing since fourth quarter 2014. The rate was 1.48 percent in fourth quarter 2014, 1.59 percent in fourth quarter 2015, 1.71 percent in fourth quarter 2016 and is projected to be 1.82 percent in fourth quarter 2017. The percent change for credit card delinquencies in the last five years (2012-2017) is 3.7 percent, according to the market forecast. The fourth quarter projection for credit card delinquency rates is the highest level since fourth quarter 2011 and a 6.1 percent increase from the rate expected at the end of this year. Story in ACA International.
5 Ways to Pay Down Holiday Credit Card Debt
The holidays may be over, but for many Americans the credit card debt remains. Pre-holiday polls showed that the average shopper planned to spend upwards of $1,000 on gifts, food, and decorations. For those who charged purchases and are now trying to pay down the balance, here are a few tips to reach the goal faster. Story by Barbara Kiviat for Consumer Reports.
A Start-Up Wants to Save You Money in a Way Most People Don’t Know Exists
Kard aims to help consumers maximize their credit card rewards programs by making them aware of the best merchant-specific offers when online shopping. To use Kard, you simply install a free Chrome extension, which you can do on Kard’s website, and type in the credit cards you use. You don’t give any personal information, just the type of card. Then, whenever you’re shopping online, Kard will notify you if any offers are available and help you activate the deal. “With the extension, you’ll get a little push notification in the top right-hand corner of your browser that says something like, ‘Use your Amex card and get $25 off your $50 purchase.’ Story by Kathleen Elkins for CNBC.
Coming to Wells Fargo: Card-Free ATMs
You’ll soon be able to take cash out of a Wells Fargo ATM without using a card. Starting this spring, customers can use their smartphones to withdraw money. Here’s how it will work: You’ll log in to the Wells Fargo app and request an eight-digit access code. At the kiosk, you’ll enter the access code and your regular ATM code to start the transaction. Wells Fargo is eager to restore its reputation after the revelation that it created millions of bank and credit card accounts without telling customers. New accounts plunged last year after the scandal broke. Wells Fargo plans to convert all its 13,000 ATMs to include the card-free option. Wells says it expects to be the first bank to do the full conversion. Story by Aaron Smith for CNN.
Walmart and Visa End Canadian Credit Card Dispute
In June, Walmart announced that shoppers in Canada would no longer be able to use their Visa at the retailer due to a dispute about transaction fees. Late last week, though, Walmart and Visa finally reached an agreement. This summer, Walmart cited “unacceptably high” card transaction fees when they announced their decision to no longer accept Visa cards in Canada. The company, which pays more than $100 million in credit card transaction fees, said that lower transaction fees were necessary to “keep our prices low and continue saving our customer’s money.” For its part, Visa told cardholders and other Canadian merchants that it offered Walmart “one of the lowest rates of any merchant in Canada” and “they are using their size and scale to give themselves an unfair advantage.” Before an agreement was reached, only two markets had been affected by Walmart’s ban. Three Walmart stores in Thunder Bay stopped accepting Visa in July, and in October, 16 stores in Manitoba quit accepting the card. Story by Bill Hardekopf for LowCards.com.
5 Business Credit Card Fees that are Tax-Deductible
Many of us use credit cards every day. We earn rewards points and make shopping and paying for goods easier through the convenience of not having to carry around cash. Those same perks hold true for business cards as well. But if your business credit card has expenses and fees attached to it, do you know which of those are tax deductible? If you don’t, you’ll be happy to learn that it’s actually quite a few. It turns out that some of the best business credit cards are a lot better at helping you get a break on your taxes than personal cards. In fact, nearly every fee that you incur on your business card can be written off. Story by Sean Bryant for USA Today.
Will India Get Rid of Plastic Money by 2020?
After India’s government took 86% of currency out of circulation a couple of months ago, its main policy think-tank has a new plan for the country: rendering plastic money “irrelevant” by 2020. Amitabh Kant, Chief Executive Officer of NITI Aayog, which helps the government formulate long-term policies, said Sunday that India was in the midst of a “huge disruption” in financial technology and innovation, which will enable the country to transition from using plastic money to mobile transactions. “By 2020, India will make all debit cards, all credit cards, all ATM machines, all [point-of-sale] machines totally irrelevant,” Mr. Kant said at the Pravasi Bharatiya Divas event inaugurated by Prime Minister Narendra Modi in Bangalore. “In 30 seconds flat, we’ll all be doing our transactions by using our thumb.” Story by Karan Deep Singh 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 14.95 percent, identical to last week. Six months ago, the average was 14.66 percent. One year ago, the average was 14.89 percent.