LowCards.com Weekly Credit Card Update–January 14, 2021

LowCards.com Weekly Credit Card Update–January 14, 2021

January 14, 2021         Written By Bill Hardekopf

Some Banks Want to Consign Credit Card Interest to History
Interest charges have been one of the defining features of credit cards for decades and so when an employee at a big Australian bank suggested getting rid of them, he was taking a risk. Worried about dwindling credit card usage during the coronavirus pandemic and the rapid rise of startups like Australia’s Afterpay and Sweden’s Klarna Bank that allow consumers to pay for goods in installments, some banks are rethinking what has been one of their most lucrative businesses. National Australia Bank, known locally as NAB, launched a no-interest credit card in September. Users get a fixed line of credit and the bank levies a monthly fee, which is refunded if the customer maintains a zero balance and doesn’t use the card. But if they prove to be successful, Australian banks’ no-interest cards could drive change in other markets. Story by Alice Uribe and Stuart Condie for The Wall Street Journal

‘Buy Now, Pay Later’ Wave Could Boost PayPal Stock, Disrupt Credit Firms
“Most of the major buy now, pay later services are primarily linked to debit cards so they are generally good for Visa and and Mastercard, not bad,” said Lisa Ellis, analyst at MoffettNathanson. “If BNPL really takes off in a large scale, it is primarily bad for the credit card issuers, particularly credit card issuers that appeal to lower-FICO consumers.” She said Visa and Mastercard make more money if consumers buy online products with four installment payments rather than making one payment. The addition of PayPal to the mix could create even more disruption. PayPal launched its buy now, pay later service in late 2020. App users pay 25% of an online item’s cost upfront, and the rest in three installment payments, one every two weeks. PayPal charges no interest. Story by Reinhardt Krause for Investor’s Business Daily

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Black and Hispanic Americans Pay Twice as Much in Bank Fees as Whites
People of color are paying more than twice the amount in banking fees than White Americans, a Bankrate survey found. When asked about fees such as ATM, overdraft and routine service charges, Black adults report shelling out an average of $12 a month for checking accounts at banks or credit unions and Hispanics are paying $14 a month, on average. White checking account holders said they are paying an average $5 per month. Whites were also more likely to have no-fee accounts, with 79% responding they paid no fees. In comparison, 56% of Blacks and 50% of Hispanics had no monthly fees. Story by Michelle Fox for CNBC

Major Credit Card Issuers Are Offering Financial Hardship Help
Although 2021 is the year that the Covid-19 vaccine could offer hope for many Americans, the pandemic’s lasting effects will undoubtedly leave some credit card holders struggling financially and looking for help from their card issuers. Banks, credit unions and other issuers continue to offer credit card hardship programs and other assistance, but such programs typically grant relief on a case-by-case basis and only when requested, which means you’ll have to contact your issuer for help. Most major issuers have dedicated web pages that explain their Covid-19 financial-hardship options. Story by Gregory Karp for The Street

Walgreens Looks to Credit Card, Financial Services to Drive Loyalty and Boost Revenue
Walgreens will offer a growing list of financial products for customers–including a co-branded credit card and a prepaid debit card–as it tries to win more of their wallets and help them manage pricey medical expenses. The credit cards will launch in the second half of this year. They will be part of the Mastercard network and issued by Synchrony. They will be linked to Walgreens’ new loyalty program, which the company relaunched in November with a new name, perks and Covid pandemic-inspired features, such as curbside pickup and delivery through DoorDash and Postmates. Walgreens and its drugstore peers are adapting to fast-changing consumer behaviors that have accelerated during the pandemic. Story by Melissa Repko for CNBC

4 in 5 Americans Happy with Their Credit Cards
In general, consumers with credit cards from major issuers are satisfied with their cards: 83% are either satisfied or very satisfied with their primary credit card, up slightly from the 2019 consumer credit card satisfaction survey. Just 4% said they are unsatisfied. More than three-quarters gave their credit cards high marks for online account access and fraud prevention, and nearly as many said they are happy with billing processes and credit lines. Cost is a sore point for some cardholders. APRs and annual fees are top complaints for 16% and 11%, respectively. Story by Beverly Harzog for US News & World Report

Mastercard Launches Pilot Program Using Smartphones as POS Devices
Mastercard is testing a cloud-based setup that will enable contactless payments acceptance via a mobile phone. This Cloud Tap on Phone will mean that any business, regardless of size, can deliver new and best-in-class contactless consumer experiences using a device they already own: a smartphone. The company said the setup democratizes point-of-sale technology by turning an Android smartphone or tablet into an acceptance device, allowing businesses to accept contactless payments and minimizing the need to invest in hardware terminals or extra features. The new pilot program will test the cloud-based point of sale technology. Story in PYMNTS

Stimulus Check Visa Debit Cards Being Mailed To 8 Million Households
Roughly 8 million stimulus check Visa debit cards are being mailed to households this week. The Economic Impact Payment (EIP) cards were issued by MetaBank as part of the second round of COVID-19 stimulus money. Stimulus funding under the CARES Act totaled more than $270 billion. Millions of payments have already been made via direct deposit and paper checks, with the goal of quickly delivering assistance. The EIP cards will arrive by the USPS in a white envelope that prominently displays the U.S. Department of the Treasury seal. Story in PYMNTS

Visa Abandons Planned Acquisition of Plaid After DOJ Challenge
Visa abandoned its $5.3 billion planned acquisition of financial-technology firm Plaid Inc. amid a Justice Department antitrust lawsuit that challenged the deal. The department sued to block the deal in November, alleging the acquisition would allow Visa to unlawfully maintain a monopoly in the online debit card market. Plaid, the government argued, was a nascent but important competitive threat to Visa, and eliminating that threat would lead to higher prices, less innovation and higher entry barriers for online debit services. Story by Brent Kendall, AnnaMaria Andriotis and Peter Rudegeair for The Wall Street Journal

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Pandemic Dramatically Sped Up Shift to Online Shopping
Online shopping became essential in 2020, increasing by about 20% from the previous year, said Mastercard CEO Michael Miebach. While some consumers are looking forward to visiting local businesses again when it’s safe, that growth rate won’t go back down to slower pre-pandemic figures. Going forward, consumers will be more likely to make repetitive purchases of everyday items online, having learned how to do this over many months of lockdowns and business closures. In-store purchases may be more limited to purchases that consumers want advice from knowledgeable retailers before making. Story by Laura Hautala for CNet

Gemini is Launching a Credit Card with Bitcoin Rewards
Cryptocurrency exchange company Gemini is acquiring Blockrize and announcing a new product based on Blockrize’s work. Later this year, the company is launching a credit card that works like a regular credit card, but you earn bitcoin rewards based on your purchases. The credit card will work like any other credit card and will be available in the U.S. Customers will earn up to 3% in bitcoin rewards. This isn’t the first time a company is announcing a credit card with bitcoin rewards. BlockFi already announced its own card back in December. Story by Romain Dillet for TechCrunch

NTT DATA and Conferma Pay Bring Touchless, Virtual Payments to Hotels
NTT DATA and Conferma Pay, a provider of virtual payments technology have partnered together to bring virtual payments to hotels and eliminate the need for paper-based actions such as faxes or bills. With virtual card payments the check-in and check-out process is a touchless, streamlined experience. Manual offline chargebacks are eliminated as well as manually entered payments for processing or entering key card numbers into a merchant terminal. Through the new system once a guest confirms a room is booked with a virtual payment, they will be taken to a secure digital billing portal that eliminates card exposure. Story in Mobile Payments Today

LowCards.com simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card. Created by Hampton & Associates, the company has been analyzing the credit card industry and supplying objective websites on various consumer expenses for 20 years. For more information, contact Bill Hardekopf at 205-985-9725 or billh@LowCards.com. Follow our tweets: @lowcards

The information contained within this article was accurate as of January 14, 2021. 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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bill-hardekopf

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.