LowCards.com Weekly Credit Card Update–January 17, 2020

LowCards.com Weekly Credit Card Update–January 17, 2020

January 17, 2020         Written By Bill Hardekopf

Banks Reported Blockbuster 2019 Profit with the Help of Consumers’ Credit Card Debt
A growing tide of consumer debt helped propel some of the country’s largest banks to major profits last year. JPMorgan Chase, the country’s largest bank, said it earned a record $36 billion profit last year with credit card loans increasing 8%. U.S. Bancorp said it brought in $7 billion last year with the help of a 7.6% increase in its credit card business. Citigroup, which reported a profit of $19 billion last year, said that its branded cards business increased 8% in North America last year. Even Wells Fargo, which has been struggling to rebound from scandals, reported that credit card loans were up $2 billion during the fourth quarter. Story by Renae Merle for The Washington Post

Here’s the Average Credit Score by Generation
The average credit score was a record-breaking 703 in 2019, and that’s thanks in part to millennials who have achieved a 25-point increase since 2012. That’s according to the 2019 Experian Consumer Credit Review, which also found that the average age Americans are reaching a FICO score of 700 is the lowest it’s ever been, at 54. The spike in millennials’ credit scores can be attributed to many entering the workforce, advancing in their careers and achieving life milestones, such as purchasing a home. Story by Alexandria White for CNBC

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Visa Makes Another Move Beyond Credit Cards with $5.3 Billion Deal for Plaid
The largest player in credit cards is moving further beyond the traditional card-swiping model amid the rise of newer fintech options like Venmo and Betterment. Visa announced that it plans to acquire financial-technology upstart Plaid for $5.3 billion. Plaid, valued at about $2.65 billion in a late 2018 private funding round, allows individuals to connect their bank accounts with newer fintech platforms including Mint, Acorns, PayPal, Venmo and Betterment. The deal continues Visa’s M&A kick, following a busy 2019 in which the company bought cross-border services company Earthport and chargeback-reduction company Verifi, among others. Story by Emily Bary for MarketWatch

Consumers Prefer Chip Cards 5X More Than Magnetic Strip Cards
According to a report from Ingenico Group and FreedomPay, 54% of U.S. consumers choose inserting a chip card as their preferred payment method. This is significantly more than the 11% who prefer swiping a magnetic strip card. Contactless payments are increasing in popularity, though they have not taken off just yet. Only 7% of respondents said they preferred to tap their contactless cards, and 4% chose digital wallets for their payment of choice. The research found that 84% of businesses currently accept contactless payments, but 63% of consumers do not know they can tap-to-pay. Story by John Oldshue for LowCards.com

The Economics of Unused Gift Cards
Most people who receive a gift card are quick to put it to use: More than 70% of all gift cards are redeemed within 6 months of purchase, according to one survey. But after that first 180 days, the rate of use tends to stagnate. At the one year mark, just under 80% of cards are redeemed, and as time passes, they are less and less likely to see the light of day. At any given time, 10% to 19% of gift card balances remain unredeemed, and around 6% of gift cards are never even used. Story by Zachary Crockett for The Hustle

U.S. Banks, Card Companies Catch a Break in China Trade Deal
A trade deal with China has given U.S. banks and financial companies new hope that their decades long attempts to crack the Chinese market may bear fruit. The deal signed Wednesday clears some of the obstacles that have prevented U.S. banks, credit card networks, insurance companies and investors from doing business in China. Story by David Benoit, AnnaMaria Andriotis and Timothy Puko for The Wall Street Journal

6 Credit Card Predictions for 2020
2019 was an exciting year for consumers who are interested in credit cards, as there were plenty of major developments. Cards were relaunched with upgraded benefits and higher rewards rates. Several new cards were released, some by new entrants to the industry such as Apple. The big question now is what’s on the docket for 2020, and it looks like this will be another year with plenty of credit card news. Based on the trends, here are a few predictions for the year. Story in The Motley Fool

First-Ever ‘Use Your Gift Cards’ Holiday Coming Saturday
Now that Black Friday, Small Business Saturday and Cyber Monday are all in our collective rear-view mirrors, welcome to America’s newest shopping holiday, and this one may be the most consumer-friendly of the bunch. This Saturday will mark the first-ever National Use Your Gift Card Day, a nudge to consumers to “Celebrate the Present” they may have received over the holidays rather than allowing their gift cards to potentially diminish in value and eventually expire. An estimated $1 billion in gift cards go unused each year. Story by Mark Fisher for the Dayton Daily News

Why Do 44% Of Millennials Bank With Bank Of America, Chase, And Wells Fargo? Mobile Banking
A new survey found that 44% of Millennials considered one of three megabanks—Bank of America, JPMorgan Chase, and Wells Fargo—their primary bank. On average, four megabanks (BofA, Chase, Citi, and WF) offer nearly 16 of the 18 value-added mobile banking features on their apps. Banks in the $50 billion to $1 trillion range average 10 features, and banks in the $10 billion to $50 billion range have, on average, just seven of the 18 features. Smaller banks are more likely to rely on vendors for their mobile banking platforms. And that makes them dependent on their vendors’ technology roadmaps and development schedules. Story by Ron Shevlin for Forbes

Wells Fargo Ordered to Pay $102.8M in Mobile Deposit Patent Case
Wells Fargo is being ordered to pay $102.8 million in damages after a federal jury in Texas on Friday found the bank infringed on two United Services Automobile Association patents that allow customers to deposit checks using mobile devices. The case marks the second nine-figure judgment against the bank, and in favor of USAA, in the past two months. A separate jury in November said Wells Fargo should pay the military-focused insurer $200 million for infringing two other patents. The bank said it “strongly disagrees” with the verdict, adding that it is considering its options, including an appeal. Story by Dan Ennis for Banking Dive

Equifax Settles Mega-Breach Lawsuit for $1.38 Billion
A federal judge in Atlanta has given final approval to a settlement that resolves a class action lawsuit against credit bureau Equifax, which in 2017 suffered one of the largest data breaches in history. The deal is essentially the same as the final version of a proposed agreement reached in July 2019 with the Federal Trade Commission. Consumers will get free credit monitoring, or if they already had that in place, up to $125 in a cash payment. But the settlement includes a $31 million cap for any such cash payments. It means that the more people who apply for a payment, the more the payment amounts will be proportionally lowered. Story by Jeremy Kirk for Bank Info Security

What Is the Capital One Purchase Eraser?
Capital One’s Purchase Eraser feature does exactly what its name suggests: It allows you to use your accumulated rewards (miles, in this case) to “erase,” or offset, eligible travel purchases that you make with your card. In effect, you get a statement credit for that specific travel expense, at a value of a penny per mile, as long as you make the redemption within 90 days of purchase. Several Capital One products offer this feature. Story by Robin Saks Frankel for NerdWallet

The information contained within this article was accurate as of January 17, 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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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.