LowCards.com Weekly Credit Card Update–January 20, 2017
Gift Card Spending Hits $46 Billion
Adults across the United States spent $46 billion on gift cards in the last 12 months. Of this amount, consumers spent $28 billion on gift cards for others, and they spent $11 billion on gift cards they kept for themselves. Consumers also received $7 billion worth of gift cards from their employers, data showed. As expected, Christmas reigns as the largest gift card giving occasion by dollar value, with consumers spending more than $9 billion on gift cards for others, accounting for 33% of gift card spend. Birthdays followed, with almost $7 billion spent on gift cards as birthday gifts. Another 26% of spending on others falls outside of holidays, with giving tied to “doing something nice,” “rewarding someone,” and “saying thank you,” the report said. In terms of dollars and percentages, 25-34 year-olds are heavy gift card givers, spending more than $7 billion on others (26% of the total), while 18-24 year-olds spend the least. Adults aged 35-44 also account for a disproportionate share of gift card spending on others ($6 billion). Story by Deena M. Amato-McCoy for Chain Store Age.
2016 Was a Record Year for Data Breaches
U.S. companies and government agencies suffered a record 1,093 data breaches last year, a 40 percent increase from 2015, according to the Identity Theft Resource Center. Headline-grabbing hacks, with victims ranging from Wendy’s to the Democratic National Committee, are increasing despite regulatory scrutiny and more aggressive cyber-security spending. Worldwide spending on security-related hardware, software and services rose to $73.7 billion in 2016 from $68.2 billion a year earlier, according to researcher IDC. And that number is expected to approach $90 billion in 2018. Story by Olga Kharif for Bloomberg.
CFPB Reports 1 in 4 Consumers Contacted by Debt Collectors Feels Threatened
According to a new report released by the Consumer Financial Protection Bureau, 27% of consumers who have been contacted by a debt collection agency in the last 12 months say they “felt threatened” by the company’s actions. In addition, three out of four consumers said that debt collectors did not honor their request to cease contact. In addition to feeling threatened, many consumers were harassed about debt under false information. 53% said some element of the debt collection was incorrect: the collectors sought the wrong about of money, they contacted the consumer about a debt not owed, or the debt belonged to a family member instead. Story by Bill Hardekopf for LowCards.com.
Baltimore Teacher’s ‘Black Lives Matter’ Debit Card Design Denied by Wells Fargo
When customizing her Wells Fargo debit card online, Baltimore high school teacher Rachel Nash had several images to choose from—flowers, the American flag, colorful patterns and puppies. She even had the option of uploading her own image. “I don’t need extra pictures of my dog,” Nash said. Instead, she wanted an image that would make people think, and help her show solidarity with people of color. The 29-year-old, who works for the city public school system, designed a customized card that read “Black Lives Matter” with a fist held in the air, using an image she found on the internet. But Wells Fargo denied the card design, citing guidelines that prohibit political content. Story by Brittany Britto for The Baltimore Sun.
Mastercard `Preying on Millions’ Sparked $17 Billion Fee Lawsuit in UK
Mastercard preyed on more than 46 million unknowing consumers by unfairly charging card fees over a 16-year period, lawyers seeking to bring a 14 billion-pound ($17.2 billion) class-action lawsuit told a London court. The credit card company infringed European Union competition law by imposing high charges to retailers that accepted its cards between 1992 and 2008, Paul Harris, a lawyer for consumers, told the Competition Appeal Tribunal Wednesday. The panel will hold a two-day hearing to decide whether the matter should go to a full trial. It would be the U.K.’s biggest class action and one of the first filed under the Consumer Rights Act 2015. Story by Patrick Gower for Bloomberg.
Wells Fargo to Close Approximately 400 Branches by 2018
Wells Fargo officials announced the bank plans to close more than 400 branches by the end of next year, an effort to cut costs. The bank was involved in a massive scandal last year wherein employees opened fake accounts totaling almost $2 million. The scandal resulted in the company eliminating sales goals for retail bankers and prompted federal investigations, but bank officials say the scandal is not the reason for the branch closings. In a statement from Wells Fargo CFO John Shrewsberry, the bank is merely following a trend carried out by several large retail banks—closing locations and replacing them with automated systems and online bank products. The statement also claims that many of the 200 closures it anticipates this year will be in close proximity to other locations it owns and many of the employees can be transferred to nearby branches, which should limit layoffs. Even after the bank closes an estimated 200 branches in 2018, Wells Fargo would still have 6,065 total branches, more than any other bank in the country. Story by Michael Seale for the Birmingham Business Journal.
Amazon is Crushing Walmart, eBay, and Target in the Growing Mobile Shopping Space
Amazon is already the largest online shopping site in the world, but it’s also showing signs of dominating the next most important shopping platform: mobile shopping. According to a new note published by Oppenheimer this week, Amazon’s lead in the mobile shopping space is growing by a wide margin, tripling the number of US unique visitors to its mobile app over the past two years. Meanwhile, its biggest competitors like Walmart, eBay, and Target saw almost no growth in the same time span. On top of that, Amazon’s mobile app is increasing its penetration rate in the US, with 50% of US online shoppers now on its app. Story by Eugene Kim for Business Insider.
George Soros, Mastercard to Partner to Aid Migrants, Refugees
Billionaire investor George Soros will partner with Mastercard Inc on a venture they said could help migrants, refugees and others struggling within their communities worldwide to improve their economic and social status. The partnership, Humanity Ventures, stems from a pledge Soros made in September to earmark up to $500 million for investments to address challenges facing migrants and refugees. In a joint statement on Thursday, Mastercard and Soros said that despite billions of dollars of humanitarian and development assistance, millions of people remain marginalized, a situation the private sector can help rectify. Humanity Ventures intends to focus initially on healthcare and education, with a goal of fostering local economic development and entrepreneurship. With the creation of Humanity Ventures, Soros could invest up to $50 million to make these solutions more scalable and sustainable, and perhaps encourage smaller projects committed to mitigating the migration crisis. Story by Jennifer Ablan for Reuters.
How to Prevent Gift Card Problems
Gift cards can be great to receive but they may also present you with a host of unexpected problems. If you received gift cards over the holidays, here are some steps you can take to minimize potential hassles. Use your gift cards quickly. Record and register the card numbers. If possible, change the gift card’s security code. Spend all the money loaded onto the card. If you can’t use your gift card, give it to someone else. Story by Jeff Blyskal for Consumer Reports.
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 14.96 percent, slightly higher than last week’s average of 14.95 percent. Six months ago, the average was 14.66 percent. One year ago, the average was 14.89 percent.