LowCards.com Weekly Credit Card Update–January 6, 2017
A Credit Card Trend That Could Make Building Credit Harder
A new practice in the credit card industry is making signing up for a credit card for the first time a little bit harder. Discover is the latest credit card company to stop allowing new credit card applicants to do so with the help of a cosigner. (For those with existing accounts, there will be no change, but as of December 2016, this practice won’t be allowed for new applicants, a spokesman for Discover said.) Many other banks and card issuers had already discontinued the practice, making the ability to sign up with a cosigner rare. A cosigner can help someone with a lower credit score be approved for a card; both the cosigner and the applicant become equally responsible for paying the account’s bill. Failing to pay the bill can also hurt both parties’ credit. Chase stopped allowing new applicants to use cosigners in 2013, and Citi hasn’t allowed cosigners for more than a decade. American Express also doesn’t allow cosigners. Story by Maria LaMagna for MarketWatch.
Chase Sapphire Reserve Card’s Huge Bonus Will Be Slashed
When a Wall Street banking institution starts throwing 100,000-point bonuses at credit card customers, it may be best to grab them before they inevitably disappear. And so it goes with Chase Sapphire Reserve, a card that the bank, JPMorgan Chase, introduced last summer. The bank offered a sign-up bonus worth $1,500 to people who spent $4,000 on the card in the first three months they had it and then redeemed the bonus for travel. Now the bank is cutting the bonus in half. Jan. 12 will be the last day that people can earn it by applying for the card online, though people who apply at a bank branch will still be able to get the bonus until March 12. You need not be a current bank customer to apply at a branch. Even without the outsize bonus, which was very rare in the history of credit card bonus offers, the card is likely to remain popular. While it has a steep $450 annual fee, cardholders receive a $300 credit each year for any travel spending they put on the card. And customers earn three points for every dollar they spend on all travel and dining. Story by Ron Lieber for The New York Times.
Don’t Be ‘Anchored’ When Your Credit Card Bill Arrives
Do you carry a balance on your credit cards from month to month? If so, you’re not alone. Three in 10 credit card holders, about 113 million credit card accounts in total, carry balances. Those cardholders pay the minimum or near minimum, and it’s collectively costing them millions of dollars in needless interest payments, according to new research. A phenomenon called “anchoring” is to blame for credit card holders paying just the minimum, according to the co-authors of the research. In the world of behavioral finance, anchoring is people’s tendency to rely on a single piece of information, sometimes the first they see, rather than considering the whole. When credit card customers see the prominent “minimum amount due” on their bills, many act on that alone. The minimum payment typically represents 1% to 2% of the outstanding credit card balance, the amount needed to stay in good standing with the lender and avoid any late fees or trigger higher interest rates. But customers are charged interest on whatever amount they don’t pay off, racking up interest charges. Story by Robert Powell for USA Today.
TransUnion, Equifax Fined by CFPB for Deceiving Consumers
Credit reporting agencies TransUnion and Equifax were fined by the Consumer Financial Protection Bureau for deceiving consumers about the usefulness and actual cost of credit scores they sold. The CFPB felt these credit reporting agencies were encouraging consumers to sign up for expensive recurring payments under false claims. Equifax was fined a total of $6.3 million: $3.8 million will go to affected consumers, and $2.5 million to the CFPB’s civil penalty fund. TransUnion was fined a total of $16.9 million: $13.9 million will be dispersed to eligible customers who may have been affected by the practices in question, and $3 million goes to the CFPB civil penalty fund. In addition to paying the fines, TransUnion has agreed to adjust its advertising practices to help consumers better understand what services they are receiving (what is included with their credit scores, credit monitoring, etc.). The company must also request a consumer’s consent for a product that is on a recurring billing cycle after a free trial period. Story by John Oldshue for LowCards.com.
Retailers Ask Congress To Please Not Roll Back Dodd-Frank Debit Card Reforms
Both the banking industry and conservative lawmakers are hoping that the incoming Trump administration will agree to repeal the 2010 Dodd-Frank Financial Reforms, but many in the retail world are calling on Congress to retain at least the portion of the law involving debit card transactions. In a letter sent to Senate Majority Leader Mitch McConnell, Minority Leader Chuck Schumer, Speaker of the House Paul Ryan, and House Minority Leader Nancy Pelosi, a coalition of dozens of retail trade associations advise against throwing out all of Dodd-Frank. The organizations, including the National Retail Federation, National Grocers Association, and National Restaurant Association, are specifically worried about the possibility of repealing what’s known as the Durbin Amendment to the 2010 law. This amendment was intended to lower costs to retailers and increase competition in the market, dominated by Visa and MasterCard, for processing debit card transactions. Story by Ashlee Kieler for Consumerist.
Plenty of Users Sticking with Yahoo Despite Data Breaches
Yahoo hasn’t seen a major impact on traffic after it disclosed two huge data breaches last year, according to Verto Analytics, which measured mobile and Web traffic on Yahoo sites. One breach, disclosed in mid-December, affected more than 1 billion accounts in 2013. The other, made public in September, impacted at least 500 million accounts in 2014. The Sunnyvale company had nearly 45.7 million users on its services on Sept. 1, several weeks before the company publicly disclosed the 2014 data breach, and it stayed roughly steady despite the announcement. On Dec. 26, the most recent data available and nearly two weeks after Yahoo announced the 2013 breach, the number of users was 38.5 million. Traffic overall was down in mid-to-late December in the range of high 30 million to low 40 million. Verto said the cause could be seasonal, with people not going online as often during the holidays. Story by Wendy Lee for the San Francisco Chronicle.
CFPB Reports 32% Increase in Credit Card Complaints
According to the latest Monthly Complaints Report from the Consumer Financial Protection Bureau, credit card complaints from September to November 2016 increased 32% over year-ago levels. Student loans had even higher complaints during this three-month period, jumping up 120% from 2015 to 2016. The companies that had the largest volume of CFPB complaints on credit cards during the September to November time period were Citibank, Capital One, JPMorgan Chase, and Synchrony Financial. Story by Lynn Oldshue for LowCards.com.
5 Mobile Payment Trends to Watch in 2017
Each year brings new possibilities in mobile device technology. Smartphones have become more than just texting machines; they are now mini-computers, personal assistants and virtual shopping carts. More and more consumers would be lost without their smartphone, relying on it to get through the day. Given the advances and rapid rate of new technologies, smartphones have become essential to how we live our lives. Technologies including mobile wallets, on-demand apps, a new era of digital assistants, and enhanced connectivity through near field communications (NFC) and Bluetooth are transforming the way consumers interact and rely on their phones. The following takes a closer look at the top five mobile payment trends for 2017. Story by Scott Blum for Mobile Payments Today.
Topps Data Breach Exposes Months of Credit Card Data
Trading card maker Topps recently began notifying an undisclosed number of customers that their names, email addresses, mailing addresses, phone numbers, credit or debit card numbers, expiration dates and verification numbers may have been stolen by “one or more intruders” last fall. Any customers who placed orders through the Topps website between July 30, 2016 and October 12, 2016 may be affected. Story by Jeff Goldman for eSecurity Planet.
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, slightly higher than last week’s average of 14.90 percent. Six months ago, the average was 14.68 percent. One year ago, the average was 14.87 percent.