LowCards.com Weekly Credit Card Update–January 9, 2015
Why New Credit Cards May Fall Short on Fraud Control
Big U.S. banks are steering clear of an advanced security measure used in credit cards around the world, opting for a system that is more convenient for shoppers but may leave them vulnerable to fraud. This year, firms are expected to roll out more than a half-billion new credit cards embedded with computer chips that create a unique code for each transaction, making counterfeiting much more difficult. In a retreat for the industry, however, the new cards don’t use some technology that could prevent fraud if a card is lost or stolen. Instead of requiring customers to put in a personal identification number, or PIN, the new cards need users to authenticate credit-card transactions the same way they often do now, with a signature. PINs are widely considered to be more secure than signatures, which can be easily copied. Story by Robin Sidel for The Wall Street Journal.
Credit Card Data Breaches Didn’t Alter Holiday Shopping
The rash of credit card breaches at major retail chains during the past year had a surprisingly low impact on holiday shopping, according to a recent survey by LowCards.com. Only one out of six respondents (17%) said credit card breaches had any influence on how they paid for their purchases, and an almost identical number (15%) said these hacks affected where they shopped. Some analysts thought consumers may be reluctant to use credit cards or shop at stores that had been breached. Story by Bill Hardekopf for LowCards.com.
Find a Fixed Rate Credit Card
With interest rates likely to start rising later in 2015, now is a good time to think about how to keep the interest payments on your credit cards from creeping up, too. The vast majority of credit cards today have variable annual percentage rates, typically tied to an index. The number of cards with fixed APRs has waned, largely because legislation that took effect in 2010 made raising fixed rates more difficult for issuers. But some small banks and credit unions still offer fixed-rate cards, so it’s worth inquiring locally. Story by Lisa Gerstner for Kiplinger.
Credit Card Readers: Small Businesses Now Have More Options
Small business owners looking to ditch traditional credit card readers have more options than ever. Online retailers Amazon and Etsy are just two of the latest companies to offer mobile credit card readers to small companies, joining the likes of Square, PayPal and Intuit. Mobile credit card readers are small devices that stick into a smartphone or tablet and allow credit cards to be swiped and accepted from anywhere. Small business owners say mobile readers can be cheaper than traditional in-store credit card readers, which often charge higher fees. Story by Joseph Pisani for the Associated Press.
Major Data Breaches of 2014
A year ago, the country was rocked by the Target data breach. Previously, consumers rarely thought about the security on their credit or debit cards. But all that changed when Target reported that 40 million debit and credit card numbers had been stolen during the holiday shopping time last year. Little did we know that data breaches would be the top story that haunted the card industry throughout 2014. Here is a look back at 20 of the major data breaches of the past year. Story by Bill Hardekopf for LowCards.com.
Chick-fil-A Investigates Possible Data Breach
Chick-fil-A Inc. is investigating a possible data breach last year at some of its restaurants, the company reported Dec. 31. The Atlanta-based quick-service chicken chain, which has more than 1,800 units, said it was first alerted on Dec. 19 to the “suspicious” payment card activity at “a few” of its restaurants. The company said it began investigating immediately, working with data security firms, federal law enforcement and payment-industry contacts. Story by Ron Ruggless for Nation’s Restaurant News.
Morgan Stanley Fires Employee Over Client Data Leak
Morgan Stanley fired one of its financial advisers after it accused him of stealing account data on about 350,000 clients and posting some of that information for sale online, in potentially the largest data theft at a wealth-management firm. Morgan Stanley said its employee downloaded information on about 10% of its wealth-management clients. The bank said that on Dec. 27 it discovered data related to about 900 of its client accounts during a routine review of public websites known to traffic in such information. The data, which included account names and numbers, states of residence and asset values, appeared on the Internet “briefly.” The bank said no clients were financially harmed. Story by Justin Baer for The Wall Street Journal.
Payday Lenders Could Face Fed Rules for the First Time
The payday loan industry, long the target of consumer advocates, is now in line to be regulated by the federal government for the first time. The Consumer Financial Protection Bureau is working on writing rules to oversee the $46 billion short-term loan industry. They could include requirements that the lenders first check whether borrowers have the ability to repay the loan. Payday lenders have argued that such a regulation would place a burden on them and could remove the option of getting one of these loans, typically seen as a last chance for consumers in need of quick cash. In a payday loan, borrowers essentially pledge their paycheck as security by writing a check to the lender in advance of their payday or by giving the lender authorization to draw money from their bank account on payday. Story by Mitch Lipka for CBS Moneywatch.
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 14.44 percent, slightly lower than last week’s average of 14.45 percent. Six months ago, the average was 14.50 percent. One year ago, the average was 14.48 percent.