LowCards.com Weekly Credit Card Update–July 18, 2014
Credit Card Fees are Killing Small Businesses
There is no real competition in the market for credit and debit card swipe fees. Because Visa and MasterCard control 80% of the card market, they are able to dictate terms. The system they set up is hopelessly opaque and confusing. We have no idea what the fee will be on any particular card when a customer pays with plastic. And there is no real way to reconcile these charges at the end of the month to make sure they are accurate. To make matters worse, there isn’t any transparency around the small piece of the swipe fee that is open to negotiation–the amount tacked on by the processing company, which accounts for about 15% of the total swipe fee bill. Most processors don’t itemize their statements, so we have no way of knowing their slice of the total pie. That makes it almost impossible to go back and ask for a lower rate or comparison shop for a better deal. It’s a system that is ripe for abuse. Story by Michael C. Gibbons for the Detroit Free Press.
The Case for College Students to Have Credit Cards
Incoming freshmen receive dozens of warnings before stepping foot onto their college campus for the first time: Mom and dad caution them to not get carried away with extracurricular activities and instead focus on their grades. Older siblings kindly suggest avoiding any beverage with the word “jungle” in the name. Financial experts yell, scream and throw their arms in the air about avoiding credit cards. While jungle juice should be avoided, there is actually a case for college students to sign up for a credit card. Here are three reasons why a credit card will set them up for a healthy financial future. Story by Erin Lowry for U.S. News and World Report.
VIP Credit Cards Flaunt Steel; Plastic is Fine
Just seeing a high-end credit card promotion hit area mailboxes should be a clue that we’re no longer talking about everyone’s Great Recession. Credit card issuers are making pitches in time for summer vacations, back-to-school sales and holiday spending. During the first three months of 2014, about 992 million credit card offers were mailed to consumers, up about 7% from the same time last year. Lately, mailings are pitching credit cards that offer travel-related rewards, and yes, some high-end annual fees that many consumers would have deemed absolutely nuts when times were crazy-tight. Story by Susan Tompor for Detroit Free Press.
Credit Cards Help U.S. Banks as Trading, Mortgages Slump
The biggest U.S. banks, led by JPMorgan Chase, are benefiting from credit cards amid a decline in mortgage lending and a trading slump. Card revenue rose 3.1 percent to $1.55 billion in the second quarter from a year earlier, JPMorgan said in a statement. Growth in card fees outpaced revenue gains in investment banking, lending and deposits and mortgages for the fourth consecutive quarter. Story by Elizabeth Dexheimer for Bloomberg.
22.8 Million Personal Records of New Yorkers Exposed
Nearly 23 million private records of New Yorkers have been exposed in data security breaches reported by more than 3,000 businesses, nonprofits and governments over the past eight years, New York’s attorney general reported. Deliberate hacking was responsible for 40 percent of the 5,000 incidents, which exposed a majority of the records, followed by lost or stolen equipment, insider wrongdoing and inadvertent errors. Story by Michael Virtanen for the Associated Press.
Consumers Anxious for Chip and Pin Credit Cards
Consumers in the United States are more than willing to transition to chip and PIN cards. In fact, a recent survey indicates the majority of Americans are looking forward to the transition. According to a survey from Vision Critical, 69% of Americans believe that EMV chips will make their purchases more secure. Only 5% believe the chips will lessen the security on their cards. Even though Americans are anxious to use chip-based credit cards, 64% of respondents are currently more likely to pay in cash rather than credit cards because of the recent credit card breaches. 38% said they prefer the idea of chip and PIN over chip and signature, but there is still a big question about whether people will be willing to use these cards when they are available. Story by Bill Hardekopf for LowCards.com.
Be Smart When Trying to Improve Credit Score
If you’re working hard to build your credit, you’ve set your sights on a worthy goal. Having a high credit score makes many aspects of both your personal and financial lives much easier. But the road to better credit could be paved with incidental costs if you’re not careful. Listed below are tactics to watch out for, because they often turn expensive–check out our tips for avoiding these costs to boost your score without spending a dime. Story by Lindsay Konsko for USA Today.
Even Finance-Conscious Consumers Spend Swiftly After Payday
Americans step up their spending after payday-no surprise-but it’s not because the cash is burning holes in their pockets, a new study found. Researchers found that close to half of increased spending in the days after Americans receive pay or benefit checks comes from recurring payments such as rent or mortgage bills. In contrast, spending on fast-food or coffee treats increased only modestly in the few days after Americans are paid. The research helps explain a longstanding economic puzzle: Why do consumers with regular and predictable sources of income have so much volatility in their spending habits? Story by Eric Morath for The Wall Street Journal.
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 14.49 percent, slightly below last week’s average of 14.50 percent. Six months ago, the average was 14.47 percent. One year ago, the average was 14.34 percent.