LowCards.com Weekly Credit Card Update–July 22, 2016
More Americans Are Paying Off Their Credit Cards Every Month
Americans have developed better credit card payment habits over the last few years, according to a new study from the FINRA Investor Education Foundation. In 2015, 52% of participants said they always pay their credit cards in full, compared to just 41% in 2009. In addition, only 47% said they carried a balance over from one month to the next versus 56% in 2009. With regards to fees, only 8% of those surveyed in 2015 said they were charged an over-the-limit fee for exceeding their lines of credit, compared to 15% in 2009. 14% said they were charged a late fee for not making a payment on time, while 26% said the same thing six years prior. This all indicates that Americans are getting better about making credit card payments on time and controlling their spending, which could bode well for the country’s economy. Story by Bill Hardekopf for LowCards.com.
Hackers Snatch Credit Card Data from CiCi’s Pizza Chain
Cici’s Pizza, a restaurant chain with 500 locations across the U.S., has been effected by a credit card breach, according to an announcement on its website. The breach has impacted more than 135 locations and first started in 2015. Security blogger Brian Krebs confirmed the hack with one of CiCi’s third-party point-of-sale providers, Datapoint POS. The company told Krebs that the cybercrooks used social engineering to install the malware on the POS systems. The hackers posed as technical support specialists from CiCi’s point-of-sale provider and had the employees install the malware. Once installed, the hackers remotely captured each credit card or debit card swiped at every infected terminal in real time, which allowed the criminals to collect credit card data as customers paid for their meals. The botnet snatched at least 1.2 million unique debit and credit card numbers, half of which where swiped from CiCi’s and the others were from establishments around the country ranging from a movie theater in Connecticut, a restaurant in Washington, D.C., and even the famous Lou Malnatis Pizza in Chicago. Story by Will Yakowicz for Inc.
Mastercard Buys Majority Stake in VocaLink for $920 Million
Mastercard agreed to buy a controlling stake in VocaLink, which handles most payroll and household bill processing in the U.K. Mastercard will pay $920 million for 92.4 percent of the U.K.-based payments-processing firm. VocaLink’s existing shareholders will retain 7.6 percent ownership and can receive as much as $220 million more if performance targets are met. VocaLink processes more than 90 percent of salaries and more than 70 percent of household bills in the U.K., according to the statement. The deal will give Mastercard, the second-largest U.S. payments network, more of a foothold in Britain as larger rival Visa pursues plans to boost its presence and improve its technology in the region. Story by Jennifer Surane for Bloomberg.
Wal-Mart Escalates Fight With Visa, Blocks Cards at Three Canadian Stores
Wal-Mart has taken the unusual step of making its shoppers feel the pain of a dispute with Visa. The retail behemoth stopped accepting Visa credit cards at three of its Canadian stores, marking a rare consumer-facing battle in an escalating war between the biggest global retailer and credit card companies, largely over the fees Wal-Mart pays them. Despite months of talks, Wal-Mart said it was unable to agree on terms with Visa. The retail chain argues that the fees it pays when shoppers use the cards are too high. U.S. stores, which account for 62% of Wal-Mart’s global sales, are unaffected by the Canada dispute and work under a different agreement. Story by Sarah Nassauer and Robin Sidel for The Wall Street Journal.
To Reach Digital-First Bankers, Capital One Will Open Two New Bank Cafes in Chicago
Capital One wanted to find a way to make a bank feel a little less like a…well..bank. So several years ago the financial institution began opening branded cafes that served coffee and pastries, offered free wifi and workspace, and had low-key financial resources, such as an ATM and on-site banker. Capital One opened one such cafe in Chicago. Now Capital One announced it will open two new Capital One cafes in Chicago. Based off the success of their previous locations in Chicago and around the country, Capital One says this allows the bank to integrate into the community, and offer financial resources to a digital-first generation not connected to a brick-and-mortar bank. Story by Karis Hustad for Chicago Inno.
Millennials Three Times More Likely to Use Mobile Banking
Millennials are actually three times more likely to bank using their mobile devices than Baby Boomers. They were also found to be 30 percent less likely to physically visit a bank. Whether it was through mobile or laptops, millennials were found to be more likely to utilize these digital devices, especially led by large financial decisions like buying a car or investing in their future. With such a large push towards digital banking. it’s vital that banks also follow through with these trends by investing in them. To capture and retain millennials’ business, banks and other financial-focused institutions should invest in strengthening their digital presence. Story by Cameron Glover for Tech Co.
AmEx Profit Rises on Gain Tied to Costco Portfolio Sale
American Express said its second-quarter profit rose 37% on a big gain tied to the sale of its Costco co-brand card portfolio, lower expenses and higher card-member spending. The company said that other parts of its quarterly results were also affected by the end of its 16-year exclusive relationship with Costco, which is now only accepting Visa-branded credit cards. Among other things, AmEx said spending on its Costco cards slowed significantly before the partnership ended June 19. AmEx’s revenue growth has fallen below its internal long-term targets in the past couple of years as the company faces intense competition from other card issuers and reductions in corporate travel budgets. Story by Josh Beckerman and Robin Sidel for Dow Jones Business News.
Bank of America Rejected You for a Credit Card? Here’s Maybe Why
While some of its competitors plunge deeper into subprime credit card lending, Bank of America says it’s not going there. The topic came up this week during the bank’s conference call with analysts to discuss its second-quarter profits, which fell about 18 percent from a year earlier. Bank of America’s chief financial officer, Paul Donofrio, pointed out that the bank’s executives have worked “extraordinarily hard to transform the company, its balance sheet, its ability to produce earnings.” At Bank of America, the focus is on lending to prime and super-prime consumers, he said. Bank of America’s stance comes after it has paid heavily for loans that soured in the financial crisis. It booked about $88 billion in credit card and other loan losses during the downturn, the bank has said. Some other big banks are going in the other direction. Last week, for example, JPMorgan Chase’s chief financial officer said the bank has “responsibly” expanded its issuance of cards to subprime borrowers over the past two to three years. Story by Deon Roberts for the Charlotte Observer.
These Cities’ Consumers are Worst at Managing Money
Making a lot of money doesn’t necessarily translate to having high credit scores. Just ask consumers in Baltimore and Washington, D.C. In those two cities, median household incomes rank high, but a new study finds average credit scores lag or consumers high balances on their credit cards. The Los Angeles area tops the list as its residents are ranked the best at managing money. In second place are consumers living in the Minneapolis-St.Paul area. The New York City-Newark-Jersey City area is third. Story by Athena Cao for USA Today.
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 14.66 percent, identical to last week. Six months ago, the average was 14.89 percent. One year ago, the average was 14.67 percent.