LowCards.com Weekly Credit Card Update–July 27, 2018

LowCards.com Weekly Credit Card Update–July 27, 2018

July 27, 2018         Written By Bill Hardekopf

JPMorgan Chase and Bank of America Figures Hint at Consumer Credit Card Debt Problems
Credit card charge-offs have been increasing. Bank of America’s net credit card charge-offs increased to $739 million, up from $640 million this time last year. Comparing credit card charge-off figures from this year’s second quarter to last year’s reveals a 10% increase in credit card charge-offs for Bank of America and a similarly alarming 9% increase for JPMorgan Chase. A credit card charge-off is an indication by a creditor that it believes a debt is likely unrecoverable. So, JPMorgan Chase and Bank of America’s quarter two results hint that more and more Americans are struggling to repay their credit card debt. Story by Joe Resendiz for Value Penguin

Visa Says America’s Love for Credit Card Debt Buoyed Profit
Visa has found the upside in America’s addiction to credit card debt. Spending on the firm’s U.S. credit card products climbed 11 percent to $493 billion during the fiscal third quarter, when outstanding card debt reached a record in the country. Visa, the world’s largest payments network, has benefited from an increase in consumer spending. Visa and rival Mastercard continue to benefit from a shift to electronic payments and improved consumer confidence in the U.S., which remains near an all-time high. During the 12-month period through June, prices on consumer goods in the U.S. rose at their fastest rate in six years, boosting Visa’s results. Story by Jennifer Surane for Bloomberg

Consumers Still Wary about Security with Mobile Banking, Payments
Nearly 6 in 10 consumers pay bills on line, but half of this group have concerns about the security of doing so, according to a new consumer survey. Further, consumers are interested in new features and functionalities offered by payment services, but nearly half (46 percent) are confused by the array of financial products and services available. Of those who have not used mobile banking in the past 30 days, 57 percent cited security as the main reason. Consumers are most likely to use online bill pay (59 percent) and electronic bills (53 percent), followed by newer services such as mobile bill pay (27 percent), P2P through a bank (17 percent) and digital wallets (15 percent). Story in Retail Customer Experience

Consumers Paying $104 Billion in Credit Card Interest and Fees
The amount of money that U.S. consumers shell out yearly in credit cards fees and interest has passed the $100 billion mark, new research shows. With credit card debt at more than $1 trillion and interest rates ticking upward, consumers paid nearly $104 billion in those charges during the 12 months that ended March 31. That figure is 11 percent more than the $93.7 billion tallied a year earlier and 39 percent more than the $74.6 recorded in 2013. Story by Sarah O’Brien for CNBC

YouTube Tutorials Show People How to Exploit Stolen Credit Card Details
An underground fraud network is scamming credit card owners, and showing the masses how to do it, too, via YouTube tutorials. Referred to as “carding,” there are Facebook groups offering tutorials and mobile apps for enabling the habit. One called KiCarding Premium was recently removed from the Google Play Store, but others that are more discreet about their purpose. BIN – Credit Card Checker, an app for checking if a credit card number is legitimate, still exists in mobile app stores, for example. Story by Christina Bonnington for The Daily Dot

Credit Card Super-Users Take a $330 Million Bite Out of JP Morgan’s Revenue
Savvy credit card users have forced J.P. Morgan Chase to pony up more in rewards payments than the bank originally projected. Buried in an otherwise positive second-quarter earnings report, in which the bank announced a record $8.32 billion profit, was the admission that credit card customers were redeeming points faster than anticipated, resulting in a $330 million charge. The bank’s recent charge may indicate that consumers are simply getting smarter with rewards  programs. Story by Hugh Son for CNBC

Equifax’s Security Overhaul, A Year After Its Epic Breach
A year ago this week, the credit bureau Equifax saw signs of a problem on its network. A really big problem. Hackers had entered the company’s systems, stealing the personal and financial data of more than 147 million people in the United States, including Social Security numbers, dates of birth, home addresses, and some driver’s license numbers and credit card numbers. Though other breaches have exposed more total records, the Equifax debacle is generally considered the worst corporate data breach ever in the US, because of both the scale and the nature of the information it exposed. Story by Lily Hay Newman for Wired

The Card Rewards Strategies Issuers Can Use to Win Top-of-Wallet Status While Maximizing Returns
The average US consumer holds about three nonretail credit cards. To make credit cards as valuable as they could be, and to bring returns back up, issuers need to direct their efforts not just toward becoming one of consumers’ three cards, but also toward becoming their favorite card. Rewards are more important than ever—three of the top four primary card determinants cited by respondents to a Business Insider Intelligence survey were rewards-related—so abandoning them isn’t effective. Instead, issuers need to be more resourceful with their rewards offerings, focusing on areas that encourage habit formation, promote high-volume spending, and help to offset some of the rewards costs while building engagement and loyalty. Story by Jaime Toplin for Business Insider

How Small Businesses Can Avoid the Major Risks Involved with Credit Card Transactions
Americans love plastic, especially when it comes to shopping. 78% of consumers say that they would rather buy with a card than cash, and doing so typically leads to a larger purchase. Accepting credit card payments is basically a requirement for all businesses these days. Yet, many business owners are wary of risks associated with credit card processing. An accidental security breach involving customer payment information could be absolutely devastating for a small business. Beyond security, there are several other risks that come along with processing credit cards. These include hidden fees, lengthy processing times that cut into cash flow, and a number of other limitations and complications. So, what should small businesses do? Clearly, omitting credit card payment options is not really feasible in today’s market. Therefore, the best strategy for SMBs is to protect themselves against the most common risks associated with credit card transactions. Story by Avinash Nair for Business 2 Community

Business Email Scams Spin Even Wider Webs
If the Business Email Compromise (BEC) scam isn’t on the radar of every corporate finance executive, it certainly should be. The Federal Bureau of Investigation (FBI) recently issued a public service announcement warning that the BEC scam has now redirected $12 billion worldwide, much of that now having to be written off as a loss for corporates unable to recover the funds. More than three quarters of companies became targets of payments fraud last year, yet another all-time high. Of the businesses that have been hit by a scam, 77 percent were the target of a BEC scam, the report said. While 54 percent of those scams involved wire transfers, more than a third targeted check payments. Story in PYMNTS

Credit Card Asset-Backed Securities: Off to a Slow Start in 2018 after Rebounding
Asset-backed Securities, a behind-the-scenes function of bank cards, plays an essential role in credit cards because it frees up funds for future lending. Credit card issuers, primarily the top tier who can create pools valued in hundreds of million or billion dollar tranches, participate in this funding strategy. Issuer benefits include the isolation of credit risk, the ability to fund credit card usage at lower rates, and the creation of a perpetual stream that can provide a funding edge. After accounts book and balances build, card issuers can pool the debt into groups that can be sold to special purpose investment entities. In doing so, the issuer actually removes the debt from their balance sheet, and creates a vehicle available to sophisticated investors and in some cases, the general market. Story by Brian Riley for Payments Journal


About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
View all posts by Bill Hardekopf
Featured Low Interest Card
Top Features : 1.25X miles on every purchase; no annual fee; bonus of 20,000 miles once $1,000 is spent in first 3 months
Featured No Annual Fee Card
Top Features : Earn cash back twice. 1% when you buy plus 1% as you pay; 0% APR for 18 months on balance transfers
Featured Bad Credit Card
Top Features : No Annual Fee; Cash Back match at the end of your first year; Social Security Alerts
Featured Fair Credit Card
Top Features : No annual fee; access to higher credit line after making first 5 monthly payments on time
Featured Limited/No Credit
Top Features : No annual fee; reports to major credit bureaus; access to higher credit line after making first 5 monthly payments on time
Featured Cash Back Card
Top Features : No Annual Fee, Bonus Offer, Cash Back