LowCards.com Weekly Credit Card Update–July 3, 2014
Credit Card Lenders Pursue Riskier Borrowers
Lenders are courting risky credit card borrowers more aggressively than they have since the financial crisis in a bid to jolt revenue in a period of sluggish growth and tight regulation. Banks and other lenders issued 3.7 million credit cards to so-called subprime borrowers during the first quarter, a 39% jump from a year earlier and the most since 2008, according to data provided exclusively to The Wall Street Journal by credit bureau Equifax Inc. Story by AnnaMaria Andriotis and Robin Sidel for the Wall Street Journal.
Despite New Opt-In Rules, Overdraft Fees Still Baffle Consumers
It has been nearly four years since rules went into effect to help clarify when banks may charge you penalties if you overdraw your checking account using your debit card. But many people remain confused about so-called overdraft fees. The report from the Pew Charitable Trusts found that in 2013, 10 percent of adults with checking accounts paid at least one overdraft fee–that is, a fee for a short-term advance from their bank to cover a shortage in their checking account. Another 5 percent paid an overdraft transfer fee, charged for transferring funds from another account or a credit card. People who overdrew reported paying fees averaging $69. The typical overdraft fee was $35, but banks may add extra fees if the shortage isn’t covered quickly. Story by Ann Carrns for The New York Times.
Weighing the New Credit Card Come-Ons
Financial institutions have long besieged consumers with pitches for new credit cards, but if you feel like even more offers have been flying into your mailbox and email inbox recently, you probably are right. Some 992 million credit card offers were mailed in the first three months of the year, up 7% from 927 million in the year-earlier period, according to Mintel Group in Chicago. The good news for consumers with stellar financial track records is that credit is widely available. Lenders recently have resumed extending credit to riskier borrowers, but the terms of those offers still aren’t as attractive as those tailored to the creditworthy customer. Story by Robin Sidel for The Wall Street Journal.
Understanding Your Credit Card Number
Do you know what the numbers mean on the front of your credit card? Are they just a random accumulation of numbers? Or do they serve a specific purpose? Much like the VIN on your car, credit card numbers are set up to identify certain components of your account. The VIN tells you what manufacturer made your car and even what color it is. The credit card number tells what company issued your credit card but also a great deal about your account information. Story by Lynn Oldshue for LowCards.com.
5 Ways to Protect Yourself from Credit Card Fraud
In the last five years, 41% of Americans have faced credit, debit or prepaid card fraud, and about half of people who engage in “risky behavior”—like writing down a pin number or throwing away documents with banking information on them–end up being victims, a new study finds. Avoid these five behaviors to cut your fraud risk. Story by Priya Anand for MarketWatch.
The One Card You Need to Ease Pain at the Pump This Summer
If you’ll be spending part of this July 4th weekend in the car–whether that’s for a day trip to the beach or a 500-mile drive to visit the in-laws—be prepared to pay more at the pump this year than last. A gallon of regular gasoline sits at $3.70, according to the U.S. Energy Information Administration, or about 9% higher than in 2013. Those in the know, however, will be able to get a discount that mitigates the price escalation. How, you ask? With a cash back rewards card that gives them some extra juice at the gas station. Story by Taylor Tepper for Time.
Consumers May Have to Wait for More Secure Credit Cards
A report by a Boston-based consultancy, Aite Group, estimates 30 percent of credit cards and nearly 60 percent of debit cards will not have the new EMV technology by October 2015. After that date, the payment processors Visa and MasterCard have said, any card issuer or retailer that has not adopted the new technology will foot the bill for any fraudulent transaction that could have been prevented by EMV chips. Story by Jack Newsham for The Boston Globe.
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 14.52 percent, identical to last week. Six months ago, the average was 14.46 percent. One year ago, the average was 14.32 percent.