LowCards.com Weekly Credit Card Update–July 6, 2018

LowCards.com Weekly Credit Card Update–July 6, 2018

July 6, 2018         Written By Bill Hardekopf

More Americans are Giving Up on Debit Cards
Debit card use is declining in the U.S., according to new report. Since 2013, the percentage of households that use debit cards has dropped from 74 percent to 58 percent, in favor of alternative payment methods, such as credit cards and online/mobile banking. Almost a third more households pay with credit now compared to five years ago. Many consumers prefer credit cards because they provide benefits that debit cards do not, namely cash rewards and enticing perks. Story by Yoni Blumberg for CNBC

Are Your Credit Card Perks Shrinking?
Your credit card perks are designed to feel like a gift that keeps on giving. But they are not guaranteed to last. Buried deep in any credit card agreement is something that reads like this: your card issuer has the right to change the benefits and features of these programs at any time with notice. And some banks have already rolled back popular perks, leaving cardholders wondering whether the benefits they signed up for will last. Story by Anna Bahney for CNN

Have a Citi Credit Card? You May be Getting Some Money Back
Some Citi cardholders are about to have a payday. The Bureau of Consumer Financial Protection announced a settlement Friday with Citibank, after it found Citi violated the Truth in Lending Act. The cardholders of some 1.75 million Citi accounts will receive an average refund of $190 each under the terms of the agreement. Citi will have to hand over a total of $335 million to customers. Citi violated the Truth in Lending Act by failing to reevaluate and reduce the annual percentage rates (APRs) on about 1.75 million credit card accounts. The Act requires credit card issuers to review and reevaluate APRs at least once every six months and reduce them accordingly if the consumer has changed in certain ways, such as if their credit score has improved. The issuer must reduce the rate within 45 days of completing that evaluation. Because Citi did not do that, some cardholders paid more in interest than they should have. Story by Maria LaMagna for MarketWatch

Why Americans are Warming to Mobile Payments
Companies in four sectors have started ramping up efforts to make mobile payments easier and more accessible. In December Apple unveiled Apple Pay Cash, which lets iPhone holders reimburse each other. Samsung and Google offer similar services. JPMorgan and Bank of America are part of a group of firms behind Zelle, which allows account holders at participating banks to pay each other instantly. In the last 12 months Zelle shifted more than $75 billion between bank accounts, nearly 40% more than in 2016. Platforms like Paypal-owned Venmo are making efforts to lure younger customers. Under its default setting, all transactions are posted on a landing page, so that the platform’s curious users can scroll through them to see who has shared which dinner bill. In the first quarter of 2018, Venmo sent 80% more payments than in the same quarter of 2017. The number of retailers and restaurants accepting mobile money is also picking up as they focus on the most popular payment systems. Half of all American stores (about 5 million locations) take Apple Pay, a 50% increase on last year. Google Pay is accepted in 4 million shops and Venmo users can pay 2 million merchants in Paypal’s network. Story in The Economist

Paypal Hands Control of Receivables Business to Synchrony
PayPal has handed over its consumer credit receivables to Synchrony, with the latter gaining to a portfolio worth up to $7.6 billion. Since 2004, PayPal and Synchrony Bank have partnered to offer PayPal-branded consumer credit cards to consumers. The two firms have extended their existing co-brand consumer credit card program agreement. Synchrony is now the exclusive issuer of the PayPal Credit online consumer financing program in the US until 2028. Story by Alex Hamilton for IBS Intelligence

This Common Credit Card Myth is Costing Millions of Americans
If you’ve ever carried a balance on a credit card thinking it would help your credit score, you’re not alone. About 43 million Americans, which is 22 percent of credit card users, have carried a balance to improve their credit score, according to a new report. Unfortunately, carrying a balance is not one of the five main criteria that makes up a credit score, though how close you come to your spending limit is. Story by Carmen Reinicke for CNBC

How to Get a Credit Card When You’ve Never Had One
The Uber Visa, launched last fall, may target on-the-go millennials with amazing rewards, such as 4 percent for eating out and 3 percent on airfare. But the odd thing, as with many high-reward credit cards, is that getting approved for one of these Barclays Uber cards isn’t a slam dunk for some Generation Y consumers. Many millennials might have the college degree and the new job, but they’re held back from some of the more lucrative rewards cards in some cases because they were too cautious about handling credit in college. Yes, really. Story by Susan Tompor for the Detroit Free Press

MasterCard, Visa Lose UK Appeal In Swipe Fee Antitrust Suits
Credit card companies Visa and MasterCard set fees at an unlawful level that restricted competition, a London appellate court ruled Wednesday, in a landmark judgment in favor of a group of British retailers that could revive lawsuits potentially worth billions of dollars against the card firms. Supermarkets had argued that swipe fees imposed by Visa and MasterCard infringed European Union antitrust rules. The cases will now go back to a specialist competition tribunal which will review the size of potential damages. Story by Richard Crump for Law 360

Mastercard: Biometric Payments to Take Centre Stage Under PSD2
Mastercard is forecasting a bright future for biometric technology, as new rules on strong customer authentication under PSD2 come into force across Europe. The European rules aim to tackle online fraud, by increasing the number of transactions subject to two factors of authentication by the payer. While in-store transactions using Chip and PIN technology already comply, the biggest impact will be felt in online shopping, where consumers are already overwhelmed by password fatigue. With regards to card payments, currently just one-to-two per cent of online transactions require cardholder authentication to complete a transaction, but this is set to rise to up to 25% from next autumn. Story in Finextra

Detroit Rapper Accused of Funding Up-and-Coming Career with 3,000 Stolen Credit Cards
A Detroit rapper’s career is now on hold after he used thousands of stolen credit cards to pay for a tour and recording equipment, federal agents said. According to federal documents, ShredGang Boogz, whose birth name is Albert Hill, used the stolen cards to pursue his career and wire money to himself as part of the BandGang Crew. Instead of dealing drugs, the gang steals credit cards to make millions and brag about its cash on social media. Story by Kevin Dietz for Click On Detroit

Bank Of America Brings Biometrics To Enterprise Mobile Banking
Bank of America brought both biometrics and embedded token technology-two powerful security system tools-to the CashPro Mobile platform. This would give corporate users access to the same level of security that normal consumers enjoyed, and on the same level of ease. Corporate banking security, reports noted, is often “cumbersome”. Though it would likely take some time for the new measures to catch on-agility is not a high point of enterprise-level businesses-once they did, they would likely stay in place. Story by Steven Anderson for Payment Week


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
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