LowCards.com Weekly Credit Card Update–June 21, 2013
Young Americans Are Ditching Credit Cards
The number of young Americans who are living without credit cards has doubled since the recession. About 16% of consumers ages 18 to 29 didn’t have a single credit card by the end of 2012–up from 8% in 2007, according to data that credit score provider FICO. As a result, credit card debt has declined by about a third among this age group–from an average $3,073 to $2,087 per person. Story by Blake Ellis by CNN Money.
Can a Bad Credit Report Hurt Your Job Search?
Regulators are cracking down on some methods companies are using to screen job candidates, but employers’ use of credit checks during the hiring process is legal and fairly common. Some 47% of employers conduct credit checks on job candidates, according to a 2012 survey by the Society for Human Resource management. And one in seven job seekers has been denied work as a result of a credit check. Red flags include missed payments, delinquencies, foreclosures and liens. Story by Jonnelle Marte for the Wall Street Journal.
Banks Turn to Fees to Make Mobile Pay
Some in the banking industry feel it’s risky to charge fees for mobile banking services. Yet evidence is starting to mount that retail banking fees, so unpopular in areas like checking accounts, may be palatable for mobile banking services. U.S. Bank has been charging 50 cents per mobile check deposit since 2010 and the bank has said its adoption numbers are strong. Story by Penny Crosman for the American Banker.
Credit Card Delinquencies and Charge-Offs Continue to Fall
Consumers continue to pay their credit card bills on time, and issuers are having to write off fewer accounts. Both delinquencies and charge-off rates declined from April to May for five of the six top credit card issuers. Story by Bill Hardekopf for LowCards.com.
Why More Banks are Reinvesting in Credit Cards
Since 2011, five out of 42 domestic midsize banks with between $10 billion and $25 billion in total assets have entered back into the consumer credit card issuing business. Three major trends are driving banks to consider increasing investment in credit card programs. First, consolidation of credit card businesses along with numerous bank combinations have fundamentally changed the competitive landscape. Second, credit card profit margins have improved since the Great Recession ended. Lastly, legislation has leveled the playing field. Story by Frank B. Martien for the American Banker.
Canada Consumers and Merchants Await Credit Card Fee Ruling
The Competition Bureau, Canada’s anti-trust watchdog, asked the tribunal 30 months ago to strike down “restrictive and anti-competitive rules” that the Canadian subsidiaries of Visa and MasterCard impose on merchants–rules that the bureau said result in higher costs for businesses and higher prices for consumers. The bureau wants merchants to be able to charge fees directly to consumers who use credit cards for purchases so merchant fees can’t be passed on to cash-paying customers. Story by Caroline Van Hasselt for The Wall Street Journal.
Financial Tips for Recent Graduates
Almost two million people recently graduated college and the fortunate ones are now entering a new chapter of life called the working world. For the class of 2013, the average graduate is already weighed down with $32,500 in debt when they leave college. The percentage of younger households with debt of any kind dropped to 78%, the lowest level since the government began collecting this data thirty years ago. The share of young adults with debt on their credit card declined to 39% in 2010 from 48% in 2007. This reluctance to add debt is a good start. Here are some additional financial tips for new graduates. Story by Bill Hardekopf for LowCards.com.
Federally Subsidized Student Loan Rates Set to Double
In July, federally subsidized student loan rates could double if Congress and the White House cannot agree on how to set the cost for student borrowers. Rates for subsidized Stafford Loans, for which the government pays the interest while and immediately after a student is in college, are set to double from 3.4 percent to 6.8 percent if Congress does nothing between now and the end of the month. Story by Andrew Edwards and Josh Dulaney for the Daily News.
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 14.30 percent, identical to last week. Six months ago, the average was 14.32 percent. One year ago, the average was 14.30 percent.