LowCards.com Weekly Credit Card Update–June 30, 2016
Latest Credit Card Innovation: Disposable Numbers
There’s one major topic driving the conversations in payments: fraud. More specifically, credit card fraud. And that’s why one company is after innovating the market by putting its own twist on how credit card numbers are thought of by making them disposable. This is part of the tech by a startup called Final, which this week started shipping its Visa-branded consumer credit card product with that feature. What’s more than just disposable credit card numbers is that those card numbers only apply to a single transaction and a single merchant. Story in PYMNTS.
Credit Card Companies Know How Little You Know
Credit-card companies need people to spend more than they can afford, but not so much that they default on their payments. So they could benefit from targeting individuals who are more likely to have cognitive failings. This is the dark side of behavioral finance. Some new research claims to find exactly such a result. The authors use data from a private company that tracks credit-card offers. They find that less educated consumers–who are likely to be less financially sophisticated–are more frequently given offers that include back-loaded costs. Those are plans that start with low rates, but increase later, with extra-high over-limit and late-payment fees. In other words, those are likely to be the borrowers who make bad financial decisions–racking up debt and eventually paying much more in interest. Meanwhile, more educated households tend not to be offered these plans. Story by Noah Smith for Bloomberg.
Americans Feel Financially Unprepared for Longer Lives
Americans are happier to be living longer than ever, but 70% feel financially unprepared to live to 100 or beyond. The Gift of Time, which surveyed 3,000 U.S. adults between the ages of 20 and 70, discovered that respondents knew a longer life would give them the opportunity to reach their dreams and feel more fulfilled. However, money fears and lack of planning are stopping many from taking risks and pursuing these goals. While Millennials and GenXers have the most time to follow their dreams, a great majority (79% of GenXers and 74% of Millennials) feel unprepared for a longer life. 57% of Baby Boomers also feel financially unprepared. When considering the future, 45% of the respondents said they felt “uncertain” about living a longer life, and more than half (51%) feared that not “having enough money to last my whole life” filled them with the most apprehension. Story by Bill Hardekopf for LowCards.com.
Visa Files Counterclaim to Wal-Mart in PIN Debit Card Lawsuit
Visa fired back at Wal-Mart in a legal dispute over letting customers authorize a debit card transaction with a signature, saying that the retailer secretly configured its payment terminals so only personal identification numbers, or PINs, could be used. Visa said it received complaints from customers who could no longer use their debit cards at Wal-Mart stores unless they had a PIN. Visa said the move by Wal-Mart, which took place earlier this year, violated the contract that the companies had negotiated in which Visa told the retailer that customers must be given the choice of using a signature. Story by Robin Sidel for The Wall Street Journal.
Barclaycard Turns 50: How Five Decades of Credit Cards Have Changed Money for Good
On June 29-50 years ago-Barclaycard launched the UK’s first credit card. The card-millions of which were sent out to Barclays customers’ homes-had no magnetic stripe or chip-and-pin. To complete a transaction, a merchant would use a counterfoil machine to imprint the card’s details on a paper slip. It wasn’t even the first card-Diners Club and American Express both introduced charge cards in the early 1960s – but it was not until Barclaycard that the early flickers of the cashless society were seen. Story by James Titcomb for The Telegraph.
Millions of Americans Prefer Their Credit Card Statements on Paper
When it comes to credit cards, many Americans are doggedly attached to their paper statements. A new survey found that 93 million credit card holders are still receiving their statements on paper instead of online, and 43 million of them actually prefer it that way. Nearly 50% of those who are receiving paper financial statements say they would be willing to pay to get those mailings if they had to. For those who are still receiving paper financial statements, 80% said they like having those pieces of paper for their records, while 74% like the tangible reminder that it’s time to make a payment. Story by Charisse Jones for USA Today.
Walmart Expands Mobile Wallet Service Walmart Pay to 15 More States in One Week
Attention, Walmart customers: You can now use Walmart Pay in a host of additional states. The retail giant announced the expansion of its mobile payments service to Michigan, Virginia, the Carolinas, Indiana, Iowa, Kentucky, Nebraska, North Dakota, South Dakota and Tennessee. Like other mobile payment services, Walmart Pay lets you use your smartphone to purchase goods on the fly. The service is accessible through Walmart’s mobile apps for iOS and Android. Story by Lance Whitney for CNet.
Wirecard Buys Citi Prepaid Card Services to Enter USA
German banking software company Wirecard AG has taken its first step to enter the North American market by agreeing to buy Citi Prepaid Card Services for undisclosed terms, the two companies said on Wednesday. Wirecard estimated that the acquired firm would add more than $20 million to its earnings before interest, tax, depreciation and amortization in the 2017 fiscal year. It will be taking on all the Citi unit’s 120 employees. The German company has been looking to expand into the U.S. market as part of a strategy to grow beyond Europe and become a global payments player. Wirecard, based near Munich, processes payments for 22,000 retailers and online merchants worldwide. It is the second largest payments processor in Europe behind WorldPay and has expanded through acquisitions in recent years into Southeast Asia, Middle East and Latin America. Story by Emma Thomasson and Eric Auchard for Reuters.
Lawmakers Want Answers On Walmart Prepaid Card Glitch That Left Thousands Without Funds
Senators Sherrod Brown and Bob Melendez sent a letter requesting information from Walmart, Green Dot, and MasterCard related to the system outage that prevented customers from withdrawing cash from ATMs, checking their account balances, or making purchases in mid-May. The lawmakers are seeking details on how the problem happened, how many customers were affected, what reimbursement the companies will offer to harmed consumers, and the steps the companies are taking to prevent a similar slowdown in the future. The Senators pressed the companies to provide a detailed timeline of the disruptions and to distinguish the circumstances of the glitch from the problems that RushCard experienced last year. Story by Ashlee Kieler for Consumerist.
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 14.68 percent, slightly lower than last week’s average of 14.70 percent. Six months ago, the average was 14.87 percent. One year ago, the average was 14.62 percent.