LowCards.com Weekly Credit Card Update–June 5, 2020

LowCards.com Weekly Credit Card Update–June 5, 2020

June 5, 2020         Written By Bill Hardekopf

Visa Says Covid-19 Crisis Could Help Drive $100 Billion Annual Shift to Debit Cards Over Time
The Covid-19 crisis is pushing more purchasing over to debit cards in what could drive a $100 billion annual shift away from credit cards over time, according to Visa. While U.S. credit card volume on Visa cards remained down from a year earlier in May, debit card volumes were up 12% last month. “There’s a consumer psyche of sort of not spending someone else’s money but spending my own money,” said a Visa executive. Visa estimates, based on past behaviors, that there could be a $100 billion annual shift to debit card spending from credit card spending over time. Story by Emily Bary for MarketWatch

U.S. Credit Card Debt Down to $769 Billion
For the week ended May 20, the credit card debt U.S. banks held on their balance sheets was down from $860 at the beginning of March. The last time Americans owed that little credit card debt was at the beginning of 2018. The reason credit card debt has shrunk so rapidly is that Americans have cut their spending even faster than they have lost their jobs. The 10.5% drop in the space of 11 weeks is the steepest decline in American credit card balances on record. Credit card debt fell by 22% during the Great Recession, but it took more than a year. Story in Barron’s

Green Dot to Launch Mobile Banking for US Immigrants
Welcome Technologies, which works to aid immigrants as they integrate into life in a new country, is partnering with Green Dot for the PODERCard, which will help U.S. Hispanic immigrants access digital banking services. Less than half of U.S. Hispanic immigrants have access to actual banking services, citing an FDIC Survey. With the PODERCard, users will have access to a number of features, including a bilingual interface that can use both Spanish and English; a transparent enrollment process; a free Visa card that will allow access to over 19,000 ATM locations and no monthly fees. Story in PYMNTS

Stimulus Prepaid Debit Card is Causing a Lot of Confusion
The good news is that many people have the right amount of skepticism about receiving unsolicited mail. The bad news is that some folks may have trashed a mailing that contained their stimulus payment thinking it was just a scam or junk mail. But what they received was a prepaid debit card loaded with the economic impact payments to individuals made available under the $2 trillion Coronavirus Aid, Relief and Economic Security (Cares) Act. Adding to the confusion, some couples say their cards came with their names mixed up. Story by Michelle Singletary for The Washington Post

Stimulus Proposal: $10,000 in Credit Card Interest Relief During Coronavirus Pandemic
The brainchild of Norman Silber, a senior research scholar at Yale Law School and professor at Hofstra University’s Maurice A. Deane School of Law, and Jeff Sovern, professor at St. John’s University School of Law, the proposal would have the federal government subsidize interest payments on consumer credit card charges while also capping interest rates and allowing consumers to fully defer minimum payments. These steps would help stem the impending credit crunch that has already started to hit many Americans and maintain an accessible lending mechanism readily available to 75 percent of Americans. Story by Shahar Ziv for Forbes

Mastercard Provides Economic Performance Data to Aid City Recovery
Mastercard has launched Recovery Insights, a set of data-driven tools to help cities make decisions on budgets, aid disbursement and investment as they plan their next steps in the Covid-19 response. As part of the initiative, Mastercard is making some tools free to governments and select small businesses to provide ongoing snapshots of economic health. Mastercard Geographic Insights, which provides information on spending pattern changes in specific neighborhoods, and Business Locator, which identifies which merchants remain open for business, will be free to city, state and national governments for three months. Story by Sarah Wray for Cities Today

Will Covid-19 Finally Usher in the Age of the Cryptocurrency?
Consumers will always demand reasonable levels of privacy – something that has not always been granted to their finances. As the world attempts to rebuild economically after the Covid-19 pandemic, cryptocurrencies may offer a solution. Cryptocurrencies hold the promise of creating a more open financial system with worldwide access, instantaneous fund transfers, lower costs and vastly improved consumer privacy protections. When bitcoin first gained popularity, many people incorrectly assumed that it was anonymous money. In fact, as a blockchain technology, it uses a public ledger that records a digital trail of every transaction. Story by Brian Armstrong for The New Economy

Is the Coronavirus Destroying Americans’ Finances?
Americans living paycheck to paycheck is not new, but the pandemic has exacerbated the problem — 31% of homeowners and a whopping 49% of renters surveyed said they were living paycheck to paycheck prior to the start of the pandemic and are continuing to do so. You can see the impact of job losses, furloughs, and decreased hours in those who are only recently living paycheck to paycheck. With nearly half of renters and 18% of homeowners having less than $500 in emergency savings, it won’t take long for those accounts to be emptied. Story by Thomas O’ Shaughnessy for CPA Practice Advisor

Citi Premier & Prestige Get New Bonus Categories
Given how much consumer behavior has changed in the past several weeks, many of the credit card benefits that members used to appreciate aren’t as valuable anymore. Therefore, we’re seeing card issuers get creative with perks, so that members have an incentive to keep their cards. Through August 31, 2020, the Citi Prestige card will be offering 5x ThankYou points per dollar spent on select online purchases, up to 7,500 points. As of June 2, 2020, the Citi Premier Card is offering 3x ThankYou points per dollar spent at supermarkets and restaurant purchases, including takeout and curbside pickup. These benefits initially only apply to cards already open as of May 22, 2020. Story by Ben at One Mile at a Time

What Does PayPal Do to Make it So Secure?
PayPal’s entire brand is based on security. They emerged when the internet was a wild-west, to allow online citizens to make payments to vendors in good faith that they will not suffer negative consequences like scamming. As such, they have carried a reputation of security excellence into the much more regulated online landscape. They are a great case study of a company that has evolved its offering throughout the digital age while keeping its brand consistent. So, what features do they offer that give their users such trust? Story in AZ Big Media

Varo Money Raises $241 Million in Funding Round
Varo Money Inc. has raised $241 million in Series D funding co-led by Gallatin Point Capital and The Rise Fund, an existing investor that was co-founded by TPG, U2 frontman Bono and investor Jeff Skoll. The funding will be used to grow the mobile banking fintech, which is the first all-digital bank in the U.S. to become a fully chartered national bank. The service will also help the company innovate across a range of products. Story in Mobile Payments Today

The information contained within this article was accurate as of June 5, 2020. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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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.