LowCards.com Weekly Credit Card Update–June 6, 2014
Debt Collectors Have Figured Out a Way to Seize Your Wages and Savings
People with overdue bills have long complained of harassment from debt collectors, from late-night phone calls to frightening in-person visits. Now it appears the industry has found far more troubling strategy: filing lawsuits against debtors–often, consumer advocates say, on the theory that they won’t ever show up to court to defend themselves. The consequences are dire when the debtors don’t appear in court. A judge can put a lien on someone’s home, garnish wages, even freeze bank accounts–all without a person ever getting a chance to fight their case. And at times, collectors file suit in error. Story by Hunter Stuart for the Huffington Post.
Sam’s Club to Offer Credit Card with Chip to Prevent Counterfeiters
Sam’s Club is rolling out a credit card with a microchip to prevent fraud, the first major retailer to switch to a more secure payment card after hackers made off with a trove of private customer data at Target last year. The warehouse retailer, which is owned by Wal-Mart Stores, said the MasterCard credit cards will be available this month. Each credit card has an embedded chip that makes the card more difficult to duplicate. Story by Shan Li for the Los Angeles Times.
Large Portion of Americans Are Clueless about Credit Scores
A recent survey shows that a large portion of Americans have very little idea how their credit scores are determined. 40% of those surveyed did not know credit card issuers use their credit scores to determine credit limits and pricing. 31% did not know that a cosigner’s credit score can decline with a late payment. 26% did not know that keeping credit card balances low could improve their credit scores. Story by Lynn Oldshue for LowCards.com.
Why American Express Wants to Kill Credit Cards
Leslie Berland has a curious job. She’s paid to think about all the ways to make her company’s flagship product obsolete. Berland leads digital partnerships and development at American Express, the company that pioneered the notion that a piece of colored plastic could not only buy stuff but raise your social status. In the future that Berland anticipates, a black card or a gold card won’t mean any more than a purple card, because you won’t have a card at all. Even American Express believes the plastic in our wallets eventually will go away. There are two things you always have with you: a credit card and a smartphone. The day is coming when we combine them. At a recent event on the future of retail, Berland pointed out that there are two things you always have with you: a credit card and a smartphone. The day is coming when we combine them. “What we are hyper-focused on is how do we merge those two things,” she says. “Especially as one day the physical card will disappear.” Story by Marcus Wohlsen for Wired.
Protecting Consumers Five Years After Credit Card Reform
In 2009, President Barack Obama signed into law the Credit Card Accountability, Responsibility, and Disclosure Act, or Credit CARD Act. This law ended credit card industry practices in which interest rates could change at any time and in which hidden provisions enabled companies to charge significant fees without justification. The act also limited credit card marketing directed at college students and added consistency to store gift cards to ensure predictable fees and expiration dates. These changes have created a clearer, fairer, and more competitive marketplace for consumers and have given them new tools to understand the terms of credit card offers and to pay off their debts responsibly. Yet while these laws were significant victories for consumers, some regulatory gaps remain. Story by Joe Valenti for Center of American Progress.
Cut Cost of Travel Abroad with Right Credit Card
Here’s a simple way to save some money every time you make a purchase on your trip. Make sure you have the right credit card in your wallet-one that does not charge a foreign transaction fee. Story by Herb Weisbaum for CNBC.
The Switch To Credit Cards With Embedded Computer Chips Has Serious Downsides For The US Payments Industry
Credit cards and debit cards with embedded microchips are coming to the U.S. They are known as “EMV cards,” and most merchants will accept them by year-end 2015. EMV cards are supposedly more secure and fraud-proof than magnetic stripe cards, which are still dominant in the U.S. market. But they aren’t a cure-all for fraud risks, and they pose other disadvantages too. Story by John Heggestuen for Business Insider.
Visa is Preparing a Standard for Prepaid Debit Cards
Prepaid debit cards are growing in popularity, but it’s often hard to know whether a card is a good deal or not before you buy one, because there’s no requirement that the cards disclose their fees and terms in a uniform way. To help clue in consumers, Visa said that it would soon flag prepaid cards that meet a set of consumer-friendly standards, like flat monthly fees. Before the end of the year, Visa plans to offer a special designation—it hasn’t decided yet what to call it–for its cards that meet the standards. The cards and their packaging will carry an emblem, in addition to the Visa logo, so consumers can quickly tell if the card meets the criteria. Story by Ann Carrns for The New York Times.
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 14.44 percent, slightly lower than last week’s 14.45 percent. Six months ago, the average was 14.42 percent. One year ago, the average was 14.27 percent.