LowCards.com Weekly Credit Card Update–March 11, 2016
Apple Pay’s Best Friend? Slow Chip-and-Dip EMV Cards
The US has long lagged behind other countries in its adoption of chip-enabled credit cards (also known as EMV cards). With a mere 37% of US businesses able to accept these EMV cards, regulators are getting ready to crack the whip on slow-moving retailers. Maybe they shouldn’t bother. After all, given how painfully slow EMV cards are proving to be, a growing number of consumers are opting to dump their cards altogether in favor of Apple Pay, Android Pay, and other smartphone-based payment systems. But Apple, more than any other company, benefits from the agonizingly slow chip-and-dip delays at the checkout counter. EMV cards are more secure and are meant to reduce fraud. Consumers should care, but ultimately convenience is what drives consumer decisions, and EMV cards are anything but. Story by Matt Asay for Tech Republic.
Capital One’s New Credit Tool is Free to All Consumers
Giving consumers their credit scores for free is a significant trend in the credit card industry. Capital One took this trend to a different level by giving all consumers, not just their cardholders, the opportunity to see their credit score for free. Capital One introduced CreditWise, a mobile app and online tool that enables consumers to see their credit score as well as their credit profile. The tool shows consumers what makes up their credit score and how they can improve it. It will show balances, total monthly payment amounts, total accounts opened and number of inquiries. CreditWise will also have a credit score simulator which shows consumers how their credit score can be affected by everyday financial decisions before they are made. CreditWise uses the VantageScore 3.0 from TransUnion, which is updated every week. It is available to everyone over 18 years old who has a valid social security number that can be matched to a TransUnion credit profile. Story by Bill Hardekopf for LowCards.com.
Suit Seeks to End Credit Card Holds at Pump
Two Tennessee residents are suing the nation’s largest diesel retailer over holds placed on their credit cards when they swiped at the pump, but an industry representative said the banks are really to blame. The lawsuits filed Thursday in Tennessee say Pilot regularly places $75 to $500 holds on customers’ credit cards without their knowledge. The holds can last hours or days. Jeff Lenard, with the National Association of Convenience Stores, did not address the specific allegations in the suit but said the policy of placing holds on pay-at-the-pump fuel purchases is an industry standard. It is driven by the banks, which require the holds to make sure purchases get paid for, he said. Many people assume that when they swipe their cards at the pump, they are paying the exact amount due. But that is not the case. Story by Travis Loller for the Associated Press.
Prepaid Card Users, Under Scrutiny, Find Tax Refunds Frozen
Thousands of people have had their prepaid debit cards frozen when they try to direct their tax refund to their accounts, a result of financial industry efforts to combat an escalation in tax fraud. It’s keeping people from their money, and delaying access to much-anticipated tax refunds. People who rely on prepaid debit card accounts are often poorer Americans who don’t have traditional bank accounts. Story by Ken Sweet and Sarah Skidmore Sell for the Associated Press.
FTC To Study Credit Card Industry Data Security Auditing
The Federal Trade Commission has issued orders to nine companies requiring them to provide the agency with information on how they conduct assessments of companies to measure their compliance with the Payment Card Industry Data Security Standards. PCI DSS audits are required by the major payment card issuing companies of retailers and other businesses that process more than 1 million card transactions in a given year, and are intended to ensure that companies are providing adequate protection to consumers’ sensitive personal information. Story by Jay Mayfield for the Imperial Valley News.
Home Depot Offers $19 Million to Settle Customers’ Hacking Lawsuit
Home Depot says it’s willing to pay as much as $19.5 million to settle a class-action lawsuit brought by shoppers affected by a massive security breach that exposed credit card information belonging to 56 million customers. The home-improvement retailer’s offer includes the creation of a $13 million fund that would compensate customers for out-of-pocket expenses such as reasonably traceable fraud. The remaining money would go toward legal fees and associated expenses. Home Depot also promised to adopt new data security measures to protect its customers’ personal and financial information. Story by Steven Musil for CNet.
Big U.S. Banks to Take On Tech Rivals with Instant Payments
Depositors at some of the largest U.S. banks are finally going to get the chance to do something quick and simple: send money to another person’s account instantaneously by mobile phone. The idea has been in the works for at least five years, and in the meantime, Silicon Valley has made incursions into the industry’s role as a payment intermediary. But now, big banks including JPMorgan Chase, Bank of America, Wells Fargo and U.S. Bancorp are starting to plug into a system they jointly own, called clearXchange, that will allow each others’ customers to transfer money in a flash when they split a dinner check, rent payment or vacation bill. Story by David Henry for Reuters.
American Express’ Digital Wallet Patent Promises to Innovate Loyalty Rewards
American Express may be looking to leverage its position as both payment network and issuer to make loyalty reward points more akin to real money, according to patent documents recently published by the US Patent & Trademark Office. The patent application describes a new system in which individuals with credit card reward points could use them at checkout on e-commerce sites. Reward points would be listed as a payment option alongside the traditional methods we’re used to seeing, such as credit and debit. In the current rewards ecosystem, most points are brand-restricted. If an individual has 50,000 American Airlines miles, those miles are primarily good for travel with AA and any other airline the company entered into a codeshare agreement with. However, if that customer was to suddenly decide to never fly again, the points become worthless. American Express’ idea is to allow consumers to use reward points when purchasing goods, regardless of whether the company and merchant have a previously established partnership. Story by Robert Harrow for Venture Beat.
More than 100 Million People Will Make an NFC Mobile Payment in 2016
More than 100 million people around the world will use an NFC handset to make a purchase this year, according to a new report from Strategy Analytics, and the value of transactions conducted via NFC handsets will grow from $30 billion in 2016 to $240 billion in 2021. “Increasing competition between mobile wallets from device vendors Apple and Samsung, payment card issuers, and mobile operators, combined with a maturing contactless payment infrastructure across most regions, will finally catalyze in-store handset-based NFC purchases,” the analysts say. “Rising overall adoption of contactless payments will boost handset-based contactless payments, but underlines a strong need for mobile wallets to differentiate from cards.” Story by Rian Boden for NFC World.
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 14.80 percent, a slight decrease from last week’s average of 14.81 percent. Six months ago, the average was 14.59 percent. One year ago, the average was 14.46 percent.