LowCards.com Weekly Credit Card Update–March 29, 2013
What You Need to Know About Credit Card Processing
Here is a series of posts about a search for an honest and affordable processor of credit card transactions. My own search began when I was tipped off that I was paying more than necessary for my transactions. I felt that my credit card processing–also known as merchant services–was costing me too much. That feeling was set off by a cold call last spring from a processor that was interested in seeing whether it could lower my transaction costs. That prompted me to do some research. Story by Paul Downs for The New York Times.
Internet Sales Tax Gaining Support in Senate
The Senate passed a nonbinding amendment which would allow states to collect sales tax from out-of-state online retailers. The National Retail Federation advocates the passage of such a bill, since their brick-and-mortar businesses lose so much volume each year to online retailers. The NRF estimates that states annually lose $24 billion in unreported online purchases. Story by Bill Hardekopf for LowCards.com.
American Express Adds Checks, FDIC Insurance to Bluebird Product
American Express is adding paper checks and deposit insurance to the Bluebird prepaid card it debuted last year with Wal-Mart Stores as it faces competition from other firms pitching alternatives to big-bank checking accounts. The lack of FDIC coverage prevented customers from having government payments like Social Security, military pay and tax refunds deposited directly to the accounts. Federal regulation requires that direct deposits of such payments be made into FDIC-insured accounts. Story by Andrew Johnson for the Wall Street Journal.
Consumer Bureaus Eases Limits on Credit Card Fees
The Consumer Financial Protection Bureau is scaling back rules on credit card fees in order to dodge a court battle with the financial industry. First Premier Bank sued the Fed and claimed the regulator acted outside of legal bounds when writing rules for credit card fees. Regulation Z in the Truth in Lending Act prohibits card issuers from charging fees that exceed 25 percent of a cardholder’s total credit limit. The CFPB wrote that the restrictions on fees would only apply to the first year of an account, but not when a new card is opened. Story by Megan Wilson for The Hill.
CFPB Expanding Its Complaint Database
The Consumer Finance Protection Bureau is increasing the number of complaints for its credit card database from about 19,000 to more than 90,000. They are adding data about mortgage complaints, complaints about bank accounts and services, private student loan complaints and complaints about other consumer loans (for example, if you got a loan to finance your daughter’s braces). Story by Scott Pluta for the CFPB.
Survey Shows Consumers Have Benefited from CARD Act
A survey by Consumer Action has found that while consumers still gripe about credit card companies, the number of complaints has fallen significantly since the implementation of the Credit Card Responsibility, Accountability and Disclosure Act. Since then, credit card complaints have plunged from 12 percent in 2009 to 4 percent in 2010. Respondents reported that credit card companies are treating them the same or better than before the law. Story by Roy Williams for LowCards.com.
Missouri Senate Panel Weighs Ban on Charging Extra to Use Credit Cards
Retailers would be barred from charging consumers an extra fee for paying with a credit card under a bill being considered by a Missouri Senate committee. Opponents say businesses need to charge extra because it’s expensive to allow credit cards as a form of payment. Story for the Associated Press.
LowCards.com Weekly Credit Card Rate Report
Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.29 percent, slightly below last week’s average of 14.30 percent. Six months ago, the average was 14.32 percent. One year ago, the average was 14.30 percent.