LowCards.com Weekly Credit Card Update–May 10, 2013
Credit Card Companies Battle in China
The Ms. Magic credit card from China Citic Bank is dotted with crystals and offers free beauty treatments and health insurance. Huaxia Bank’s Pretty Lady card entices women with triple points for cosmetic purchases and fitness club memberships. Delinquencies have tripled in the past five years and the cards aren’t profitable, but banks are offering perks as they battle for affluent consumers in the world’s fastest-growing market for plastic. Last year, 46 million credit cards were issued in China, and there were 331 million in circulation at the end of 2012. Story in Bloomberg Businessweek.
A Big Push for Mandatory Personal Finance Classes in Schools
Australia and the U.K. have voted to make financial education mandatory in their school systems, and the U.S. is moving aggressively to re-assert leadership on this important front in the global fight against financial illiteracy. Since U.S. schools are governed at the state level, it is unlikely we’ll ever have a federal mandate for K-12 financial education. Most states have agreed to a common core initiative that dictates certain educational standards across state lines and which will be in force next year but just four states currently require a stand-alone course in personal finance. Research shows that games and practical money choices are most effective with financial lessons. Parents are hands-down the most influential adults in any child’s life. Story by Dan Kadlec for Time.
Trying Out the New U.S.-Issued Chip Credit Cards
On a recent trip to France, I tried out the new “chip” credit card that Bank of America are issuing. The verdict? The Bank of America chip and pin card certainly was more useful than my traditional U.S. credit card, but it doesn’t work everywhere and travelers in Europe and beyond should still carry cash to use at highway toll machines. Hopefully U.S. banks will one day invest in the infrastructure for true chip-and-pin cards. It would cut down on fraud and make traveling abroad a lot easier. Story by Kristin Jackson for The Seattle Times.
Do 0% Credit Card Deals Really Mean Free Money?
Credit card experts say we’re seeing the best promotions for plastic since the Great Recession. The latest run of 0% offers–including 0% financing deals at stores and 0% introductory-rate major credit cards–is one more sign that the worst is over for the economy. More jobs mean more people can pay their credit card bills. Credit card issuers are able to offer 0% rates to a significant group of consumers now because the expectation is that interest rates will remain low and the unemployment rate won’t climb dramatically through the end of 2014. Story by Susan Tompor for USA Today.
A Credit Score That Ignores The Innocuous Mistake
Credit scores don’t differentiate between people whose credit suffered for an innocuous reason and people who overspend. However, at least one major credit score generator, VantageScore Solutions, has decided to ignore collection actions on credit reports–more than half of which are typically tied to medical debts–as long as the collections are paid. Proposed legislation that was reintroduced in Congress this year to require consumer reporting agencies to remove fully paid or settled medical debt information from consumers’ credit reports within 45 days of the debt’s resolution. That sort of fix could potentially help some of the estimated seven million people who reported that a billing error prompted a collection agency to contact them in 2012. Story by Tara Siegel Bernard for The New York Times.
Credit Card Debt Falls in March
Overall credit card debt fell for the first time this year during the month of March, according to data released yesterday by the Federal Reserve. Revolving credit, made up mostly of credit card debt, decreased in March at an annual rate of 2.4 percent. It now totals $846.2 billion, a decrease of $1.71 billion from February. The drop in credit card debt appeared to be the result of slower-than-anticipated consumer spending. Cardholders may be showing concerns about taking on more debt at a time when their payroll taxes are increasing. Story by Bill Hardekopf for LowCards.com.
7 “Smart” Credit Card Tips That Aren’t
Not all advice and wisdom for managing credit cards and other debts is created equal, and some tips intended to help your credit can actually have the opposite effect. Here are seven supposedly “smart” tips we’ve heard bandied about recently that generally ought to ignored. Story by Martha White for Time.
Visa Plants a Seed for Growth Abroad
Visa is betting on mobile payments in the tiny African country of Rwanda. Under the new mVisa mobile-payment system, cellphones will send, receive or save money without users visiting a bank or swiping a card. Mobile payments may seem like a low priority in a country where the average annual income is $750 and most of the 12 million citizens don’t have running water or electricity. But Visa is helping Rwanda upgrade its rudimentary financial infrastructure as part of the government’s goal to become the “Singapore of Africa.” The effort could introduce millions of people to formal banking for the first time. Story by Patrick McGroarty and Robin Sidel for the Wall Street Journal.
Regulators Scrutinize Auto Lenders Over Add-Ons
The Consumer Financial Protection Bureau has issued subpoenas to U.S. auto lenders over the sale of extended warranties and other financial products, according to people familiar with the investigation, expanding a civil probe that lenders say could slow the booming car-loan industry. Any new restrictions could affect millions of Americans who use loans to buy new and used vehicles each year. Though such products are legal, regulators are probing whether terms and prices of add-on products, such as extra insurance, are adequately disclosed. Story by Robin Sidel and Alan Zibel for the Wall Street Journal.
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 14.25 percent, slightly above last week’s average of 14.24 percent. Six months ago, the average was 14.26 percent. One year ago, the average was 14.26 percent.