LowCards.com Weekly Credit Card Update–May 10, 2019

LowCards.com Weekly Credit Card Update–May 10, 2019

May 10, 2019         Written By Bill Hardekopf

Sanders, Ocasio-Cortez Want to Cap Credit Card Interest Rates at 15%
Senator Bernie Sanders and Rep. Alexandria Ocasio-Cortez will introduce legislation on Thursday to cap credit card interest rates at 15 percent, a steep reduction from current levels. Sanders told The Washington Post in an interview that a decade after taxpayers bailed out big banks, the industry is taking advantage of the public by charging exorbitant rates. “Wall Street today makes tens of billions from people at outrageous interest rates,” he said. The proposal is sure to meet stiff resistance from the banking industry, which brought in $113 billion in interest and fees from credit cards last year, up 35 percent since 2012, according to S&P Global Market Intelligence. Story by Renae Merle for The Washington Post

Signup Bonuses are Eclipsing APR as Credit Cards’ Biggest Lure
Signup bonuses of at least $500 in cash or $1,200 in travel credit are considered the most attractive feature for a credit card, according to a CreditCards.com survey of millennials ages 23 to 38. This is a change compared to older generations who prefer debt relief, like 0% interest offers on balance transfers or new purchases. One theory that may explain the preference for travel signup bonuses is that 57% of millennials polled said they have flown or stayed in a hotel every year, compared to 48% of older generations. Another possibility: The rise of churning, when people constantly obtain credit cards, reap the signup bonus, and move on to the next one. Story by Ethan Wolff-Mann for Yahoo Finance

Citi Wants to Bring Credit Card Perks Like Miles to Bank Accounts
As the world’s biggest credit card issuer, Citigroup has enough plastic in American wallets to tile a path from its New York headquarters to the southern tip of Florida. Yet many of those 28 million clients park their savings elsewhere. Now, Citi is fighting back. After quiet experiments, the firm is expanding perks designed for credit cards to encourage sales of other banking products. In recent months, the company privately offered some cardholders 30,000 airline points to sign up for an online checking account. And this quarter, it plans to enhance its Thank You and Double Cash reward programs for select cardholders to encourage them to sign up for more products and services. Story by Jennifer Surane for Bloomberg

Credit Unions Gain Share of Credit Cards & Auto Loans
Credit unions built their portfolios of consumer loans more than twice as fast as other lenders in March as they increased their share of credit cards and auto loans. The Fed’s G-19 Consumer Credit Report released Tuesday showed credit unions held $61.5 billion in credit card debt on March 31, up 8.1% from a year earlier. Lenders of all types held $1 trillion in credit card debt, up 3.4% from a year earlier. Credit unions’ share was 6.1% in March, up from 5.9% a year earlier. Banks’ share was 89.8% in March, up from 88.3% a year earlier. Story by Jim DuPlessis for Credit Union Times

Mastercard CEO Says It’s Not the Company’s Place to Limit Gun Sales
Mastercard Inc. Chief Executive Officer Ajay Banga said it’s not his company’s place to put limits on firearm sales. In fact, it doesn’t even have the information it needs to stop such purchases. “I actually don’t know whether you’re buying a gun or a diaper in a store,” Banga said at an Economic Club of New York event on Tuesday, adding that Mastercard doesn’t receive information on individual items purchased at a retailer. It would be difficult for Mastercard “to turn off the acceptance of payments at a Walmart that sells bullets and diapers. I don’t know how to do it.” Story by Jennifer Surane for Bloomberg

Consumers More Satisfied with No Annual Fee Cards
More than half of consumers-66%-take into consideration whether a card has an annual fee when deciding to apply for that card, and 60% said having no annual fee is a major factor in their decision process, according to a new Discover survey. Among respondents who were currently considering switching credit cards, 54% said the reason was to avoid paying an annual fee-the No. 1 reason given. More than a third of respondents -37%-have already closed a credit card because it has an annual fee. Interestingly, about a third of respondents who chose a card with an annual fee began to regret it after the one-year mark of having the card. Story by Tamara E. Holmes for Value Penguin

Many Parents of College-Bound Kids Still Paying Off Own Student Loans
Student loans can be a financial burden that may cripple families for years to come. A recent study found that 44% of the families paying for their child’s college tuition were also still paying off their own student loans. Nearly one in three (32%) parents say they use a credit card more often because of their college-related payments. And 74% of the respondents say they have put off a major purchase, such as a car or vacation, to pay for education. Almost half of the parents surveyed (47%) said that college expenses will cause them retire later than expected. The average length of extended work was three to seven years. Story by John Oldshue for LowCards.com

Google to Allow Users to Pay for Android Apps Using Cash
Today, the Android platform sees more app downloads than iOS, but Apple’s App Store continually dominates in terms of revenue. Now, Google is aiming to narrow the revenue gap by introducing a new way for users in emerging markets to pay for apps: with cash. The company today announced it’s launching “pending transactions,” which offers users different ways to pay that don’t require a credit card or any other traditional form of online payment. Story by Sarah Perez for Tech Crunch

Cybersecurity Jobs Abound. No Experience Required.
As companies struggle to fill hundreds of thousands of open cybersecurity jobs around the U.S. they are casting a wider net to find and develop experts, pursuing workers without traditional four-year degrees or formal experience to help them protect computer networks and customer data. Facing a shortage of skilled workers to defend against digital attackers, employers like International Business Machines Corp. and Palo Alto Networks Inc. are pouring millions of dollars into new partnerships with universities and training programs. Story by Kelsey Gee for The Wall Street Journal

Banks Keeping Riskier Credit Card Loans With Losses Creeping Higher
More U.S. consumers are defaulting on their credit cards, but banks may be holding onto the riskiest loans instead of passing them off to investors. The credit card loans that banks bundle into bonds and sell to investors are outperforming the loans that lenders have held onto, Barclays analyst Alin Florea wrote in a report dated May 3. On average, losses on loans the biggest banks packaged into bonds known as asset-backed securities are 1 percentage point lower than lenders’ broader portfolios. Banks are writing off bad card loans on their books at the highest rate since 2012, and losses are outpacing those for auto and home loans. Story by Claire Boston for Bloomberg

InComm Integrates Prepaid Cards with Wearables
InComm Inc. an Atlanta-based payments firm, has integrated its MyVanilla prepaid Mastercard with Fitbit Pay and Garmin Pay mobile wallet apps, as well as the addition of near-field communication to the company’s retail network. Story in ATM Marketplace

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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.
View all posts by Bill Hardekopf
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