LowCards.com Weekly Credit Card Update–May 17, 2019

LowCards.com Weekly Credit Card Update–May 17, 2019

May 17, 2019         Written By Bill Hardekopf

Credit Card Rates Are Now at Their Highest Level in History and May Weigh on the Economy
Americans now pay their banks an average 17% interest on credit cards, the highest level recorded by the Fed. The rising monthly cost for U.S. consumers may be one reason they’re spending less, as April’s weak retail sales laid out. The combination doesn’t bode well for GDP growth. The Fed’s short-term lending rate is now targeted between 2.25% and 2.5%. However, it has gone up nine times since December 2015 and has triggered increases across the board in consumer debt instruments, due in part because it costs banks more to borrow. Story by Kate Rooney for CNBC

What 98% Of Consumers Miss About Protecting Their Cards From Fraud
From finding a nearby restaurant to finding a date, smartphone location controls are used by consumers for many cases. These mobile controls, however, also offer consumers a powerful tool for dealing with arguably higher stakes: the risk of credit card fraud. Location controls can be used to prevent merchants from charging consumers’ credit cards if their smartphones aren’t close by, and restrict purchases to a particular geographic area or country. Location controls, however, can reflect account holders’ personal travel and spending habits, providing more sophisticated safeguards than anti-fraud algorithms alone. Despite this potential for improved mobile security, location-based services are scarcely used by consumers to protect their accounts. Story in PYMNTS

Warning: Signs of Credit Crisis Grow
A recent survey of bank officers shows U.S. institutions are tightening their lending standards and raising rates on commercial loans and credit cards. Bankers say they have increasing concern about future economic growth, despite continued U.S. labor market strength and solid economic fundamentals. The data banks are seeing runs contrary to the overall narrative of a strong U.S. economy. Credit card delinquency rates in Q1 hit the highest level since 2012, driven in part by a spike in overdue payments by people ages 18-29, according to a report out this week from the New York Federal Reserve. Story by Dion Rabouin and Courtenay Brown for Axios

Petal Introduces New Cash Back Rewards for On-Time Bill Payments
Petal unveiled a new rewards program for its no-fee credit card. Starting this month, cardholders will be able to earn 1% cash back for all purchases. The Petal Card was designed to help people with limited or no credit history. The approval process is based on a person’s bank accounts and bill payments, not credit scores. To further this credit-building goal, Petal is now rewarding cardholders for making on-time payments. After six months of on-time payments, the cash back amount on the card increases from 1% to 1.25%. After another six months, it jumps to 1.5%. The cash back is automatically activated; no opt-in is required. Another change is the addition of spending limit settings. Petal now allows customers set a spending limit that is below their credit limit to help cardholders better control their budgets. Story by Bill Hardekopf for LowCards.com

Mastercard Brings AI-Powered Voice Assistants To Quick Service Restaurants
Mastercard announced Thursday it inked a partnership with ZIVELO, a self-service kiosk technology company, to enhance the drive-in ordering experience for quick service restaurants. Mastercard said it marks the first time an artificial intelligence (AI)-powered voice assistant will be used in drive-in- and drive-through ordering. Mastercard and ZIVELO are partnering with Sonic Drive-In, which will be the first to pilot the technology at select Sonic locations around the country. Story in PYMNTS

US Airlines Charged Almost $5 Billion in Baggage Fees Last Year. Here’s How to Avoid Them
The U.S. Department of Transportation’s annual airline baggage fee report found that domestic carriers collected nearly $5 billion in baggage fees last year, up from $4.5 billion in 2017 and $1.1 billion a decade ago. American Airlines brought in the most money from baggage fees in 2018, collecting $1.2 billion. It was followed by United, which collected $889 million. So, how can you check a bag for free on a U.S. airline? With the exception of Southwest, which still allows customers two checked bags for free so long as they follow certain size restrictions, you’ll typically need to join a carrier’s rewards program, use a particular credit card or buy a premium ticket. Story by Alicia Adamczyk for CNBC

A New Survey Casts Doubt on the Idea That Contactless Cards Will Trigger More Mobile Payments
Conventional wisdom in the payments business has been that the advent and spread of contactless cards would pave the way for wider use of mobile payments. But research released this week indicates that may not be the case. Indeed, far from serving as the training wheels for mobile payments, new contactless plastic could tempt mobile-phone users away from using their devices for purchases. The ease of tapping and the familiarity of plastic could keep mobile-phone owners from using a mobile wallet. Story by John Stewart for Digital Transactions

Five Ways 5G Might Change How You Bank
It might be a few years until we’re all using global fifth-generation cellular wireless (5G) technology, but experts at Deloitte say that this new iteration of wireless could make an impact by the end of this year. While consumers will likely notice that 5G enables lightning fast downloads, connects millions of “Internet of Things” devices to one another, and removes the lag in their video chats, they may not realize that 5G will also be a key factor in enhancing their banking experience. Here are five surprising ways that 5G will be a catalyst for an optimized, personalized digital banking experience in the years to come. Story by Bob Legters for Forbes

Credit Bureaus Draw the Most Consumer Complaints to the CFPB
Credit reporting, credit-repair services or other personal consumer complaints accounted for 43 percent of all complaints to the CFPB last year. That’s up from 23 percent in 2016, according to U.S. PIRG Education Fund, a nonpartisan consumer advocacy group. Mistakes on credit reports can lead to consumers having to pay more for credit or being turned down for jobs or mortgages. The three major credit bureaus may be less responsive to resolving the issues “because consumers are not their direct customers,” PIRG stated. Instead, the credit bureaus’ primary clients are lenders. Not surprisingly, Equifax, Experian and TransUnion rank as the top three most-complained-about companies. They drew 88,333 of the total 257,193 complaints in 2018, or 34 percent of complaints for the year. Story by Kate Gibson for CBS News

India’s Ride-Hailing Firm Ola is Now in the Credit Card Business, Too
A day after India’s largest wallet app Paytm entered the credit card business, local ride-hailing giant Ola is following suit. Ola has inked a deal with state-run SBI and Visa to issue as many as 10 million credit cards in the next three and a half years. The move will help Visa and SBI (State Bank of India) acquire more customers in India, where most transactions are still bandied out over cash. For Ola, which rivals Uber in India, the foray into credit cards represents a new avenue to monetize its customers. Story by Manish Singh for Tech Crunch

 

bill-hardekopf

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
Featured Low Interest Card
Top Features : 1.25X miles on every purchase; no annual fee; bonus of 20,000 miles once $1,000 is spent in first 3 months
Featured Cash Back Card
Top Features : No Annual Fee, Bonus Offer, Cash Back
Featured No Annual Fee Card
Top Features : Earn cash back twice. 1% when you buy plus 1% as you pay; 0% APR for 18 months on balance transfers
Featured Bad Credit Card
Top Features : No Annual Fee; Cash Back match at the end of your first year; Social Security Alerts
Featured Fair Credit Card
Top Features : No annual fee; access to higher credit line after making first 5 monthly payments on time
Featured Limited/No Credit
Top Features : No annual fee; reports to major credit bureaus; access to higher credit line after making first 5 monthly payments on time