LowCards.com Weekly Credit Card Update–May 26, 2017

May 26, 2017, Written By Lynn Oldshue

Retailers Cheer GOP Retreat on Ending Debit Card Fees Limit
Restaurants, grocers and other businesses celebrated on Thursday as House Republicans backed off efforts to eliminate the cap on fees that banks can charge retailers when customers use a debit card. The chairman of the Financial Services Committee, Rep. Jeb Hensarling, R-Texas, had pushed for scrapping the limit as part of his legislation to gut the Dodd-Frank law, the strict financial rules established after the 2008 financial crisis and the Great Recession. Big banks have lobbied strenuously against the cap, arguing that it hurts financial institutions while giving a break to retailers. The issue, however, divided congressional Republicans and had forced the leadership to delay a vote on Hensarling’s bill. But late Wednesday, Hensarling said he would cut the debit card cap provision from his bill. When Congress responded to the 2008 financial crisis, it capped the debit card fee as a way to lower costs for businesses. Story by Kevin Freking for the Associated Press

The Lower Your Self-Esteem, The Higher Your Credit Card Fees
A premium credit card is typically associated with high social status and higher fees, but recent research suggests that people will choose them because it signifies higher income over and above its benefits. Economists worked with an Indonesian bank that markets premium platinum credit cards to high-income customers. “Demand for the platinum card greatly exceeds demand for a nondescript control product with identical benefits,” according to the study distributed Monday by the National Bureau of Economic Research, a Cambridge, Mass.-based research group. What’s more, the lower your self-esteem, the more likely you will opt for flashy credit cards with higher fees. “Social image is a substitute for self-image,” the researchers wrote. “Demand for status is psychological in nature.” There’s one real-world drawback: Consumers may use the platinum card in social situations when they’re better off using a less prestigious card. In order to appear wealthier, customers may actually forgo money in the form of cash rewards each time they use the platinum card instead of other cards in those situations. Story by Quentin Fottrell for MarketWatch

Google Plans To Track Credit Card Spending
Google is planning to track billions of credit and debit card sales to compare online ad clicks with money spent offline. The program will allow advertisers to see whether online ad campaigns generate offline sales. Announcing the service, Google said that it captures around 70% of credit and debit card transactions in the US. Critics said it represented another blow to privacy. Google has vast amounts of data on net users, from services such as AdWords, Google Analytics and DoubleClick Search which combine details about the ads displayed on devices with what has been searched for in Google. Google can also collect location information from phones, allowing it to work out when a user has seen an ad, and whether they have searched for the product advertised and gone to an offline shop to buy it. Story for the BBC

Spending on Credit Card Rewards Has Exploded in Banks’ Frenzied Competition over Customers
Credit card rewards have become increasingly lucrative, as credit card issuers battle for customers. From 100,000 point sign-on bonuses to 6% cash back offers, it has never been a better time to be a credit card customer. In 2016, the largest credit card issuers spent $22.6 billion on rewards, compared to $10.6 billion in 2010. In Q1 2017, credit card issuers spent $6.2 billion on rewards, compared to $5.1 billion in Q1 2016, a 22% year-over-year growth rate. Beginning in 2016, Chase has led the pack in total rewards spending. Spending on credit card rewards at Chase grew 123% since 2010, and Chase now spends more money on rewards than American Express. American Express, long the leader in rewards, had the smallest increase in rewards spending with a 36% growth during the period of 2010-2017. With the loss of their deal with wholesale retailer Costco, American Express is offering more lucrative rewards on all its other cards. Citibank has the highest percentage increase in spending since 2010 (333%). Citi won the Costco deal and has also been busy launching its own rewards products, including Citi Double Cash (which can pay up to 2% cash back) and its suite of Thank You products. Story in Business Insider

How to Spot and Avoid Credit Card Skimmers
One of the more successful tools of 21st-century crooks is the skimmer. Thieves attach them to ATMs, gas pumps, point-of-sales (POS) systems and other places people swipe their credit and debit cards. Once in place, this sneaky bit of electronics steals the magnetic strip information from your card. The thieves use this information to clone your card, and once they have a clone, they can drain your bank account, or run up huge bills and trash your credit before you even know it. That’s one reason credit card companies and stores are switching to EMV cards, but it will take a while before every retailer accepts them. Individual thieves and groups have stolen millions of dollars using skimmers. It doesn’t help that skimmers are available for sale to anyone who wants to buy them, so they can show up anywhere. Just glancing at the news over the last few months shows that skimmers were found at dozens of local gas stations, ATMs and banks around the country. If you had any doubts, skimmers are out there and can be anywhere. That’s why you need to know how to spot a skimmer before it snags your information. Story in Komando.com

Many Americans Are Still Totally Confused About Credit Scores
When it comes to credit, most Americans know a few key points. They understand that a good credit score is important and a bad score can stop them from getting a credit card or qualifying for a loan. After that, there’s a good deal of confusion and misinformation. A new survey of more than 2,000 adults found that 11% percent thought everyone starts with a perfect credit score. In fact, credit is something you build over time by using credit responsibly. But you can trash that score overnight if you pay bills late or max out your credit cards. About half (49%) didn’t know that having bad credit can limit a person’s options for cell phone service. There are ways to get a cell phone without a credit check, such as with a prepaid plan, but people with poor credit have fewer options. More than two in five (41%) mistakenly believed that carrying a small balance on a credit card month to month could help improve a person’s credit scores. Story by Herb Weisbaum for NBC News

BitPay Rolls Out Prepaid Visa Debit Card with Bitcoins to 132 Countries
BitPay, a bitcoin payments processor that is used by forex brokers, has announced it is rolling out its prepaid Visa debit card with bitcoins to 132 countries across the world. The card can be linked to any bitcoin BitPay wallet and can be used for shopping online or in brick and mortar stores that accept Visa debit cards across the world, as well as for cash withdrawals from ATMs. The net cash in the card can be monitored and managed instantly through a mobile application. According to BitPay, the card makes it possible for users to convert bitcoin into a spendable dollar, euro, or pound balance on a Visa Prepaid Debit Card in just minutes and solves the problems many merchants and users face in trying to convert their bitcoins into fiat currencies. Story by Henry Hughes for SMN Weekly

NetSpend Launches Industry First: Prepaid Affinity Card With United Airlines
Prepaid card provider Netspend and United Airlines announced in a press release the launch of the MileagePlus GO Visa Prepaid Card, the first prepaid card program in the U.S. that allows consumers to directly earn miles for qualifying purchases. This is good news for the growing number of Americans who are using prepaid cards for everyday purchases. In fact, the prepaid market has grown from less than $1 billion in 2003 to nearly $96.8 billion in 2015. And the total dollar value loaded onto these prepaid cards is expected to reach $112 billion by 2018. The MileagePlus GO Visa Prepaid Card will be available this summer and will reward cardholder spending with award miles that can be redeemed through United’s MileagePlus loyalty program. Story in PYMNTS

Target to Pay $18.5 Million to 47 States in Security Breach Settlement
Target will pay $18.5 million to 47 states and the District of Columbia as part of a settlement with state attorneys general over a huge security breach that compromised the data of millions of customers. The settlement ends a yearslong investigation into how hackers obtained names, credit card numbers and other information about tens of millions of people in 2013. Target has spent $202 million on legal fees and other costs since the breach, according to the company’s most recent annual statement. The investigation, led by attorneys general in Connecticut and Illinois, concluded that attackers had stolen credentials from a third-party vendor that they used to access a customer database. They then installed malware that helped capture other consumer data. As part of the settlement, Target agreed to tighten its digital security, including maintaining software and encryption programs to safeguard people’s personal information. The retailer will have to separate its cardholder data from the rest of its computer network and pay for an independent assessment of its security measures. Story by Rachel Abrams for The New York Times

Mobile Fraud a Blind Spot for Ecommerce Merchants
Last year’s Black Friday online sales smashed sales records, generating $3 billion with more than $1 billion of sales coming from mobile. This year, over two billion users are likely to purchase at least once using mobile devices. The shift to mobile is driven by younger consumers. The growing trend validates companies’ efforts and investments in building mobile-ready online stores. However, dangers loom as merchants are scrambling to meet the demands of the threat posed by mobile fraud. this preoccupation with performance and UX improvements may be putting other aspects of ecommerce like security and fraud prevention on the backseat. A new mobile ecommerce fraud report by fraud prevention platform Riskified reveals that merchants should start to pay attention to fraud prevention as mobile sales increase. Behaviors that are used as flags to aid fraud prevention for desktops may not fully be applicable for the mobile experience. Ninety percent of merchants are reported to use the same fraud prevention tools across channels. This may be creating a major blind spot that could allow mobile ecommerce fraud to thrive if left unchecked. Story by Ralph Tkatchuk for Entrepreneur

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 15.25 percent, identical to last week. Six months ago, the average was 14.75 percent. One year ago, the average was 14.72 percent.

About Lynn Oldshue

Lynn Oldshue has written personal finance stories for LowCards.com for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue