LowCards.com Weekly Credit Card Update–May 8, 2015
Does Credit Card Debt Lead to Depression?
Credit cards can carry more than high interest rates–they actually might increase your chances of depression. It’s common sense that high levels of debt can stress you out. Now researchers have found a statistically significant link between short-term household debt, such as credit card debt and overdue bills, and increases in symptoms of depression. The link between depression and debt was strongest among unmarried people, people near retirement and those who are less educated, according to the new study by researchers at the University of Wisconsin-Madison. The study also found that, on average, people’s depressive symptoms tend to increase as their short-term debt rises. Story by Tom Anderson for CNBC.
Harbortouch is Latest POS Vendor Breach
Last week, Allentown, Pa. based point-of-sale (POS) maker Harbortouch disclosed that a breach involving “a small number” of its restaurant and bar customers were impacted by malicious software that allowed thieves to siphon customer card data from affected merchants. KrebsOnSecurity has recently heard from a major U.S. card issuer that says the company is radically downplaying the scope of the breach, and that the compromise appears to have impacted more than 4,200 Harbortouch customers nationwide. Story by Brian Krebs for Krebs on Security.
AmEx Launches Plenti Cross-Branded Rewards Program
American Express is changing the way customers earn rewards points, thanks to the new Plenti rewards program launched this week. Plenti is the first rewards card to offer interchangeable loyalty points across multiple brands, and it may be just what AmEx needs to repair its image in the card industry. With a Plenti rewards card, users can earn one Plenti point for every $1 they spend at participating partners. Some of those partners include AT&T, Enterprise, Hulu, Exxon, Macy’s and Rite Aid, with new companies expected to join the program in the future. Cardholders can earn loyalty points with any partner to use on discounts, special offers, and purchases with other partners in the program. Anyone over the age of 13 can sign up for free for the Plenti rewards program. Story by Lynn Oldshue for LowCards.com.
Despite March Rise, Credit Card Use at Four-Year Low in First Quarter
Consumers were more wary of using their credit cards in the first quarter than anytime in the past four years, the Federal Reserve said Thursday. Credit card debt was down at a 0.3% rate in the first quarter. That’s the lowest since the first quarter of 2011. The drop comes despite a rebound in March. Credit card debt rose by a seasonally adjusted $4.4 billion in March, or at a 5.9% annual rate. This is the largest percentage increase since last July. It follows two straight 3.3% declines. Story by Greg Robb for MarketWatch.
Sally Beauty Investigating Possible Data Breach
Sally Beauty Holdings Inc. on Monday said it is investigating reports of unusual activity involving payment cards at some stores, a year after disclosing a breach that affected more than 25,000 customer records. The retailer said it has been working with law enforcement and its credit-card processor but until the investigation is complete, “it is difficult to determine with certainty the scope or nature of any potential incident.” Last March, Sally Beauty reported an attempted data breach that it later determined to have affected more customers than initially estimated. The company said at the time that it believed it had shut down the attack. Story by Lisa Beilfuss for The Wall Street Journal.
Pentagon Credit Cards Used for Gambling, Escorts
A Defense Department audit has found that a number of Pentagon employees used their government credit cards to gamble and pay for “adult entertainment”–findings that are expected to lead department officials to issue stern new warnings. The audit of “Government Travel Charge Transactions” by the Department of Defense Office of Inspector General, which is to be made public in coming weeks, found that both civilian and military employees used the credit cards at casinos and for escort services and other adult activities–in Las Vegas and Atlantic City. Story by Bryan Bender for Politico.
AmEx Cannot Stop Merchants From Promoting Cheaper Cards
A federal judge has ordered American Express to adjust its merchant agreements which prohibit retailers from encouraging their customers to use credit cards with fewer transaction fees. The ruling by U.S. District Judge Nicholas Garaufis could result in some better deals for shoppers and a loss of revenue for AmEx. American Express has some of the costliest interchange fees in the industry, but until now, merchants were not allowed to steer customers to pay with cheaper cards. Under this ruling, store owners will be able to reward customers who choose to pay with Visa, Discover, or MasterCard with incentives, such as discounts or rebates. Story by Bill Hardekopf for LowCards.com.
Start-up That Wants to Blow Up Credit Cards Raises $275 Million
Max Levchin is no stranger when it comes to revolutionizing the financial industry. He’s one of the cofounders of PayPal. Now he wants to overhaul the financial industry again. This time, he’s making consumer finance as easy as swiping a credit card. His latest startup, Affirm, allows users to borrow money within seconds at the point of purchase–it’s currently only offered online and on mobile devices–and pay off the loan in fixed monthly payments. The way it works is simple: If you buy something on a site that offers Affirm’s Buy with Affirm, you can sign up for it with your name, phone number, email, and date of birth. Within seconds, Affirm’s software goes through a bunch of data associated with your personal information and determines your creditworthiness. Then it gives the terms of the loan with clear instructions on the amount owed, the payment due date, and interest rates. You can choose to pay it off in three-, six-, or 12-month installments, and will receive payment reminders by email and text message. Story by Eugene Kim for The Fiscal Times.
The Little-Known Lifeline for People Drowning in Credit Card Debt
If you’re struggling to make payments on your bills, you may not know that you have options – including what’s typically called a hardship repayment program. These are programs that banks may offer directly to you, their account holder, if you express how unaffordable payments have become (vocally with a phone call, or behaviorally by missing payments). These repayment plans are typically something you see with credit card bills. And the benefits from them are primarily related to your interest rate being lowered temporarily–or for the life of the balance as long as your payments are made on time. Story by Michael Bovee for Credit.com.
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 14.48 percent, the same as last week. Six months ago, the average was 14.51 percent. One year ago, the average was 14.49 percent.