LowCards.com Weekly Credit Card Update–November 13, 2015
Apple’s Tim Cook Says Cash Will be Dead for the Next Generation of Kids
Apple CEO Tim Cook is making another bold prediction about money. Back in January, he forecasted that 2015 would be the year of Apple Pay (a claim that hasn’t come to fruition, but is looking less and less absurd.) And now, he’s telling university students that their future children will be totally unfamiliar with the concept of cash. Cook, in the UK to promote Apple’s mobile wallet, made the assertion while fielding questions from students at Trinity College Dublin, the Telegraph reported. “Your kids will not know what money is,” Cook told them. The Apple boss may not be far off base. Cash usage is in decline in the UK and elsewhere as more consumers take up other payment options, like mobile payments and debit, credit, or prepaid cards. In 2014, the number of non-cash payments made in the UK eclipsed, for the first time, those made with physical currency. Story by Ashley Rodriguez for Quartz.
79% of Small Business Owners Unprepared for Cyber Attack
Nearly eight in ten (79%) small business owners do not have a cyber attack plan, even though 63% have already been the victims of at least one attack, according to a Nationwide study. Respondents were asked why they had no cyber attack response in place, and 46% said they felt their current software was secure. An additional 40% said they do not think their company will be the victim of a cyber attack. Story by Natalie Rutledge for LowCards.com.
The Rise of Reloadable Prepaid Cards Could Affect the Way Millennials Approach Banking
Prepaid cards were originally targeted at consumers with minimal access to financing or bank accounts. However, the appeal of these cards has broadened, attracting traditional banking customers as well. This is because the formula behind prepaid cards resonates with the growing population of debt-averse consumers–namely, millennials and Gen Xers–who recently suffered through the Great Recession. The prepaid cards industry is diversifying. Higher-end issuers like American Express are now pushing prepaid cards like Serve and Bluebird to customers, and these cards are seeing stellar growth in terms of spending volume. The push by these issuers is adding dynamism to the prepaid cards market. Younger consumers, in particular, are adopting prepaid cards, and many cite the avoidance of overdraft fees and debt as motivating factors. Prepaid cards are ultimately giving consumers an avenue to escape from the unsavory fees that banks charge on credit and debit cards, and any measurable shift away from these products could dent banks’ retail banking revenues. Story by Evan Bakker for Business Insider.
What You Can Learn From Marco Rubio’s Credit Card Mistakes
Presidential candidate U.S. Sen. Marco Rubio has found himself at the center of a political storm, but his voting record and policy positions aren’t drawing the unwanted attention. Rather, it’s something that has tripped up many people: an apparently sloppy use of credit. Newly released American Express charge card statements from 2005 and 2006 — when Rubio was serving in the Florida Legislature — combined with statements previously disclosed read like a cautionary tale. Not only did he use a corporate card from the Republican Party of Florida for personal expenses, but he also accrued more than $1,700 in delinquency and late fees over a four-year period, The Washington Post reports. The whole controversy shows that not even the powerful are immune to problems with managing credit. It’s also instructive, especially if you’ve made a few slip-ups of your own and want to get back on the right track. Story by Claire Tsosie for Nerd Wallet.
How College Kids Can Dodge Credit Card Pitfalls
Despite waves of strict legislation, credit card companies still spend millions to attract new, young customers–and many financially inexperienced students are signing up, often to their own detriment. These days, in order to get a credit card, college students must either put down a deposit in exchange for a secured card or get a parent or other adult to be a co-signer, which means the co-signer is also on the hook should they fall into credit debt. But there are additional steps students can take to be sure they pick the best card for their needs and start building a good credit history. Story by Jessica Dickler for USA Today.
VW Offers $1,000 in Credit Cards to U.S. Owners of Some Cheating Diesels
Volkswagen’s U.S. subsidiary said on Monday it will offer $1,000 worth of credit cards, of which half may be spent at VW and Audi dealerships, to owners of certain diesel models the company has admitted do not comply with government emissions standards. The automaker said eligible U.S. owners of nearly 500,000 VW and Audi models equipped with 2.0 liter TDI diesel engines can apply to receive a $500 prepaid Visa card and a $500 dealership card, as well as three years of free roadside assistance services. The program could cost VW nearly $500 million, half of which could flow directly to dealers. Story in Reuters.
Senators Demand Protection for Prisoners over Debit Card Fees
The Consumer Financial Protection Bureau is facing pressure to regulate a debit card program for released prisoners. A group of 18 senators wrote a letter to the CFPB about the high fees on these debit cards that all released prisoners receive. When prisoners are released, many of them have accumulated money from work they did in the prison or funds that friends and family members have sent them while they served time. This money is released in the form of a prepaid debit card rather than cash or check. The prisons say they do this as a matter of convenience, saving them from having to issue cash or write checks. Nevertheless, government officials are fighting to reduce the fees on the cards to help ex-prisoners secure as much of their money as possible. The problem is that the debit card programs aren’t designed to benefit the prisoners. Rather, some prisons and jails choose a card provider based on the commission they are offered, even if that means higher fees for the inmate. The fees vary from one issuer to the next, but one report showed an average ATM withdrawal fee of $3 and a transfer fee as high as $30. Story by Bill Hardekopf for LowCards.com.
Uber is Trying to Lure New Drivers by Offering Bank Accounts
One of the biggest challenges Uber faces as it aggressively expands and fends off competitors is attracting-and then retaining-drivers. As part of those efforts, the ride-share startup is planning to offer banking services to drivers, according to people who work closely with financial institutions and Uber, as well as documents reviewed by Quartz. The plan, which is in its early stages, would allow drivers to easily register for a bank account or prepaid card when signing up to work for Uber, according to the documents. By doing so, drivers can get paid the same day they work, compared to weekly now. Uber has reached out to potential partners to handle the banking itself, people familiar with the matter say. These people requested anonymity due to the sensitive nature of the project and ties to Uber. Story by Ian Kar for Quartz.
While Mobile Banking Grows, Branches Drive Business
While mobile and online banking continue to increase, brick-and-mortar branches drive referrals and customer satisfaction, according to a study based on a poll of 3,800 bank customers. Market Force Information found that 72 percent of customers whose bank offers a mobile app have downloaded it, up from 7 percent in 2014. Not so for digital wallets–such as PayPal Mobile or Apple Passbook. More than half surveyed say they don’t know what it is, and only 12 percent are using them. However, the vast majority of customers still retain retail bank accounts and visit branches. Sixty-three percent said use a traditional retail bank as their primary provider, while 29 precedent use a credit union, community bank or microfinance bank. Only 3 percent primarily use an e-bank. Story by Greg Edwards for the St. Louis Business 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 14.62 percent, slightly higher than last week’s average of 14.58 percent. Six months ago, the average was 14.50 percent. One year ago, the average was 14.50 percent.