LowCards.com Weekly Credit Card Update–November 22, 2013
Retailers Use Deals to Get You Connected
Head into the mall this holiday season, and you won’t just be bombarded by 50% off signs or two-for-one deals. Once you hit the cash register, someone is bound to tempt you with more deals if you sign up for text messages, credit cards and other goodies. The pitch this holiday season is to get you hyper-connected to a store, restaurant or credit card. It’s a two-way street. Some discounts may be worth a little extra annoyance. Story by Susan Tompor for USA Today.
Late Payment Rate on Credit Cards Rose in the 3rd Quarter
More Americans fell behind on their credit card payments in the third quarter, when many consumers traditionally hit stores for back-to-school supplies. Credit reporting agency TransUnion said that the rate of credit card payments at least 90 days overdue was 1.36 percent in the July-September quarter. That’s up from 1.27 percent in the previous three-month period, but down from 1.50 percent in the third quarter last year. The latest card delinquency rate remains the second-lowest on TransUnion’s records, which go back to 2007. Story in the Associated Press.
Credit Card Rewards Program Examined by U.S. Credit Bureau
The U.S. Consumer Financial Protection Bureau is examining whether customers are being misled when they sign up for complex credit card reward programs and will mull new rules in this area. Consumers can face “detailed and confusing rules” about using rewards, CFPB Director Richard Cordray said in an e-mail. “We will be reviewing whether rewards disclosures are being made in a clear and transparent manner, and we will consider whether additional protections are needed.” The consumer bureau’s inquiry involves the marketing of rewards programs, particularly the marquee promise of a given card, such as cash back, or redeemable airline miles, and what a customer needs to do to get it. Story by Carter Dougherty for Bloomberg.
Save on Holiday Shopping Using Credit Card Rewards
The holidays are here, and soon consumers will be hitting the malls and emptying their wallets. Last year, consumers spent an average of $786 on holiday gifts According to the National Retail Federation’s holiday spending survey, nearly 75% of the expenditures will be made with plastic. 43.7% will rely on debit cards as their primary form of payment, 28.5% will use credit cards, 25.4% will use cash and 2.4% will use a check. If you do plan on paying with a credit card, you can save money by using reward cards to help pay for holiday shopping. Story by Bill Hardekopf for LowCards.com.
For Those in Their 20s, A Finding That They Don’t Manage Debt Well
Young adults have been ratcheting back on most forms of debt, other than student loans. But an analysis by Experian, one of the three major credit-reporting agencies, suggests that the millennial generation—those now in their 20s–could do a better job at managing the debt they have. Millennials have the fewest number of credit cards and the lowest average balance on them, according to Experian’s annual state of credit report. Yet, they also have the lowest credit scores, and a relatively high incidence of late payments. Millennials have low overall debt (about $23,000 per person on average, comparable to what the oldest Americans have), and the lowest average card debt ($2,700). Generation X, roughly those in their early 30s to age 46, has the highest average debt of the four generations analyzed, at $30,000. But while the average credit score in Experian’s analysis is 681, the average for millennials is just 628. Story by Ann Carrns for The New York Times.
8 Potential Pitfalls of Credit Cards
Credit cards are convenient–and many offer rewards on purchases. But if you don’t use credit responsibly, you can quickly rack up debt and decimate your credit score in the process. Here’s a look at eight potential pitfalls to avoid: falling for marketing hype, skipping the fine print, making only the minimum payment, taking a cash advance, ignoring statements and other mail, maxing out your cards, missing your due date, and chasing points or miles. Story by Susan Johnston for U.S. News.
GE to Exit Retail Lending
GE plans to exit the retail lending business–the conglomerate’s most aggressive move yet to shrink the size of its financing arm, which still generates half its profit. The company expects to split off the business the following year by distributing the rest of the stock to GE’s shareholders, though it said it may pursue a sale instead. The conglomerate’s North American retail business supplies store credit cards and financing for sales on credit used by 55 million Americans at retailers such as Walmart and Banana Republic. GE is moving to reduce its lending business under pressure from shareholders, who value the company’s industrial operations more highly. Story by Kate Linebaugh for The Wall Street Journal.
Credit Bureau Complaints Bring Relief for 30 Percent
About 30 percent of people get relief when they complain about credit bureaus to the new federal consumer watchdog, according to a new report. Two-thirds of the complaints concerned allegedly false information on a consumer’s credit report at the big three bureaus, Equifax, TransUnion and Experian. Only 4 percent involved credit monitoring services, which charge consumers money. While 30 percent of complaints brought relief, 63 percent were closed with an explanation to the consumer. Equifax said it gave relief to consumers 63 percent of the time. Experian did so in 5 percent of cases and TransUnion in 22 percent. Story by Jim Gallagher for the St. Louis Post-Dispatch.
Hot Startup Coin Has Three Big Problems
Coin is a buzzy new startup that’s making a digital credit card that stores information for all the other cards in your wallet. Coin’s splashy launch generated a lot of attention, but there are several big issues that need to be resolved if it’s going to be a successful product. Once your cards are stored, you can use Coin’s digital display to select which of them you’d like to use to pay. Merchants swipe Coin just as they would a regular card. Story by Julianne Pepitone for CNNMoney.
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 14.42 percent, slightly lower than last week’s 14.45 percent. Six months ago, the average was 14.26 percent. One year ago, the average was 14.29 percent.