LowCards.com Weekly Credit Card Update–November 8, 2013
MasterCard 3rd-Quarter Net Rises 14% on Increased Purchases
MasterCard said third-quarter earnings rose 14% as spending on its credit and debit cards continued to grow. MasterCard, like its larger rival Visa, operates a payments network that processes transactions made on debit and credit cards. Revenue grew 16% to $2.22 billion, driven by 16% higher processed transactions and a 19% increase in cross-border volume, which measures payments made in one country with a card issued by a bank in another country. Cardholders made $763 billion in purchases on MasterCards, up 14% on a local-currency basis from a year earlier. Purchase volume in the second quarter was up 12% on a local-currency basis. Story by Ben Fox Rubin and Robin Sidel for The Wall Street Journal.
Where to Get Your Truly Free Credit Score
Google “free credit score,” and you’ll be pointed to web sites that exploit your interest by luring you to expensive credit monitoring services that cost as much as $200 a year. But now, some consumers can get their first truly free credit score, if they’re a First National Bank of Omaha or Barclaycard U.S. credit card holder. The free scores, which customers can see updated every month, are the actual FICO account management scores used by the lender, not the myFICO, PLUS, VantageScore, or other so-called “educational” scores, which are not actually used by many, or sometimes any, lenders, insurers, or other businesses. However, the account management score is not the same one used to grant or deny credit and set interest rates. Different scores give differing weight to the various pieces of information on a credit report, in this case putting more emphasis on how you manage your revolving credit rather than your overall credit management. Story by Jeff Blyskal for Consumer Reports.
Reduce Credit Card Debt with Micropayments
Holiday shopping is just around the corner, and consumers need to have their credit card balances as low as possible in order to avoid costly interest charges. One way to do this is to make micropayments on their credit card bill. While we are conditioned to pay our credit card bill once a month, consumers can actually make a number of smaller payments throughout the month. Some banks and issuers allow payments to be made as often as once a day. If you carry a balance, micropayments can reduce the interest because most credit card companies charge interest based on your average daily balance during the month. Pay more often and you reduce your average daily balance and therefore the interest you pay that month. Story by Bill Hardekopf for LowCards.com.
Credit Rankings Note How Revolvers Use Plastic
Now there’s another reason not to run up big credit card bills this holiday season that you can’t pay off. The three major credit bureaus have started adding new details about credit card payments to credit reports that reveal whether a cardholder is a “revolver”–someone who carries a balance each month, racking up interest charges–or a “transactor”–someone who makes purchases but typically pays off the balance in full. Credit bureaus say the additional information will help card issuers better target their products to customer needs and better identify people who are the best credit risks. Customers who pose the least risk generally are offered cards with the best rates and terms. Previously, credit reports contained a card’s monthly balance (before payments), the credit limit and whether the cardholder failed to make any minimum payments. Story by Patricia Sabatini for the Pittsburgh Post Gazette.
U.S. Regulator Prepares Crackdown on Debt Collectors
Debt collectors using text messages and social media to pursue delinquent borrowers could come under new scrutiny as the U.S. consumer financial watchdog warns of new rules as part of a crackdown on the collection industry. The Consumer Financial Protection Bureau said that before it formally proposes any rules, it wants to hear how collectors verify borrowers’ information and communicate with consumers. Among questions it is asking consumers, banks and the collection industry is whether there could be privacy concerns or other harm from being contacted by and responding to debt collectors via text message, social media or other Internet-based tools. Consumer bureau staff members did not give a timeline for when they might propose rules. They said they would probably convene a small business panel to discuss potential rules first. Story by Emily Stephenson for Reuters.
BofA Said in Settlement Talks Over Credit Card Products
Bank of America is negotiating with the Consumer Financial Protection Bureau to settle allegations it deceived customers in the sales of credit card add-on products, according to two people briefed on the talks. A deal isn’t imminent, as the agency and Bank of America wrangle over the terms of the settlement. One person said a sticking point is the restitution the bank would pay to customers who were charged for the products, which include credit monitoring and debt cancellation products. A final agreement with Bank of America could begin winding down an industrywide investigation that the consumer bureau started with its first enforcement action, against Capital One Financial Corp. in July 2012. Story by Carter Dougherty for Bloomberg Businessweek.
Few Banks Easing Mortgage Standards in Response to Higher Rates
Most U.S. banks have maintained their existing lending standards on residential loans in recent months despite rising interest rates and softer demand for mortgages, a Federal Reserve survey found. Nearly 80% of banks said their credit standards for mortgages remained basically unchanged from July through September, according to a quarterly Fed survey of bank loan officers. Only about 15% of banks said their standards for mortgages have eased somewhat. The Fed report includes responses from 73 domestic banks and 22 U.S. branches of foreign lenders. The survey, conducted between Oct. 1 and Oct. 15, also asked a series of questions about the effect of rising mortgage rates on banks’ lending. The average interest rate on a 30-year fixed-rate mortgage increased by more than one percentage point from May to October. Story by Sarah Portlock and Eric Morath for the Wall Street Journal.
Square Exploring 2014 IPO with Banks
Technology entrepreneur Jack Dorsey is trying to pull off two high-profile initial public offerings in the span of one year. Square Inc., the payments startup with a square credit card reader that plugs into Apple and Android-based mobile devices, has held discussions with banks, including Goldman Sachs and Morgan Stanley, about a 2014 IPO, said a person familiar with the matter. The public offering would come on the heels of Twitter Inc., which is expected to start trading shares Thursday. Dorsey co-founded both San Francisco companies and remains chairman of the microblogging website. Story by Douglas MacMillan for the Wall Street 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 14.45 percent, slightly lower than last week’s 14.46 percent. Six months ago, the average was 14.25 percent. One year ago, the average was 14.20 percent.