LowCards.com Weekly Credit Card Update–November 9, 2018

LowCards.com Weekly Credit Card Update–November 9, 2018

November 9, 2018         Written By Bill Hardekopf

China Gives American Express First Shot at its Huge Payments Market
American Express just became the first US credit card company to get the green light to start building its own payments network in China. The company said Friday that the Chinese central bank has given it preliminary approval to handle payments in yuan. AmEx can now start setting up the payments network through a joint venture with LianLian Group, its Chinese partner. In every other market around the world, AmEx processes transactions through its own network, whose hub is in Phoenix, Arizona. But in China, they have been handled by state-controlled payments giant China UnionPay. Once AmEx has built its own network in China, it will be able to use it to process payments on AmEx branded cards and collect fees on far more transactions. Story by Sherisse Pham for CNN

It’s the Holidays Already? Many are Still Paying Off Credit Card Debt Racked Up Last Year
Black Friday is right around the corner, but many Americans are still paying off the credit card debt they racked up over the holidays last year. Among shoppers who charged their holiday gifts in 2017, over 1 in 4 are still paying off those credit card purchases as they head into another holiday season, according to a survey from personal finance website NerdWallet. Despite the debt some Americans are still grappling with, shoppers aren’t putting their credit cards down just yet, with 73 percent saying they plan to use a credit card to buy presents this year, up from 58 percent in 2017. Story by Charisse Jones for USA Today

People Who Use Mobile Fintech Apps Tend to Make Worse Financial Decisions
A study of mobile-payment using millennials (ages 18-34) in the US found they were less likely to be financially literate than others of the same age who didn’t pay for things with their phones. They were also more likely to make other bad financial decisions, like overdrawing checking accounts, racking up credit card fees, borrowing from payday lenders, or dipping into their retirement accounts early. Story by John Detrixhe for Quartz

Wells Fargo Customers Stand By Bank and Sign Up for its New Credit Card
Wells Fargo consumers appear to be standing by the bank, which has been hit by a number of scandals over the past few years, most notably the creation of up to 3.5 million fake accounts using the names of unwitting customers. In its latest earnings report, the bank said the number of primary checking customers ticked up 1.7% from a year ago, a modest increase but notable given the bad news that’s continued to plague the company. Other key metrics showed positive movement as well. The number of customers using digital platforms–mobile and online–increased 4% since last year, and debit and credit card purchases were up as well. Story by Ethan Wolff-Mann for Yahoo Finance

Mastercard Transit Solutions Debuts ‘Tap And Ride’ Commute
Mastercard is working to simplify the daily commute through its “Tap and Ride” program, available in more than 150 cities. A new global study shows that metro systems around the world are carrying close to 170 million passengers each day, and with that number only expected to grow, improving the speed and reliability of transit services is a key concern for most urban residents. Mastercard Transit Solutions–along with the company’s banking and technology partners–offers cities a contactless or mobile payment option so they can provide better a experience for riders. Not only will commuters no longer waste time waiting in line at the ticket booth or holding up the bus while getting change, but the service is also able to reduce the cost of fare collection by 30 percent or more. Story in PYMNTS

New American Express® Business Gold Card Tailors Rewards to Expenses
American Express is getting personal with its newest small-business credit card. The American Express® Business Gold Card, with an annual fee of $295, will automatically change cardholders’ bonus categories each month based on their spending patterns. The new metal card earns 4X Membership Rewards® points on the 2 select categories where your business spent the most each month (up to the first $150,000 in combined purchases from these 2 categories each calendar year). The card also offers 25% points back after you use points for all or part of an eligible flight booked with Amex Travel, up to 250,000 points back per calendar year and no foreign transaction fees. Story by Robin Saks Frankel for NerdWallet

Walmart Sues Synchrony for $800 Million as Card Split Sours
Walmart’s divorce from the credit card issuer Synchrony Financial is spilling into court as negotiations falter over whether to shift billions of dollars in balances to the retailer’s new partner, Capital One. In a heavily redacted lawsuit filed Thursday in Arkansas federal court, Walmart asked for a jury trial and said it is seeking damages of at least $800 million. It accused the lender of breaching their agreement for credit cards issued to Walmart’s shoppers. Synchrony broke an “implied promise” that it wouldn’t harm Walmart’s ability “to receive fruits of the contract,” the retailer said in the complaint. Story by Jennifer Surane for Bloomberg

US Credit Card Debt: Locked and Loaded at $1 Trillion
The credit card industry is performing well, with the latest Fed numbers indicating 3.65% chargeoffs. It is indeed 11bp worse than 2Q17, but it is 1bp better than the prior quarter. To see the issue, you need to peel back the onion. Large banks are doing very well and drive the number with their portfolios. Chargeoff performance at the top 100 banks ended 2Q18 at 3.56%, but for those not in the top 100, the metric is a whopping 7.78%. Simply put, write-offs at small credit card issuing firms is twice that of large issuers. Large banks are running at 2.41% for 60+ delinquency; smaller banks are almost three times higher at 6.15%. It is likely to expect the large bank delinquencies to surge around 2Q19 when you consider the most recent trend in U.S. consumer debt reported by the Fed. Story by Brian Riley for Payments Journal

Why Refunds Take So Long to Post to Credit, Debit Cards
There are two primary reasons. Merchants don’t have as much motivation to process a refund as they do to process a purchase that will put money in their pockets. The second reason: It’s a bit of an illusion. When you make a purchase and your card is swiped, it sends a temporary authorization or hold to your bank. The transaction will show up as a “pending” transaction almost immediately. But the transaction that was authorized actually doesn’t completely process for perhaps a day or two or three. With a refund, there is no temporary authorization that shows up and needs to be completed. It’s all one transaction. And it processes within a day or two or three after the merchant initiates it. Story by Teresa Dixon Murray for the Cleveland Plain Dealer

4 Tips for a Successful Holiday Mobile App Strategy
As the holiday sales season quickly approaches, there’s an opportunity for retailers to not only generate consumer interest, but to also create and build upon a holiday mobile strategy that leads to long-lasting customer loyalty and an advanced mobile customer experience. A recent study by Coupofy.com has identified that mobile commerce now accounts for 30 percent of the total e-commerce spend and mobile shopping is growing 300 percent faster than traditional eCommerce. What’s more, Criteo reports that 66 percent of mobile transactions occur through an app. Here are four tips retailers can follow to ensure their mobile experience is ready for the holiday rush. Story by Casey Gannon for Retail Customer Experience

The information contained within this article was accurate as of November 9, 2018. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.


About Bill Hardekopf

Bill Hardekopf is the CEO of LowCards.com and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
View all posts by Bill Hardekopf
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