LowCards.com Weekly Credit Card Update November 9
Consumer Credit Growth Cools, Credit Card Use Sags
In September, growth in consumer credit cooled as households appeared to use their credit cards less frequently. According to Federal Reserve data released this week, consumer credit grew $11.36 billion in September, lower than the $18.39 billion in credit growth registered the prior month. Revolving credit, which mostly measures credit card use, dropped $2.90 billion in September. Story by Jason Lange for Reuters.
Scramble for Cash in Sandy’s Wake
Banks scrambled to make cash available throughout the Northeast as power outages from superstorm Sandy kept hundreds of ATMs offline. The demands for cash after the devastating storm have come from customers who have fewer withdrawal options and businesses that are accepting cash only due to communications problems that leave them unable to accept credit and debit cards. Story by Dan Fitzpatrick, Robin Sidel and Shayndi Raice for the Wall Street Journal.
AmEx Now Offers Special Deals Via XBox
Cardholders who link their American Express cards to their Xbox Live account will receive offers and coupons both in and out of games. This marks the first time the issuer has entered the interactive TV space. AmEx customers can also link their account to their Foursquare, Twitter or Facebook accounts to unlock offers. Story by Tricia Duryee for All Things D.
HSBC Fears U.S. Money Laundering Fines to Top $1.5 Billion
A fine for violating federal anti-money laundering laws could cost HSBC Holdings much more than $1.5 billion and could lead to criminal charges as well. The bank will have to set aside an additional $800 million to cover a potential fine for breaches in anti-money laundering controls in Mexico and other violations. The provision was on top of $700 million it put aside in July.
Story by Steve Slater, Matt Scuffham and Aruna Viswanatha for Reuters
The Dangers of Convenience Checks
It is very common to receive convenience checks from your credit card issuer. These promotional checks look like free money, with 0 percent offers in bold print. These offers may seem like a tempting way to pay for holiday shopping, but consumers need to read the fine print to know exactly what you are getting. The convenience check is linked to your credit card account. The promotional letter describes the checks as an easy way to get cash, transfer balances, or make a purchase that you have been putting off. It all can be yours if you just sign the check. But these convenience checks can be a very costly way of borrowing money. Story by Bill Hardekopf for LowCards.com.
Consumer Reports: Americans See Major Decline in Financial Difficulties
There has been a major decline in the financial difficulties faced by consumers as well as a rise in consumer sentiment ahead of the election and winter holidays, according to the Consumer Reports Trouble Tracker Index. The Index is at the lowest level since first measured in April 2009, declining from 50.2 last month to 38.7. The largest improvement was among those earning $50,000 or more, although lower-income Americans also saw modest improvement. Story by Maggie Shader for Consumer Reports.
The Importance of Elizabeth Warren
The election of Elizabeth Warren as United States senator from Massachusetts was one of the most important results in this week’s election. She is well placed, not just to play a role in strengthening Congressional oversight but also in terms of helping her colleagues think through what we really need to make our financial system more stable. We should aim to simplify and to make matters more transparent, exactly along Senator Warren’s general lines. We need elected officials willing and able to stand up to concentrated and powerful corporate interests. Empower the consumer–and figure out how this can get you elected. Story by Simon Johnson for the New York Times.
Substantial Decline in College Credit Card Agreements
A report recently released by the Consumer Financial Protection Bureau showed the number of college credit card agreements between issuers and institutions of higher learning or alumni organizations dropped dramatically in 2011 versus 2010. The data revealed a 20.6 percent decline in the number of agreements from 1,005 in 2010 to 798 in 2011. In addition, the amount of revenue paid by issuers to institutions or alumni groups fell 15 percent from $73.5 million in 2010 to $62.4 million in 2011. Story by Bill Hardekopf for LowCards.com.
MasterCard and ING Test Hybrid Online and Mobile Payment System
The Dutch banking group ING and MasterCard are testing a payments system that takes advantage of the secure element in NFC smartphones, without using the NFC short-range communications technology itself. Story by Nick Clayton for the Wall Street Journal.
Visa Signs Credit Card Deal with Three Myanmar Banks
Visa said that it will partner with three banks in Myanmar, allowing its branded credit cards to be issued and accepted in the market–a move designed to bring the long-isolated Southeast Asian country closer to global financial integration. In September, competitor MasterCard signed a similar licensing agreement with CB Bank–one of Myanmar’s largest private banks–and said it was also preparing ATMs and point-of-sales machines to accept credit cards issued by foreign banks. Story by Shibani Mahtani for the Wall Street Journal.
LowCards.com Weekly Credit Card Rate Report
Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.29 percent, slightly higher than last week’s average of 14.27 percent. Six months ago, the average was 14.26 percent. One year ago, the average was 14.17 percent.