LowCards.com Weekly Credit Card Update–October 13, 2017

LowCards.com Weekly Credit Card Update–October 13, 2017

October 13, 2017         Written By Lynn Oldshue

JPMorgan, Citigroup Expect More Credit Card Users to Default
Banks have enjoyed years of declining losses from fewer consumers defaulting on debts. They appear to be preparing for a turn. Shares of JPMorgan Chase & Co. and Citigroup Inc. fell after the banks boosted their reserves for consumer-loan losses by the most in more than four years. Both lenders set aside money in the third quarter because they expected write-offs for credit-card lending to climb in periods ahead, with Citigroup saying the increase is coming faster than it had anticipated. Story by Hugh Son, Dakin Campbell and Jennifer Surane for Bloomberg

Google Is Essentially Building An Anti-Amazon Alliance, And Target Is The Latest To Join
Google and the country’s biggest brick-and-mortar retailers have one main problem in common: Amazon. Now both sides are acting like they are serious about working together to do something about it. On Thursday, Target and Google announced that they are expanding what was a years-old delivery partnership from a small experiment in a handful of cities to the entire continental U.S. The expansion will allow Target to become a retail partner in Google’s voice-shopping initiative, which lets owners of the Google Home “smart” speaker order items through voice commands like owners of the Echo can do from Amazon. The announcement comes seven weeks after Walmart inked a similar deal with Google to offer hundreds of thousands of products through the service. Other big-box retailers like Home Depot are also on board. Story by Jason Del Rey for Recode

Citigroup Hasn’t Played Its (Credit) Cards Right
Citi all but gave up on its credit-card business in 2009, part of its broad retreat after the financial crisis. A few years ago, it realized that was a mistake. Starting in 2015, the bank began investing in the division again, particularly going after the branded business of retailers. Its biggest move came a year ago when it undercut American Express and took over Costco’s card business. Citi executives have warned that the expansion would boost costs and losses for a time. But they have repeatedly said that investors would see an improvement starting in the second half of 2017. In the third quarter, at least, the payoff wasn’t evident. Credit card loans were up just 1 percent from the quarter before. Credit-card margins, as a percentage of loans, dropped to 7.3 percent, down from 8.7 percent a year ago. And credit-card losses were up 36 percent, to $611 million, from a year ago. Story by Stephen Gandel for Bloomberg

Amazon Is Making It Easier For Teens To Use Their Parents’ Credit Cards
Amazon.com, already the most popular online retailer among adults, is setting its sights on a new demographic: teenagers. The company’s newest efforts are aimed at getting shoppers ages 13 to 17 to purchase items on its site with approval from their parents. Teens can now log into Amazon.com using their own accounts to buy items and stream videos. Their parents, meanwhile, can approve their purchases by text message or set spending limits per order. Analysts say the teenage market could be particularly lucrative for Amazon, as mall staples such as Aeropostale, Wet Seal and rue21 file for bankruptcy protection and shutter hundreds of stores. Many other retailers, such as Claire’s and Abercrombie & Fitch, are also struggling. Story by Abha Bhattarai for The Washington Post

Cash Is Disappearing From These Cities Around The World (But Not The U.S.)
Shoppers in big U.S. cities are clinging to cash and not embracing digital payment systems as fast as consumers in international cities. The most “digitally mature” cities were those with a prevalence of mobile payments, online banking access, ATMs, the ability to receive government benefits digitally, and plenty of shoppers using of plastic debit and credit cards. They include Stockholm, Auckland, Canberra, Copenhagen, Helsinki, London, Ottawa, Sydney and Toronto. Usage of credit and debit cards has grown in the U.S., but many consumers still prefer cash. Although many U.S. cities have the infrastructure to support digital payments, many people have been slower to adopt them. Only about 20% of North American consumers make purchases with mobile payments regularly. Story by Maria LaMagna for MarketWatch

Walmart Unveils Mobile Returns Process for Online Orders
Walmart is changing the way customers return online orders. Starting in November, the store will allow shoppers to process returns through the Walmart app and skip the long customer service lines. To use Mobile Express Returns, a customer will launch the Walmart app on their Apple or Android mobile device. Then, they simply select a transaction and the items from the transaction they want to return. This information will be sent to the store of the customer’s choosing. The service desk will have a new Mobile Express Lane for customers using this service. The customer can go through that line and scan the QR code provided on the card reader. Once the item is handed to the store associate, the refund will be processed. The money will go back to the original payment method for the order (credit card, debit card, PayPal, etc.) in as little as one day. Story by Bill Hardekopf for LowCards.com

JPMorgan Says Customers Are Sticking With Sapphire Reserve Card
JPMorgan Chase said more customers are sticking with its Sapphire Reserve card than the bank initially expected, a year after it debuted with a sign-up bonus worth a whopping $1,500 in travel perks. Attrition rates on the card, which carries a $450 annual fee, are lower than the bank anticipated and the results are “encouraging,” Chief Financial Officer Marianne Lake said Thursday. Spending on all Chase credit cards jumped 13 percent from a year earlier, and card revenue rose 3 percent to $1.24 billion, the company said, without breaking out numbers for the Sapphire line. Story by Jennifer Surane and Hugh Son for Bloomberg

Citi-Costco Partnership Shows Its Strength In Costco’s Earnings Report
The performance of Costco’s product is a testament to why bigger is better for credit cards. When Amex owned the Costco co-brand portfolio, it was strong, posting $80 billion in billed business in its last full year. But it’s doing even better, and seems to be growing more quickly, under Citi – which is of benefit to Costco. That’s likely in part due to the card’s strong rewards proposition – cash-back offerings go as high as 4% for standard purchases, which is higher than those under Amex, and the firm is also running other promotions, like additional rewards on travel and discounts on Samsung purchases, which can incentivize high spending. But it could also be due to Visa’s wide acceptance network, which beats out Amex in the US, and could make it easier for users to turn to the product more regularly. At a time when credit appetite is high and firms are working to attract and engage customers, the scaling success of the Costco portfolio could be a lesson in how subtle changes that simplify and incentivize usage could make a big difference. Story by Jaime Toplin for Business Insider

You Can Now Take Out Cash With Your Smartphone At Some Wells Fargo ATMs
Wells Fargo has upgraded more than 5,000 ATMs with new technology that allows customers to access their accounts–and take out cash–with a smartphone instead of a debit card. The move builds on an earlier one by Wells Fargo that allowed customers to access an ATM simply by generating a special code inside the Wells Fargo smartphone app. The ATMs have a new near-field communications (NFC) module that allows customers to tap a phone configured with Apple Pay, Samsung Pay or Android Pay instead of swiping or inserting a debit card into the machine. Wells Fargo said that customers will still need to enter their PIN into the machine in order to take out money. The feature gives consumers more of a reason to leave their debit and credit cards at home. Story by Todd Haselton for CNBC

Hyatt Hotels Discovers Card Data Breach At 41 Properties
Hyatt Hotels said it had discovered unauthorized access to payment card information at certain Hyatt-managed locations worldwide between March 18, 2017 and July 2, 2017. Hyatt said the incident affected payment card information, such as, cardholder name, card number, expiration date and internal verification code, from cards manually entered or swiped at the front desk of certain Hyatt-managed locations. The owner of Andaz, Park Hyatt and Grand Hyatt chain of hotels said a total of 41 properties were affected in 11 countries, with China accounting for 18 properties, the most among impacted countries. Seven Hyatt properties were affected at U.S. locations, including three in Hawaii, three in Puerto Rico and one in Guam. Story by Ankit Ajmera for Reuters

UK Banks Plan Biggest Squeeze On Consumer Credit Since 2008
British banks are planning the biggest squeeze on consumer credit since late 2008, when the economy was in the depths of recession, according to a Bank of England survey. The clampdown follows warnings that Britain’s debt mountain has risen to dangerous levels as households struggle with rising shop prices and low wage growth. The survey showed the net balance of lenders’ expectations for the availability of unsecured lending to households over the next three months fell from -16.2 to -28.6, indicating the sharpest drop since the fourth quarter of 2008, when the UK economy contracted by 2.2%. Story by Angela Monaghan for The Guardian

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 15.39 percent, identical to last week. Six months ago, the average was 15.25 percent. One year ago, the average was 14.61 percent.


About Lynn Oldshue

Lynn Oldshue has written personal finance stories for LowCards.com for twelve years. She majored in public relations at Mississippi State University.
View all posts by Lynn Oldshue
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