LowCards.com Weekly Credit Card Update–October 17, 2013
JP Morgan Chase Points to Legal Expenses in Quarterly Loss
JP Morgan Chase reported a quarterly loss for the first time ever under CEO Jamie Dimon as the bank spent billions battling lawsuits and dealing with federal investigations into some of its business activities, including the company’s credit card operation. The nation’s largest bank by assets took a one-time charge of $7.2 billion in legal costs, dragging down third-quarter earnings to a loss of $380 million. Chase’s card, auto and merchant services unit, the business line that includes credit cards, recorded a profit of more than $1.2 billion, a nearly 30 percent increase over the same period a year ago. But the unit also had a $91 million dip in revenue before expenses. Credit card income from fees before expenses rose slightly to about $1.08 billion, but interest income fell by $149 million to about $3.3 billion. Story by Wade Malcolm for The News Journal.
The History of the Credit Card
Technology, innovation and social media are bringing changes to credit card payments. Consumers have been slow to adapt to these changes, but that should not come as a shock. History shows that methods of payment change and evolve slowly. Until the 1950s, people paid cash for most products and services. There were a few local attempts at credit cards as some individual stores and gas stations offered charge cards. Now, nearly sixty years later, credit cards are the primary form of payment and are accepted almost anywhere in the world. Here are some important dates and developments in the evolution of credit cards. Story by Sarah Hefner for LowCards.com.
MSNBC Sees 0% Conflict of Interest In Alex Baldwin’s Capital One Gig
Alex Baldwin’s new talk show, “Up Late,” premiered last Friday on MSNBC, but if you watch a lot of television today, you’ll probably have seen the actor a few times already by that point, in his seemingly ubiquitous role as a spokesman for Capital One credit cards. For a television news host to have a sideline as a bank pitchman is unorthodox in the extreme, even for a network like MSNBC, which has been blurring boundaries with great success over the last few years. While news organizations vary widely in their policies, cashing checks from a large corporate entity whose interests are a subject of daily coverage would be a no-no in pretty much any newsroom. And MSNBC’s isn’t just any newsroom. Nominally, at least, it’s governed by the no-nonsense ethics policy of NBC News, although journalists at the parent network often mutter behind their hands at the cable channel’s lax enforcement of standards. Story by Jeff Bercovici for Forbes.
Patients Mired in Costly Credit from Doctors
In dentists’ and doctors’ offices, hearing aid centers and pain clinics, American health care is forging a lucrative alliance with American finance. A growing number of health care professionals are urging patients to pay for treatment not covered by their insurance plans with credit cards and lines of credit that can be arranged quickly in the provider’s office. They are now proliferating among older Americans, who often face large out-of-pocket expenses for basic care that is not covered by Medicare or private insurance. Doctors, dentists and others have a financial incentive to recommend the financing because it encourages patients to opt for procedures and products that they might otherwise forgo because they are not covered by insurance. It also ensures that providers are paid upfront–a fact that financial services companies promote in marketing material to providers. Story by Jessica Silver-Greenberg for the New York Times.
Showrooming Up 156%
Brick and mortar businesses are feeling the sting of showrooming. This practice, where shoppers in a retail store use their mobile devices to check prices and buy elsewhere, has increased 156% over the past year. The survey of 1,000 smartphone owners found this practice to be widespread because of the relative ease of making price comparisons on mobile devices when in a store. 44% of the respondents showroom regularly. In addition, half the consumers in the survey use their devices to look up product reviews, a substantial increase from 31% a year ago. Of the consumers that do showroom, 47% complete the transaction while in the store. Another 45% go to another location to complete the transaction. This practice is widespread because of the relative ease of making price comparisons on mobile devices when in a store. Story by Bill Hardekopf for LowCards.com.
Juggling Your Bills When Your Paycheck Goes on Furlough
Furloughed federal employees, contractors and others affected by the government showdown are facing tough financial decisions. Since they are going to miss a paycheck–or two or three–many of them are placing calls to creditors asking for help in deferring or lowering payments on mortgages, credit cards and other loans. They need to decide which bills to pay and when. The good news is that many lenders say they will work with federal employees to keep mortgages, credit cards and other debts in good standing. These are 5 steps to keeping your finances afloat while dealing with a gap in income. Story by Aliah Git for CBS News.
CFPB Provides Guidance on Mortgage Servicing Rules
The Consumer Financial Protection Bureau is releasing a bulletin and interim final rule to provide greater clarity to the market concerning mortgage servicing rules that take effect in January 2014. The clarifications address communications with family members after a borrower dies, contact with delinquent borrowers, and treatment of consumers who have filed for bankruptcy or invoked certain protections under the Fair Debt Collection Practices Act. Mortgage servicers are responsible for collecting payments from mortgage borrowers on behalf of loan owners. Generally, borrowers have no say in choosing their mortgage servicers. Today, many borrowers continue to experience serious problems seeking loan modifications or other alternatives to avoid foreclosure. In January 2013, the CFPB issued rules to establish new, strong protections for struggling homeowners, including those facing foreclosure. The rules protect mortgage borrowers from costly surprises and runarounds by their servicers. Story by the Consumer Financial Protection Bureau.
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 14.43 percent, slightly higher than last week’s 14.40 percent. Six months ago, the average was 14.26 percent. One year ago, the average was 14.28 percent.