LowCards.com Weekly Credit Card Update–October 17, 2014
Kmart Says its Store Registers Were Hacked, Exposing Credit Cards
For about a month, Kmart says, its stores’ checkout registers were “compromised by malicious software that stole customer credit and debit card information.” The company, owned by Sears, says it removed the malware from its system after it was discovered. It announced the exposure late Friday, saying that no personal data or PIN numbers were lost. While some important customer information seems to have been protected, the breach could still allow criminals to make counterfeit versions of the exposed credit cards. Story by Bill Chappell for MPR News.
Apple’s Credit Card Killer Launches Monday
Get ready to tap your iPhone 6 or iPhone 6 Plus everywhere to pay for groceries or that burger in the McDonald’s drive-thru. Apple CEO Tim Cook announced Thursday that Apple Pay–the company’s mobile payments system–will launch on Monday. With Apple Pay, Apple and merchants don’t see or store any of your private information. Instead, users take a photo of their credit card and add it to their phone’s Passbook, where it is assigned an unique device account number, encrypted and stored in the phone’s Secure Element Chip. When it’s time to make a purchase, the device account number and a dynamic security code are used to complete the transaction. Apple will never know what you purchased, the company said, and you’ll still get rewards points on the credit cards you use. Story by Alyssa Newcomb for ABC News.
U.S. Banks Ramp Up Credit Card Lending But Margins May Suffer
As traditional Wall Street moneymakers like stock and bond trading suffer, banks are growing increasingly willing to invest in less glamorous operations: their credit card businesses. JPMorgan Chase, Citigroup and other big banks are making more credit card loans, after years of focusing mainly on customers who paid off their balances each month. Lenders hope that in an era when consumers are conducting more of their banking online and less in branches, an increased emphasis on credit cards will help them sell more products to their customers. Story by David Henry for Reuters.
The Holidays Bring a New Season for Credit Card Breaches
The holiday season is approaching, a time for sales and Santa and, now, credit card data breaches. Though cyber thieves have stolen millions of card numbers this year, shoppers are heading into the heavy-spending season with no new credit safeguards in place. Story by Charles Lane for NPR.
Credit Card Issuers are Charging Higher
The U.S. credit card industry has found its sweet spot: a combination of moderate economic growth, low interest rates and consumers who have struck a balance between spending more and paying their bills on time. The trends are expected to drive profits to post recession highs at industry giants American Express and Capital One this year and bolster the bottom line at banks with big card units, including J.P. Morgan Chase. U.S. card issuers will generate $158.6 billion in revenue this year, a 9% increase from 2013, according to estimates from R.K. Hammer. It would be the first annual gain since 2008. Story by Robin Sidel for The Wall Street Journal.
Did the Durbin Amendment Make a Difference?
The Durbin Amendment contained a provision that limited the interchange fees merchants paid for debit card transactions. The thought was that retailers would lower their prices if these high swipe fees were decreased. But on the third anniversary of this Amendment, the Electronic Payments Coalition issued results of a survey which showed consumers have not seen any price declines as a result of the cap. Furthermore, the Coalition found 16% of consumers experienced retailers imposing surcharges for debit card purchases, even with the cap in place. Story by Bill Hardekopf for LowCards.com.
Wells Fargo Charges Into Credit Cards
Wells Fargo is taking a swipe at the credit card business. The San Francisco bank, which previously hadn’t focused much on credit cards, is trying to play catch-up as the economy gains speed, interest rates remain low and delinquency rates are at seven-year lows. Wells Fargo is the nation’s seventh-largest credit card issuer, even though it has the largest bank branch network in the U.S. and is a top lender in commercial real estate, mortgage production, small business and auto lending. Story by Emily Glazer and Robin Sidel for The Wall Street Journal.
The Most Serious Threat When Using Credit: You
But this is also a good time to remind ourselves that we often worry too much about the wrong things. The biggest threat to our financial lives is probably not that thieves will get their hands on our payment card information. Instead, we should concern ourselves with the way we quietly chip away at our own net worth by using credit cards too much in the first place. A handful of academic researchers have studied what goes on inside our heads when credit cards are in our wallets, and even people who do not carry a balance each month are prone to overspending for a variety of reasons. Story by Ron Lieber for The New York Times.
In Lending Circles, A Roundabout Way to Higher Credit Scores
While informal lending circles among families, acquaintances, co-workers and neighbors are familiar to hundreds of millions of people all over the globe, they are rarely recognized by mainstream financial institutions. But now these centuries-old networks are being seen as a promising tool to help low-income Americans build credit records, part of a new frontier of the war on poverty that has attracted a crazy-quilt coalition of supporters that include major banks, immigrant activists and academic researchers. In August, California became the first state to enact a law allowing nonprofits to offer small no-interest, no-fee loans, attracting unanimous support from Republican and Democratic lawmakers. Story by Patricia Cohen for The New York Times.
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 14.57 percent, slightly higher than last week’s average of 14.56 percent. Six months ago, the average was 14.26 percent. One year ago, the average was 14.43 percent.