LowCards.com Weekly Credit Card Update–October 23, 2015
Will Retail Shops be the New Bank Branches?
There are a variety of visions for what the bank of the future should be—a coffee shop, a digital destination accessible mainly from a smartphone—but for the good folks over at Number26, the bank of the future basically isn’t a bank at all. It’s a store. For the last several years, the German startup has been trying to reconfigure the European banking experience for the better. Its latest approach involves partnering with retailers to turn shops into dual-purpose banking hubs. The newly conceived physical solution is rolling out across Germany today as part of a partnership with Barzahlen. For German shoppers, that means that 3,000 drugstores, grocery stores and other retail chains dotting the German landscape will be available for customers who want to make deposits or withdrawals. The taking money out part is not much of a value proposition–any MasterCard ATM allows Number26 account holders to grab cash–but depositing locations are a new service. Story by PYMNTS.
Your Social Media Posts May Soon Affect Your Credit Score
There’s a new reason to be careful when updating your Facebook status. Talking about a weekend of debauchery might lower your credit score. The Fair Isaac Corporation, a credit rating agency, is implementing new strategies for assessing a consumer’s creditworthiness. In addition to looking at the information offered on social networking sites, the agency will also be looking at smartphone records. “If you look at how many times a person says ‘wasted’ in their profile, it has some value in predicting whether they’re going to repay their debt,” said FICO CEO Will Lansing. Story by Bill Hardekopf for LowCards.com.
Aging Credit Card Tech Could Cost Local Businesses
Businesses without credit card readers capable of processing new chip card technology are now on the hook for the cost of fraudulent credit card purchases, according to the Better Business Bureau. The liability shift, which transfers the cost from the banks to the merchants, went into effect on Oct. 1, according to a statement from the BBB. The agency said 70 percent of credit cards and 40 percent of debit cards in the United States are expected to be EuroPay MasterCard Visa (EMV) cards, otherwise known as chip cards, by the end of this year. Data on EMV credit and debit cards is stored in a chip embedded in the card instead of on a magnetic stripe, and EMV card readers require cards to be inserted or “dipped” into the machine rather than swiped. Story by Lee V. Gaines for the Pioneer Press.
How Credit Card Companies Target the Rich and the Poor
If you want to know what credit card companies think of you, look at your mail. Are you “pre-screened” for lots of mileage-reward cards? Banks think you’re rich and educated. Do you mostly see offers for low-APR teaser rates? Banks think you’re poor and uneducated – and, perhaps, vulnerable to financial traps. To get ahead in a highly competitive industry, credit card companies have become increasingly sophisticated–and specific—about soliciting new customers. They have also learned to be savvy about wringing profits from their cardholders, even if that means taking advantage of people’s behavioral weaknesses. Companies target their cards to maximize profits off different kinds of customers. Story by Jeff Guo for The Washington Post.
Users Want More Security Before They Switch to Mobile Payments
Awareness and knowledge about mobile payments are increasing rapidly but usage is relatively stagnant. Accenture surveyed 4,000 smartphone users in the United States and Canada, and found knowledge about mobile payments jumped to 52%, a substantial increase from 42% a year ago. But only 18% of consumers in North America are using mobile payments, only a 1% increase from the previous year. Millennials and high-income consumers are adopting mobile payments more quickly than other groups. 38% of those who make at least $150,000 a year are using mobile payments each week. 23% of Millennials, people between the ages of 18 and 34, are using this payment type at least once a week. For other age groups, the rate is only 18%. Story by Lynn Oldshue for LowCards.com.
Frozen Accounts Plague RushCard Prepaid Debit Card Network
Consumers with RushCard prepaid debit cards found themselves unable to access their funds last week because their accounts were frozen after a payment system upgrade went awry, leaving them without means to buy necessities for their families. Prepaid debit cards are often used by people without traditional bank accounts who generally struggle financially. Some RushCard consumers were having their paychecks or Social Security checks deposited directly into their accounts. RushCard’s founder, hip-hop magnate Russell Simmons, has apologized, saying the company is working to restore account access. Story by Virginia C. McGuire for Nerd Wallet.
Target Just Made its Credit Card a Lot Safer
Target is taking a bold step with its store credit cards. The retailer is in the process of reissuing all its REDcard credit and debit cards to chip and PIN cards. This means customers will have to enter a PIN and not just a signature to complete a transaction. Target suffered a massive date breach at the end of 2013, which exposed the personal information of up to 70 million shoppers. The retailer is in the process of sending out millions of new cards, and hopes to complete the process by next spring. The company offers three types of cards: credit and debit cards that are only accepted at Target, and a co-branded card through MasterCard (MA) that can be used outside the retailer. Story by Kathryn Vasel for CNN Money.
American Express Quarterly Results Miss Analysts’ Estimates
American Express reported a 16 percent drop in profits from a year earlier, missing analysts’ estimates, as the credit card company was hurt by higher expenses and remains under pressure from the strong U.S. dollar. The company also cut its full-year forecast. American Express has faced significant challenges all year following the fallout from its announced breakup with Costco, the company’s largest co-branded credit card program, and the strong U.S. dollar, which makes any revenue earned abroad worth less once brought back to the U.S. Story by Ken Sweet for the Associated Press.
Scotiabank Buying Canadian Credit Card Business from JPMorgan
Bank of Nova Scotia has agreed to buy a Canadian credit-card portfolio from JPMorgan Chase & Co., giving Scotiabank an additional two million MasterCard customers. The deal comes after JPMorgan said it would not renew its 10-year agreement with Sears Canada Inc., which is currently associated with the cardholders. The Globe and Mail reported last week that Sears recently warned its cardholders that their store cards would not be valid after Nov. 15. Story by David Berman for The Globe and Mail.
Sony to Pay as Much as $8 Million to Settle Data-Breach Case
Sony Corp. agreed to pay as much as $8 million to settle claims from employees over the theft of their personal information in a computer hack linked to last year’s release of the movie “The Interview.” Sony will pay the current and former employees as much as $4.5 million, with lawyers getting $3.5 million, according to the settlement. U.S. officials have blamed North Korean hackers angered over the Seth Rogen and James Franco comedy for the attack, which was revealed in November. The breach exposed Hollywood secrets, destroyed company data and caused the movie studio to initially cancel the release of “The Interview,” which was about a fictional plot to assassinate North Korea’s leader, Kim Jong-Un. Story by Edvard Pettersson for Bloomberg.
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 14.56 percent, identical to last week. Six months ago, the average was 14.46 percent. One year ago, the average was 14.52 percent.