LowCards.com Weekly Credit Card Update–October 25, 2013

LowCards.com Weekly Credit Card Update–October 25, 2013

October 25, 2013         Written By Lynn Oldshue

Russian Credit Card Firm Jumps After IPO
The initial public offering for Oleg Tinkov’s credit card company in Russion raised $1.1 billion, valuing the company at about $3.2 billion. Mr. Tinkov said he got the idea for the credit card business after receiving a direct mail advertisement from Capital One while visiting San Francisco. Future growth will be slowed by the need to repay previous loans. The interest rates for purchases on Tinkoff credit cards in Russia range from 24.9 percent to 45.9 percent. Story by Andrew Kramer for The New York Times.

Credit Card Tips After Losing Your Job
Unfortunately, job loss has become a reality for millions of Americans. Your income may end but your expenses do not. There is no magic wand to make the bills or the bill collectors disappear, but there are some smart financial steps you can take regarding your credit card such as contacting the credit card company immediately. Let them know that you have lost your job, and see if they offer any type of relief. They will probably be more willing to work with you if they are notified before they spot a problem. Story by Bill Hardekopf for LowCards.com.

Madoff Had No Rules for Credit Card Use, Jury Told
Bernard Madoff was generous to his employees and didn’t have policies in place for corporate credit cards used by executives. They paid for family vacations and thousands of dollars worth of wine, tens of thousands of dollars for shopping trips to Barneys, airfare to Saint Martin and country club memberships. Story by Erik Larson for Bloomberg.

Record Pact is on the Table, but JP Morgan Faces Fight
JP Morgan & Chase reached a tentative deal to pay $13 billion to end a number of civil investigations into its sale of mortgage securities before the 2008 financial crisis, but a separate and potentially more serious criminal probe into the bank and its executives will continue. The Justice Department rebuffed repeated attempts by J.P. Morgan to settle the criminal investigation without admitting wrongdoing and agreed only to resolve the civil investigations. Story by Devlin Barrett, Dan Fitzpatrick and Scott Patterson for the Wall Street Journal.

Student Loan Borrowers Face Payment Pitfalls
A new report from the Consumer Financial Protection Bureau finds that it is not simple to pay off a student loan. Loan servicers, the companies hired by lenders to collect payment for private loans, don’t always act in the borrowers’ best interests, and sometimes taking actions that increase the total cost of higher education. The CFPB found that loan servicers frequently divide the payment or overpayment and apply it to all the person’s outstanding loans. According to the report, these “payment processing pitfalls” can lead to increased costs, prolonged repayments and harm to a borrower’s credit profile. Story by Herb Weisman for CNBC.

Credit Cards Under Pressure to Police Online Expression
Earlier this month, major credit card processors including MasterCard, Visa and American Express announced they would stop processing payments to websites that collect and publish mug shots online. Critics call that business model extortion, and after an expose in the New York Times, credit card companies announced they wanted no part of it. Credit card companies are being increasingly asked to act as the cops and regulators of online commerce and expression. The credit card companies make money from every transaction they process. So, if MasterCard processes a donation to a hate group, it profits. Story by Steve Henn for NPR.

High-Class Pawnshops Fill Lending Void
High-end pawnshops are a small but fast-expanding part of the shadow-lending system. Alternative lenders have helped fill the void as commercial banks cut lending to small businesses. In some states, collateral lenders can charge interest rates exceeding 200% annually because the business isn’t bound by traditional banking laws. The attraction for borrowers is avoiding a credit check and there is little paperwork. So some entrepreneurs are hauling treasured possessions to bankroll businesses historically financed by conventional loans, credit cards or not at all. Story by Ianthe Jeanne Dugan for The Wall Street Journal.

CFPB Says Committed to Stiff Penalties
Richard Cordray, director of the Consumer Financial Protection Bureau, said his agency is committed to going after individuals, not just companies, when it punishes wrongdoers, reflecting a broader effort among enforcement officials to ensure penalties have real bite. He said that the agency also is seeking admissions of wrongdoing from bad actors who commit egregious violations. Story by Emily Stephenson for Reuters.

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 14.44 percent, slightly higher than last week’s 14.43 percent. Six months ago, the average was 14.24 percent. One year ago, the average was 14.26 percent.

The information contained within this article was accurate as of October 25, 2013. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


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