LowCards.com Weekly Credit Card Update–September 19, 2014
Millions of Americans’ Wages Seized over Credit Card and Medical Debt
Millions of Americans are still grappling with debt they’ve accumulated since the recession hit. And new numbers out show many are having a tougher time than you might think. One in 10 working Americans between the ages of 35 and 44 are getting their wages garnished. That means their pay is being docked—often over an old credit card debt, medical bill or student loan. Story by Chris Arnold and Paul Kiel for NPR.
Student Loan Debt Burdens More Than Just Young People
An estimated two million Americans age 60 and older are in debt from unpaid student loans, according to data from the Federal Reserve Bank of New York. Its August “Household Debt and Credit Report” said the number of aging Americans with outstanding student loans had almost tripled from about 700,000 in 2005, whether from long-ago loans for their own educations or more recent borrowing to pay for college degrees for family members. The debt among older people is up substantially, to $43 billion from $8 billion in 2005, which is based on data from Equifax. As of July 31, money was being deducted from Social Security payments to almost 140,000 individuals to pay down their outstanding student loans, according to Treasury Department data. That is up from just under 38,000 people in 2004. Story by Elizabeth Olson for The New York Times.
JP Morgan Chase Replaces Some Credit Cards After Home Depot Breach
JPMorgan Chase is replacing some credit and debit cards following the security breach at Home Depot Inc. The company began sending notices on Tuesday to some card holders, advising them that they will soon receive new cards because the breach put them “at risk.” One of the notices said the company would mail a new card on Sept. 30. The existing card can be used in the meantime, but the notice advised monitoring the account for unrecognized purchases. Story by David Henry for Reuters.
Fed Revises Plan on How it Will Raise Rates
The Federal Reserve announced a revised plan for the mechanics of how it will raise interest rates from near zero when the time comes. As part of the so-called exit strategy, the Fed will continue to rely on its benchmark federal funds rate, an overnight interbank lending rate, as the key rate used to communicate Fed policy. The rate influences other borrowing costs throughout the economy, such as those on mortgages, car loans and credit cards. Raising it tightens credit: lowering does the reverse. But the primary tool for moving the fed funds rate will be the interest rate the Fed pays on the money, called excess reserves, that banks deposit at the central bank. Story by Michael S. Derby for The Wall Street Journal.
Credit Card Debt Reaches Post Recession High
New credit card debt in America hit a post-recession high in the second quarter of 2014, reaching a total of $28.2 billion, according to a new study. That is the largest amount of debt since the economic downturn and almost 200% more than the second quarter of 2009. This new debt comes as somewhat of a surprise since Americans just paid off $32.5 billion of credit card debt during the first quarter of 2014. Now, consumers have charged 86% more money in the second quarter, with the average household credit card debt near $6,800. This is still lower than the $8,431 average at the end of 2008, but experts expect it to reach $7,000 by the end of the year. Story by John Oldshue for LowCards.com.
What You Need to Know About the Future of Paying for Stuff
Google has Google Wallet; Visa has payWave; MasterCard has PayPass; and American Express has ExpressPay. Apple just announced its own, with Apple Pay. If you’ve heard of any of these credit card services other than Apple’s recently announced system and maybe Google’s long-running program, we’re impressed. You’re in the minority; heck, one quarter of US citizens don’t even own a standard credit card, let alone a virtualized one. But virtual payments are more prevalent by the year, and Apple Pay is giving the concept a much-needed publicity boost. So, all that said, let’s talk about the future of payment. Don’t throw away your wallet just yet. Story by Ben Gilbert for Engadget.
Costco Stores in Canada to Stop Taking American Express
Costco, the largest U.S. warehouse-club chain, will stop accepting all American Express cards in Canada on Jan. 1 after a breakdown in negotiations between the two companies. AmEx, the biggest U.S. credit card issuer by purchases, was the only credit card accepted at Costco stores, and has worked with the warehouse-club chain to issue co-branded cards. U.S. stores will continue to accept AmEx, with the exception of TrueEarnings and American Express Platinum Cash Rebate cards issued in Canada. Story by Dan Reichl and Elizabeth Dexheimer 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 14.51 percent, slightly higher than last week’s average of 14.46 percent. Six months ago, the average was 14.47 percent. One year ago, the average was 14.39 percent.