LowCards Weekly Credit Card Update December 29
CREDIT CARDS SPENDING INCREASED OVER THE HOLIDAYS
In a turnaround from last year, shoppers were not afraid to pull out the plastic this holiday season. Spending on credit cards jumped 7 percent in November and was up in the first half of December, according to First Data, a company that tracks consumer payment data. The move back to credit is part of a strategy this year by credit card companies to get people spending on high-interest plastic, and also reflects buoyed consumer confidence. While the increased spending boosts a hurting economy, it also poses risks for shoppers.
Story by Catherine New for the Huffington Post
DEBTS GO BAD–THEN IT GETS WORSE
A personal bankruptcy is supposed to cut borrowers loose from lenders and debt collectors, but Capital One Financial Corporation, one of the nation’s largest credit card issuers, sometimes doesn’t want to let go. A court appointed auditor concluded earlier this year that Capital One pursued 15,500 “erroneous claims” seeking money previously erased by a bankruptcy-court judge. More than 800 of those borrowers have filed lawsuits or other legal actions against Capital One, the auditor said in a Dec. 6 court filing. Without admitting or denying wrongdoing, Capital One agreed to reimburse about 130 borrowers, lawyers and bankruptcy trustees for legal costs incurred trying to fend off Capital One. Debt collection is a major component of Capital One’s business that gets little attention from analysts and investors. As of Sept. 30, Capital One had $2.7 billion in net income so far this year on revenue of $12.22 billion, but it also was forced to write off $2.9 billion in uncollectible loans. As a result, like most lenders, Capital One invests significant resources into trying to collect from customers who are behind on their bills. But unlike most others who outsource their debt collection, Capital One largely relies on employees.
Story by Jessica-Silver Greenberg for the Wall Street Journal
GIFT CARDS: USE THEM BEFORE YOU LOSE THEM
The holiday presents have been unwrapped and most of us received at least one gift card. Now is the time to shop with these cards while they are still fresh in our hands. The National Retail Federation predicts that 80% of
people have purchased gift cards this holiday season . Total holiday spending on gift cards in 2011 will reach $27.8 billion. That number grows each year because gift cards are the easiest present to give, saving time and shopping stress for the giver. Surprisingly, it is also a present that goes unused. Last year, 113 million Americans received gift cards during the holidays, but at the start of the 2011 holiday shopping season, a quarter of recipients still had an unused gift card from last year (Consumer Reports).
ANONYMOUS CLAIMS HACK OF DATA FROM SECURITY GROUP
Members of the loose-knit movement “Anonymous” claimed to have stolen a raft of emails and credit card data from U.S.-based security think tank Stratfor, promising it was just the start of a weeklong, Christmas-inspired assault on a long list of targets. One alleged Anonymous affiliate said the goal was to use the credit data to take a million dollars–including, apparently, from individuals’ accounts–and give the money away as Christmas donations. Images posted online claimed to show the receipts. A Twitter account tied to Anonymous posted a link to what they said was Stratfor’s tightly guarded, confidential client list. Among those on the list: The U.S. Army, the U.S. Air Force and the Miami Police Department.
Story by the Associated Press
FOUR WAYS TO START YOUR KIDS WITH CREDIT
Mired in debt, many adults do not feel qualified to teach their kids about credit. That’s one reason they want it done in a classroom. But since that won’t happen anytime soon, at least not a broad scale, they’d better get over their fear of finance and share some credit card wisdom with the kids. This is a great time of year for that talk. College students are home for the holidays and the temptation to spend is at a peak. There are four basic routes to introduce your kids to credit cards while minimizing risks.
Story by Dan Kadlec for Time
THE TOP 10 CREDIT AND DEBIT CARD STORIES OF 2011
This past year was a very eventful one in the debit and credit card industry. Here is a review of the top ten stories of 2011.
VERIZON WIRELESS: YEP, THAT’LL BE $2 TO PAY YOUR BILL ONLINE
Verizon Wireless plans to charge subscribers a new $2 fee every time they pay their wireless bills online or directly over the phone. The new fee will go into effect starting January 15 and doesn’t apply to customers paying
their bills with an electronic check or who enroll in autopay using a credit, debit, or AT&T cards. Verizon said that customers making single payments online will be notified of the fee before they complete their transactions. The fee associated with paying your bill online is part of a larger trend by companies to extract more money from customers to access certain forms of payment
Story by Marguerite Reardon for CNET
LOWCARDS.COM WEEKLY CREDIT CARD RATE REPORT
Based on the 1000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.00 percent, identical to last week. Six months ago, the average was 13.95 percent. One year ago, the average was 13.79 percent.