LowCards Weekly Credit Card Update November 11
CREDIT UNIONS POACH CLIENTS
Thousands of people flooded into credit unions and small banks over the weekend as part of “Bank Transfer Day,” an effort to prod depositors to abandon giant banks. But at least some of the big banks won’t mind losing those customers. On Saturday, the Boeing Employees’ Credit Union in Seattle signed up a one-day record 659 new members. At the grand opening of a Randolph-Brooks Federal Credit Union branch in Pflugerville, Texas, the parking lot was so full that customers had to leave their cars across the street. Executives at large banks have shown few signs of worry that depositors might walk out the door. One reason: people who gravitate to credit unions tend to be unprofitable for giant banks because of the small balances they keep on deposit, low number of products they buy and the relatively high account-maintenance expenses at big financial firms.
Story by Suzanne Kapner for The Wall Street Journal
STUDENT DEBT GROWS TO MORE THAN $25,000 FOR RECENT GRADS
The class of 2010′s college graduates owed an average of $25,250 in student loans, up five percent from 2009, according to a new report from the Project on Student Debt. College seniors who graduated with student loans last May also faced the highest unemployment levels–9.1 percent–in recent history for new college graduates, according to the report. In the report’s survey data, 73 colleges reported that more than 90 percent of their class of 2010 graduated with debt. A total of 98 colleges reported that their graduates actually owed an average of more than $35,000.
Story by Maggie Shader for Consumer Reports
USING REWARD CREDIT CARDS FOR HOLIDAY SEASON
Throughout 2011, credit card issuers have sweetened reward card offers to attract more consumers. Since most consumers spend so much additional money during the holidays, this is a great time to take advantage of these offers and quickly earn some extra cash or miles. Here are six tips for using reward credit cards to maximize your holiday shopping and the best rewards for the holiday season.
DURBIN’S MESSAGE TO BANKS: I WON’T BACK DOWN
U.S. Sen. Dick Durbin called on the nation’s banks Sunday to each publish a one-page listing of the fees and terms of their checking accounts, a move he says will protect consumers from paying hidden fees. Durbin said after the plans of many large banks to charge debit card users monthly fees backfired, banks could start tacking on charges people may never be aware of. Durbin said 650,000 people across the country moved their checking accounts from the big bank chains to community banks or credit unions in response to the proposed monthly fee. “Bank of America thought they could make me the villain, and it blew up in their face,” he said. “I’m ready for this battle.”
Story by Jason Nevel for the State Journal Register
NEXT FRONTIER IN CREDIT SCORES: PREDICTING PERSONAL BEHAVIOR
Fair Isaac, the company that created the FICO credit score, is branching into new territory, assembling disparate data in an effort to better understand a range of human behaviors. Fair Isaac’s partners and
sometimes-rivals at the nation’s credit bureaus also are delving deeper into consumers’ financial histories to generate tailored scores, which influence where a person can live and work and how much they have to pay for insurance. Rival credit reporter Equifax Inc. offers an Ability to Pay Index and a Discretionary Spending Index that purports to indicate whether people have extra money burning a hole in their pocket. Scoring-company executives say their products are fairer and more consistent than the subjective judgments they often replace. Use of credit-related data is regulated by a federal law that gives people the right to see and correct information about them. But those provisions may not apply to some new products.
Story by Scott Thurm for The Wall Street Journal
HIGH BANK FEES GIVE WAL-MART A MONEY AISLE
Americans say they are fed up with banks. They are protesting on Wall Street and raising a ruckus over outsize fees. Now there is a surprising beneficiary: Wal-Mart. Customers can cash work and government checks, pay bills, wire money overseas or load money on to a prepaid debit card. At most Wal-Marts without dedicated Money Centers, the financial services are available at the customer service desks or kiosks. Four years ago, Wal-Mart abandoned its plans to obtain a long-sought federal bank charter amid opposition from the banking industry and lawmakers, who feared the huge retailer would drive small bankers out of business and potentially conflate its banking and retail operations. Ever since, Wal-Mart has been quietly building up à la carte financial services, becoming a force among the unbanked and “unhappily banked,” as one Wal-Mart executive put it.
Story by Stephanie Clifford and Andrew Martin for the New York Times
AMEX LOOKS TO STAKE CLAIM IN PLASTIC-FREE FUTURE
American Express Co., looking to transform beyond a company that mainly lends to consumers via its credit cards and processes transactions into a major player in e-commerce, plans to invest $100 million in early stage start-ups in the digital commerce industry. The multiyear initiative is aimed and pushing new ways for customers to use its cards on mobile devices and online, growing fields being targeted by companies including Google, Visa and MasterCard. The company, which has traditionally lent to affluent customers, said it is looking to invest in companies focused on serving critical parts of the digital commerce experience, including loyalty and rewards, mobile and online payment management, fee-based services, security and fraud detection and data analysis.
Story by Andrew Johnson and Melodie Warner for The Wall Street Journal