Weekly Credit Card Update for April 23, 2010
LOWCARDS.COM WEEKLY CREDIT CARD UPDATE
A summary of this week’s top credit card stories.
Contact: Bill Hardekopf, [email protected]
AS LOSSES SLOW, BIG BANKS EYE PROFITS IN Q1
Losses from consumer loans may finally be slowing for big banks. A
recovering stock market and low interest rates are allowing the lenders to
borrow cheaply and profit from higher-yielding investments. Analysts say
this rebound may not boost lending. Banks are cautious to lend while
borrowers are hesitant to add to their debt burdens. Delinquencies for
consumer loans have slowed in the past year as people paid down debt and
banks reduced credit lines.
Story by Stevenson Jacobs for the AP
AMEX EARNINGS DOUBLE
American Express reported first-quarter profits that more than doubled over
last year, as consumers slowly revved up their spending and paid more of
their bills. The company cited an overall boost in cardmember spending, as
well as big turnarounds in spending from corporate cardmembers and banks
that issue cards on the AmEx network, as factors driving the strong results.
The number of cardmembers who were delinquent on their payments by
30 days or more was down to 3.3%, from 5.1% of all cardmembers last year.
Story by Annalyn Censky for CNN.
CHARLES SCHWAB STOPS OFFERING
2% CASH REBATE CREDIT CARDS
The company is not accepting new applications for the card, though the
company isn’t currently making any changes to the rewards structure for
existing cardholders. So dangling a fat refund in front of customers only
makes sense if lots of people are signing up for new brokerage accounts and
filling them with money to qualify for the 2% card. Schwab would only
deposit the cash rebates earned on the card in a Schwab brokerage account.
And apparently, there wasn’t enough of that new account sign-up behavior
Story by Ron Lieber for the New York Times
CREDIT CARD TIPS FOR THE INTERNATIONAL TRAVELER
Most people visiting a foreign country don’t realize their credit card
company can add as much as 3% in international transaction fees to the cost
of a purchase. But there are some issuers that do not charge this fee. When
visiting a foreign country, travelers are advised to notify your issuer
about your pending visit, avoid using your credit card at a foreign ATM to
get cash, and possibly take a second credit card.
WHICH CARDS OFFER THE BEST BENEFITS?
Built-in cardholder perks vary from issuer to issuer, and an explanation of
benefits to customers also varies in visibility, new research from Corporate
Insight shows. The “Built-In Card Benefits” Report gave the highest grade,
to American Express for its comprehensive benefits package and
communication of benefits to cardholders. User benefits include extended
warranties, purchase protection against loss, damage or theft of items
within 90 days after their purchase and identity theft assistance.
Story by Leslie McFadden for Bankrate.
TARGET SWAPS CREDIT CARDS
Target Corp. will stop issuing Visa credit cards to its shoppers and will
instead offer new cardholders access to the company’s proprietary credit
card, the retailer known for its cheap-chic designs said Tuesday. The
change, which takes effect next Thursday, won’t affect current Target Visa
card holders. That group makes up about 70% of the retailer’s total credit
card holders. Target said its research shows that shoppers who use the
in-house credit cards, which it began issuing in 1995, tended to spend more
money than those with the Visa cards.
CAPITAL ONE CREDIT CARD DEFAULTS RISE IN MARCH
Capital One Financial Corp’s U.S. credit card defaults rose in March
in a sign that consumers may still be under stress. In a regulatory filing,
Capital One said the annualized net charge-off rate–debts the company
believes it will never collect–for U.S. credit cards rose to 10.87% in
March from 10.19% in February. However, accounts at least 30 days
delinquent–an indicator of future loan losses–declined to 5.30% from
Story by Brenton Cordeiro for Reuters.