Weekly Credit Card Update July 9, 2010
CREDIT CARD HACKERS VISIT HOTELS ALL TOO OFTEN
Hotels are a favorite target of hackers. A study released this year by
SpiderLabs, a part of the data-security consulting company Trustwave, found that 38 percent of the credit card hacking cases last year involved the hotel industry. The sector was well ahead of the financial services industry (19 percent), retailing (14 percent), and restaurants and bars (13 percent). It often takes months for these attacks to be discovered by hotels–and by customers who may be on the road frequently and not monitoring card activity reports carefully. Fraud experts say that hackers often steal personal data and make multiple small charges to validate a card, probe its vulnerability and test the vigilance of a cardholder before making bigger charges. Meanwhile, credit card companies are pressuring merchants, including hotels, to adopt uniform security standards.
Story by Joe Sharkey for the New York Times.
CREDIT CARD DEBT HITTING LATINOS HARDEST
A study by the NAACP showed 79 percent of Latino households carry credit card debt, compared with 54 percent of white households. And when it comes to the interest on those cards, Latinos pay a much higher rate.
Story by Tess Vigeland for NPR.
COULD WALK AWAY STIMULUS BE WANING?
In a new report released this week, credit firm Experian and consultancy
Oliver Wyman estimate that about 355,000 homeowners strategically defaulted in the first half of 2009–meaning they stopped paying their mortgages but stayed current on other debts, such as credit cards and auto loans. That was up 58% from the same period in 2008. Most of those defaults happened in housing-bust states such as California and Florida, where cheap rentals are easy to find, so it’s safe to assume that the defaulters, on average, achieved steep cuts in their monthly housing costs–effectively giving themselves a raise.
Story by Mark Whitehouse for the Wall Street Journal.
CONSUMER TIPS ON NEW FED OVERDRAFT RULES
If you have a checking account, you now have a choice to make about
overdraft protection. New Federal Reserve rules require banks to receive
permission from each checking account customer before the bank provides overdraft protection for ATM and debit card transactions. The change started July 1 for new customers and takes effect on Aug. 13 for existing customers. The rules do not cover checks or automatic bill payments–banks can still authorize and pay overdrafts for these transactions at their discretion and
charge a fee.
THE FED AND YOUR CREDIT CARD
The Fed dropped the ball completely when it refused to regulate penalty
interest charges. Card issuers will still be able to double or even triple
the interest rate if the cardholder falls two months behind in payments.
Congress clearly intended the Fed to regulate penalty interest charges, too,
as they can quickly get people in over their heads. Falling back into its
old habit of putting credit card companies first, it declined to, arguing
that the “reasonable and proportional” provision of the statute does not expressly mention these rates. Congress should amend the credit card law so that it specifically requires regulation of penalty interest rates. That may be the only way to get the holders of credit cards the full protections Congress intended and they so clearly need.
TWO-MONTH WARNING FOR NFL CREDIT CARD HOLDERS
The National Football League’s decision to move its branded credit card business from Bank of America to British banker Barclays is forcing
customers to scramble to spend reward points before they expire next month. Barclays is still setting up its points program. It signed a multiyear deal, for which analysts said it likely paid the NFL millions of dollars. The
company bought only the rights to market the cards, not the existing
accounts, so it will have to convert cardholders. Cardholders who don’t
switch will have the same accounts with Bank of America but no ability to
earn points to be redeemed on jerseys, tickets and other NFL merchandise.
Story by Emily Fredrix for the Associated Press.
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 this week increased to 13.64%, up from 13.63% last week. Six months ago, the average was 13.25%. One year ago, the average was 12.10%.
CREDIT CARD DELINQUENCIES FALL TO EIGHT-YEAR LOW
Americans are not as far behind on their bills as a year ago. The number of consumers behind on their credit card payments fell to an eight-year low in the first quarter of 2010, the American Bankers Association said Wednesday. Overall, delinquencies across a wide-range of consumer debt categories have also fallen. About 3.88% of bank credit card accounts were past due by 30 days or more in the first quarter of the year–the first time since 2002 that the rate has fallen below 4%.
Story by Annalyn Censky for CNNMoney.
ASIA-PACIFIC REGION EMBRACES
USE OF CREDIT AND DEBIT CARDS
The credit and debit card revolution is spreading across Asia. Asia’s
growing appetite for credit and debit is the start of a powerful shift in
how consumers here are thinking about spending. The development is
particularly meaningful considering the region’s historical aversion to
debt, and is likely to have indelible consequences on nations’ growth. While cash and checks remain the most popular forms of payment, that’s quickly changing amid rising income levels, aggressive financial marketing and a push by Asian governments that see credit cards and other electronic
payments as a good way to grow the economy. New technologies
such as cellphone and contactless payments – in which you pass your
card over an electronic reader rather than swipe it – promise to speed
up Asian consumers’ adoption of debit, credit and even prepaid cards,
which allow money to be loaded for purchases.
Story by Kathy Chu for USA Today.