LowCards Weekly Credit Card Update March 30
Credit Card Rewards Get Richer
Banks and credit card companies are giving out record rewards to people who sign up for their cards as competition for well-heeled customers reaches a fevered pitch. For people with good credit and money to spend, now is a good time to take the leap, experts say. While the offers come with strings attached, such as minimum spending requirements and annual fees that can top $100, experts say the value of the upfront rewards has ballooned recently. The director of financial services for Mintel Comperemedia, which monitors direct-marketing offers, says the new offers, which began in the fourth quarter of 2011, are the best he has seen in the 11 years his firm has been tracking them. Story by Ruth Simon for the Wall Street Journal.
As Card Firms Turn To Social Media, Critics Keep Watch
As credit card companies turn to social-media sites to engage with customers, some consumer advocates worry the virtual may replace the physical pitch on college campuses. Credit card lenders are mining their customers’ “likes” on FaceBook and scouring tweets on Twitter as they look for new ways to entice existing customers to use their cards more frequently and raise their appeal among younger consumers, avid users of social media. But some experts worry these platforms may give lenders another door around rules that took effect two years ago aimed at protecting young consumers. The rules, part of the Credit Card Accountability, Responsibility and Disclosure Act, were meant to curb aggressive tactics by lenders to sign young customers up for credit cards. The provisions limited certain marketing tactics on college campuses and required issuers to consider an applicant’s ability to pay. Story by Andrew Johnson for the Wall Street Journal.
American Express is Building a Culture Around Data, Not Payments
To make a successful digital payments product, American Express is shedding a lot of tradition. In August, the New York credit card network opened a new Manhattan office to nurture its digital wallet, Serve, and to remove the 200 employees devoted to that project from the culture and tradition of its main office. “We are beginning to realize that data is actually more valuable than the payment transaction itself,” says Dan Schulman, Amex’s group president of enterprise growth. “The reason that Google wants to move in with Google Wallet is not because they want to move into payments–what they really want is the data from that transaction.” Serve is designed to follow the payment from the original advertisement to the sale, wherever that sale takes place. Story by Sean Sposito for American Banker.
Credit Bureaus Upsell ID Theft Victims, FTC Report Says
A new report by the Federal Trade Commission slams the nation’s credit bureaus for upselling identity theft prevention services when victims call looking for help. The report found that consumers face frustrating voice mail systems that often make it hard to reach a live operator, are confused about their rights and face unnecessary hurdles fixing credit report errors caused by identity thieves. It also pointedly raises the possibility that the new Consumer Financial Protection Bureau could initiate enforcement actions against the bureaus- Equifax, Experian and TransUnion. Story by Bob Sullivan for MSNBC.
Free Flights Are More Abundant With Credit Card Offers
Summer vacation is just around the corner, and generous credit card reward programs can help you earn a free plane ticket for that upcoming trip. But consumers need to pay attention to the fine print of these credit card offers since many come with higher rates, annual fees and spending requirements. Story by LowCards.com.
American Express is Making its Prepaid Cards Friendlier
American Express is introducing major enhancements to most of its prepaid debit cards, including direct deposit, higher ATM withdrawals thresholds and additional cash loading options. The company also said that it will give prepaid debit cardholders the opportunity to upgrade to a traditional charge card if they exhibit good payment practices as they load and use their card. The program is intended to help consumers with thin or no credit files. Regardless of the specifics, the move clearly delineates Amex’s prepaid card from its competitors since credit bureaus currently do not accept information on prepaid products as no line of credit has been extended. Amex is in a unique position because it can use its prepaid cardholders’ spending record to approve them for a charge card in lieu of an actual credit report. These charge cards, which differ from a traditional credit card in that cardholders cannot carry a balance, will then help customers establish a credit history. Story by Jeanine Skowronski for Mainstreet.com.
Why ID Thieves Love Social Media
U.S. consumers growing use of smartphones for all sorts of personal finance tasks helped contribute to a 13% hike in identity theft in 2011. About 12 million Americans got hit by identity fraud in 2011, thanks to consumers’ growing use of social-media websites and smartphones, plus a sharp jump in security breaches, according to a recent report from Javelin Strategy & Research. Some 7% of smartphone owners became identity-fraud victims in 2011. Smartphone users are about one-third more likely to fall prey to identity fraud than the general public, the report found. Why? Because smartphones are minicomputers that store vast quantities of personal information, yet many users don’t protect their smartphones the way they do laptops and PCs. Story by Jennifer Waters for the Wall Street Journal.
U.S. Agency Seeks Tougher Consumer Privacy Rules
The Federal Trade Commission called on Congress to enact legislation regulating so-called data brokers, which compile and trade a wide range of personal and financial data about millions of consumers from online and offline sources. The legislation would give consumers access to information collected about them and allow them to correct and update such data. The agency also sent a cautionary signal to technology and advertising companies regarding a “Do Not Track” mechanism that allows consumers to opt out of having their online behavior monitored and shared. It warned that if companies did not voluntarily provide a satisfactory Do Not Track option, it would support additional laws that mandate it. Story by Tanzina Vega and Edward Wyatt for the New York Times.
Get a Deal and a Reward Just by Using Your Credit Card
Cartera Commerce will offer a new service for small businesses called OfferLink Local, allowing those businesses to connect a customer’s credit or debit card to a merchant’s own discounts. Customers who use their cards at participating local businesses can then earn rewards on those cards in the form of airline miles, cash back or points. A consumer could earn frequent-flier miles simply by making a purchase at a local hardware store or bakery in addition to getting an in-store discount. And with each purchase, the retailers, banks and airlines collect data on the customer’s purchase history, including how much the customer spent, where the purchase was made and whether the customer was new. Story by Tanzina Vega for the New York Times.
Student Loan Debt Tops $1 Trillion
Students now owe a trillion dollars in loan debt. The combination of more students heading to college and ever-increasing costs of public and private higher education means more Americans are taking on debt that will take years to pay back, says the Consumer Financial Protection Bureau. The average debt of a student who graduates college with a bachelor’s degree is $27,220. Of the 37 million borrowers who have outstanding student loan balances in 2011, roughly 10% have at least one past due student loan account, according to the Federal Reserve Bank of New York. Story by Lindsay Goldwert for New York Daily News.
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 14.30 percent, identical to last week. Six months ago, the average was 14.28 percent. One year ago, the average was 14.16 percent. Story by LowCards.com.