LowCards Weekly Credit Card Update March 9
DAILY DEAL SITE TO LAUNCH BRANDED CREDIT CARD
LivingSocial, the second-largest daily deal company behind Groupon, plans to launch its first credit card in coming months to help merchants attract repeat customers. The card, with no annual fee, will be offered with Chase and Visa to all LivingSocial’s U.S. subscribers. Card holders who make 10 purchases a month with the card will earn 10 credits known as Deal Bucks. These can be used to pay for LivingSocial daily deals and other offers the company runs.
Story by Alistair Barr for Reuters
A NEW CREDIT CARD LETS CUSTOMERS MAKE THE RULES
Barclaycard created a new kind of credit card that tries to put you, the cardholder, in the driver’s seat. It’s calling the new card the Barclaycard Ring MasterCard, the first social credit card, one that will be shaped by its cardholders’ feedback. And this isn’t simply about personalizing your plastic with pictures of puppies and kittens or picking a convenient payment date. Barclaycard is taking matters a step further: it’s pulling back the curtain on its profit and loss statements–and it says it’s going to let consumers collect a share of the profits. The card carries an 8
percent variable interest rate, and that applies to new charges, balance transfers and cash advances. There are no balance transfer fees and there is currently no annual fee though it’s possible the cardholder community may decide to implement one later. Cardholders will actually vote on topics such as raising program fees, changing the annual percentage rate, whether to outsource customer service and how the Giveback is shared. The group will also weigh in on marketing ideas, merchant deals, Web site enhancements and other topics.
Story by Tara Siegel Bernard for the New York Times
WELLS FARGO ENDS FREE CHECKING IN 6 MORE STATES
Wells Fargo, the bank with the most U.S. branches, ended free checking in six eastern states as it seeks to recover revenue lost under new financial rules. Customers in New York, New Jersey, Connecticut, Georgia, Delaware and Pennsylvania must pay a $7 monthly fee for a basic checking account if they receive paper statements and $5 if they select electronic statements, said Lisa Westermann, a Wells Fargo spokeswoman. Customers can get the fee waived if they direct deposit more than $500 in their account each month, or maintain a $1,500 balance. “We’re rolling it out region by region,” Westermann said in an e-mail. “We plan to roll it out through all the regions eventually.”
Story by Dakin Campbell for Bloomberg
CREDIT CARDS OFFER SOME RELIEF FROM GAS PRICES
Gas at $4 or more per gallon drains additional money from budgets at a time when money is already tight for many households. Credit cards with gas rewards can provide consumers with a small bit of relief. Credit cards offering rebates on gasoline are offered from gasoline companies and credit card companies. Like all reward cards, the benefits are a good deal only if you pay off your entire balance on time each month, since many station-branded gas cards have some of the highest interest rates in the industry, ranging from 21% to 26.99%. When deciding on a gas card,
one consideration should be your purchase pattern. If you consistently purchase gas from one particular station near your home or office, you may want to consider a credit card offered by that brand. However, if you fill up at different stations or look for the least expensive gas, a bank-sponsored card is probably more appropriate for you since those rewards are consistent no matter where the gas is purchased.
STUDENT LOAN DELINQUENCY HITS $85 BILLION IN Q3
About $85 billion in U.S. student loan debt, or 10 percent of the outstanding balance, was delinquent in the third quarter of 2011. Of the 37 million borrowers who have student loan balances, 14 percent, or about 5.4 million people, have at least one past due student loan account, according to a report posted today on the Federal Reserve Bank of New York’s website. The average outstanding student loan balance per person is $23,300, according to the report. A third of the borrowers are under the age of 30. While the majority of loans are taken by students, parents also incur debt in their own names to pay for children’s college costs.
Story by Janet Lorin for Bloomberg
CITI GEARING UP TO ENTER CHINA’S CREDIT CARD MARKET
Citigroup is gearing up to issue its own credit cards in China this year, the latest push by a Western bank to attract Asian consumers with a growing appetite for borrowing. In striking out on its own this year, Citigroup will expand in a country that analysts expect to soon become the world’s largest credit card market, and potentially, one of the most lucrative in the future. Citigroup, which offers credit cards in 14 markets in Asia Pacific, is also stepping up its efforts to get plastic into the hands of consumers in other fast-growing markets, such as Vietnam, and established ones, such
as Hong Kong. Citigroup will launch both personal and commercial credit cards this year in China. The bank declined to reveal the timing or details of its rollout plans.
Story by Kathy Chu for USA Today
AMERICAN EXPRESS TESTS PREPAID CARD AT WALMART
American Express, which is trying to expand beyond the affluent customers it normally lends to, is testing the sale of prepaid cards in some Wal-Mart stores. The New York-based lender is marketing the reloadable cards, which can be used wherever American Express is accepted, under the name “bluebird” in about 180 of the discount retailer’s stores on the West Coast. Customers can also sign up for the card online. The bluebird card does not carry a monthly fee, purchase fee or activation fee. It also offers one free ATM withdrawal each month, followed by a $2 fee for each subsequent withdrawal.
Story by Andrew Johnson for the Wall Street Journal
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 14.29 percent, slightly higher than the 14.25 percent last week. Six months ago, the average was 14.15 percent. One year ago, the average was 14.01 percent.