This Week In Credit Card News: Data Breach Hits Kmart, Will Apple Pay Kill Credit Cards?

Kmart Says its Store Registers Were Hacked, Exposing Credit Cards

Kmart says its stores’ checkout registers were “compromised” for about a month but no personal data or PIN numbers were lost. While some important customer information seems to have been protected, the breach could still allow criminals to make counterfeit versions of any credit cards that were exposed. [MPR News]

Apple’s Credit Card Killer Launches Monday

Get ready to tap your iPhone 6 or iPhone 6 Plus everywhere to pay for groceries or that burger in the McDonald’s drive-thru. Users take a photo of their credit card and add it to their phone’s Passbook, where it is assigned a unique device account number, encrypted and stored in the phone’s Secure Element Chip. When it’s time to make a purchase, the device account number and a dynamic security code are used to complete the transaction. Apple will never know what you purchased, the company said, and you’ll still get rewards points on the credit cards you use. [ABC News]

U.S. Banks Ramp Up Credit Card Lending But Margins May Suffer

JPMorgan Chase, Citigroup and other big banks are making more credit card loans, after years of focusing mainly on customers who paid off their balances each month. Lenders hope that in an era when consumers are conducting more of their banking online and less in branches, an increased emphasis on credit cards will help them sell more products to their customers. [Reuters]

The Holidays Bring a New Season for Credit Card Breaches

The holiday season is approaching, a time for sales and Santa and, now, credit card data breaches. Shoppers are heading into the heavy-spending season with no new credit safeguards in place. [NPR]

Credit Card Issuers are Charging Higher

The U.S. credit card industry has found its sweet spot: a combination of moderate economic growth, low interest rates and consumers who have struck a balance between spending more and paying their bills on time. The trends are expected to drive profits to post recession highs at industry giants American Express and Capital One this year and bolster the bottom line at banks with big card units, including J.P. Morgan Chase. U.S. credit card issuers will generate $158.6 billion in revenue this year, a 9% increase from 2013. [The Wall Street Journal]

Did the Durbin Amendment Make a Difference?

The Durbin Amendment contained a provision that limited the interchange fees merchants paid for debit card transactions. But on the third anniversary of this Amendment, the Electronic Payments Coalition issued results of a survey which showed consumers have not seen any price declines as a result of the cap. Furthermore, the Coalition found 16% of consumers experienced retailers imposing surcharges for debit card purchases, even with the cap in place. []

Wells Fargo Charges Into Credit Cards

Wells Fargo is trying to play catch-up as the economy gains speed, interest rates remain low and delinquency rates are at seven-year lows. Wells Fargo is the nation’s seventh-largest credit card issuer, even though it has the largest bank branch network in the U.S. and is a top lender in commercial real estate, mortgage production, small business and auto lending. [The Wall Street Journal]

The Most Serious Threat When Using Credit: You

The biggest threat to our financial lives is probably not that thieves will get their hands on our payment card information. Instead, we should concern ourselves with the way we quietly chip away at our own net worth by using credit cards too much in the first place. A handful of academic researchers have studied what goes on inside our heads when credit cards are in our wallets, and even people who do not carry a balance each month are prone to overspending for a variety of reasons. [The New York Times]

In Lending Circles, A Roundabout Way to Higher Credit Scores

While informal lending circles among families, acquaintances, co-workers and neighbors are familiar to hundreds of millions of people all over the globe, they are rarely recognized by mainstream financial institutions. But now these centuries-old networks are being seen as a promising tool to help low-income Americans build credit records, part of a new frontier of the war on poverty that has attracted a crazy-quilt coalition of supporters that include major banks, immigrant activists and academic researchers. [The New York Times] Weekly Credit Card Rate Report

Based on the 1,000+ cards in the Complete Credit Card Index, the average advertised APR for credit cards is 14.57%, slightly higher than last week’s average of 14.56%. Six months ago, the average was 14.26%. One year ago, the average was 14.43%. []

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This Week In Credit Card News: Banks Moving To Chip And Pin; Borrowing Now At Record Levels

Banks in U.S. Moving to Chip-Based Debit and Credit Cards

Beginning this month, all new Bank of America customers will be issued debit cards with chip technology, and that existing cards will be upgraded as they expire. The cards work by creating a unique code for each transaction. While the change will not necessarily stop data breaches from occurring, the chip technology prevents criminals from using stolen information to create counterfeit cards. Most credit and debit cards in the United States rely on older “magnetic strip” technology, which is vulnerable to hacking. [The New York Times]

Consumer Borrowing Jumps to Record Level

U.S. consumers increased their borrowing in August in the category that covers auto loans and student loans but cut back on their credit card borrowing. The Federal Reserve says that overall borrowing rose $13.5 billion in August following a revised $21.6 billion increase in July. [Associated Press]

CFPB Keeps Data on Nearly 600 Million Credit Card Accounts

The Consumer Financial Protection Bureau is collecting sensitive financial data on close to 600 million credit card accounts but lacks adequate privacy and security plans to protect the information, according to a new report from the Government Accountability Office. The report also found the CFPB was collecting data on 11 million credit reports, 29 million active mortgages and 5.5 million private student loans. []

Get Rid of Your Credit and Debit Cards

Our debit and credit cards use magnetic stripes, 1950s technology that freely transmits financial data to store registers. Fraudsters use military-grade software weaponry to capture that information as it bounces from store to payment processor to credit card network and, eventually, the bank. It’s no surprise that Home Depot, Michaels and Target collectively lost data on 99 million cards in the last year. [The New York Times]

Moving to ‘Smart’ Credit Cards Will Help with Security

The data security mess is going to get a lot worse before it gets better. Technology advances are bringing great benefits but have made our computer systems too complex to debug fully or even understand. Criminal hackers have a large and growing supply of vulnerabilities to exploit. [The New York Times]

Your Phone is Your Next Credit Card

People have possessed the ability to spend and send money with their smartphones for years, but mobile payments have yet to take off in a big way. Plastic and cash are still the preferred modes of buying stuff—by a long shot. But four recent events suggest that mobile payments are about to take off in a big way. [CNN]

5 Tech Companies Making Credit Cards Safer

The switch to chip and PIN cards, already the norm in many other countries, is on the horizon–a change that will undoubtedly make using your plastic safer. But in the meantime, a number of tech companies have been hatching some innovative solutions, each intended to make commerce feel a bit more secure. [Betterment]

Check Your Credit Card Bills for These Added Fees

Some credit card holders are unknowingly paying for identity theft protection and related services. Cardholders, especially those who signed up for a new card over the past few years, should check their statements for fees related to services that they may not have asked for. [The Wall Street Journal] Weekly Credit Card Rate Report

Based on the 1,000+ cards in the Complete Credit Card Index, the average advertised APR for credit cards is 14.56%, slightly higher than last week’s average of 14.54%. Six months ago, the average was 14.45%. One year ago, the average was 14.40%. []

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This Week In Credit Card News: Massive Data Breach at Chase, The Value Of Stolen Medical Data

Cyberattack Against JPMorgan Chase Affects 76 Million Households

A cyberattack on JPMorgan Chase compromised the accounts of 76 million households and seven million small businesses. The details of the breach were disclosed in a securities filing on Thursday, and emerged at a time when consumer confidence in the digital operations of corporate America has already been shaken. But unlike retailers, JPMorgan, as the largest bank in the nation, has financial information in its computer systems that goes beyond customers’ credit card details and potentially includes more sensitive data. [The New York Times]

Stolen Medical Data Worth 10 Times More Than Credit Card Information

How much are your medical records worth? About $10 on the open market, which is 10 times more than the average credit card that has been stolen. According to Reuters, cyber criminals are beginning to turn their attention to medical records in place of credit card numbers due to inadequate security systems in the healthcare industry. []

Student Loans May Drag Down Economy for Years

College-educated members of Generation X, those born between 1965 and 1980, have accumulated less wealth than their parents had at the same point in their lives, according to a new study by the Pew Charitable Trusts. The Gen Xers have built up $20,000 less home equity than their parents, adjusted for inflation, and a median debt seven times higher. [Washington Examiner]

U.S. to Shield Military from High Interest Debt

The Obama administration plans to propose tougher financial protections for personal loans made to the military amid concerns lenders are circumventing rules designed to protect servicemembers from taking on high-interest debt. The Defense Department plan is expected to extend a 36% cap on interest rates on loans to troops to include a broader swath of products. [The Wall Street Journal]

Lesser-Known Credit Card Perks Hide in Plain Sight

Many major credit cards also offer a menu of lesser-known, potentially helpful perks–some offered by the issuing bank and others provided by the card payment networks. These ancillary benefits, typically provided at no extra cost, can include rental car insurance, extended warranties, damage protection for your cellphone, lost-luggage coverage and even free admission to museums. [The New York Times]

Consumer Debt Hits an All-time High

For many American households, the recession was a time to pay off debt and get their finances in order–whether they wanted to or not. But according to the latest data from the Federal Reserve’s Flow of Funds, Americans are taking on debt once again. The difference is that this time we’re borrowing to finance new cars, college tuition, and other consumer goods. American household debt peaked in 2007 and has since fallen 15%. Consumer debt, on the other hand, has continued to increase and just reached an all-time high of $3.2 trillion. [Bloomberg Businessweek]

At Last, More Consumers Say They are Better Off Than a Year Ago

A survey by Absolute Strategy Research shows U.S. households feel much better about their personal finances, job security and future economic prospects than they have at any point since mid-2009 when ASR began the survey, a time period that corresponds to the start of the current expansion. For the first time in this upturn, more consumers say they are better off financially now than a year ago compared with the share saying they are worse off. [The Wall Street Journal]

Bank of America “Chips” its Debit Cards

Bank of America is the first major U.S. bank to issue debit cards with chip technology, a move that other banks are sure to follow. The bank says it already offers the chips on credit cards and will issue cards with chips when replacing expired cards and to new customers. The chip technology essentially holds the same information the magnetic strip does on credit cards. It works with a pin number which, when verified, allows the transaction to be processed. [MarketWatch]

U.S. Bank to Refund $48 Million for Improper Credit Card Practices

Last week, the Consumer Financial Protection Bureau lowered the boom on U.S. Bank for improper credit card practices. The CFPB ordered the bank to refund $48 million to customers. The bank must also pay fines of $5 million to the CFPB and $4 million to the Office of the Comptroller of the Currency. []

Apple Pay Signals New Era at Cash Register

Not a single purchase has been made with Apple’s new payment system, Apple Pay, but the service, expected in the coming weeks, already has the technology industry scrambling to profit from a future in which apps could regularly replace cash, checks and credit cards. [The New York Times] Weekly Credit Card Rate Report

Based on the 1,000+ cards in the Complete Credit Card Index, the average advertised APR for credit cards is 14.54%, slightly higher than last week’s average of 14.53%. Six months ago, the average was 14.45%. One year ago, the average was 14.40%. []

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This Week In Credit Card News: Tips For Lower Checking Fees, Fight Fraud With Text Alerts

Walmart Prepares to Offer Low-Cost Checking Accounts

After years of thwarted efforts to break into banking, Walmart is making its biggest foray yet into everyday financial services. Walmart, the nation’s largest retailer, is teaming up with Green Dot, to supply checking accounts to almost anyone over 18 who passes an ID check. [The New York Times]

In Checking Accounts, The Less You Have, The More You Pay

Even a basic checking account is often no longer simple, because account rules and fees can vary widely–so widely, in fact, that the annual cost can range from zero to more than $700, according to the 2014 survey of checking account costs by WalletHub. The general rule is that the less money you hold in a bank, the more you pay the bank in fees. The biggest fees fall on consumers who overdraw their accounts, a common practice among less-well-off customers. [The New York Times]

Banks and Consumers Increasingly Use Text Alerts to Fight Fraud

There is growing interest among consumers in fraud alerts sent to their smartphones and other devices. The alerts can arrive in a matter of seconds. Given a heads-up alert, consumers may be able to scuttle unauthorized purchases. They certainly can detect the first time their credit cards are compromised or block online transactions before products are shipped. [MPR News]

43% of Companies Had a Data Breach in the Past Year

A staggering 43% of companies have experienced a data breach in the past year, an annual study on data breach preparedness finds. Despite the rise in breaches, 27% of companies didn’t have a data breach response plan or team in place, though that’s down from 39% who didn’t have them in the previous year’s survey. [USA Today]

Data Breach at 216 Jimmy John’s Locations

Jimmy John’s is the latest company to suffer a major data breach. The sandwich shop chain confirmed that criminals hacked into their point of sale systems at 216 stores and accessed customer debit and credit card information. []

Consumer Watchdog Agency Collecting Financial Data on Millions of Americans

The Consumer Financial Protection Bureau collects sensitive financial data on tens millions of Americans, and it needs to do more to protect the information, according to federal auditors. The Government Accountability Office said in a report that the bureau gathered information on 75 million credit card accounts, 10.7 million credit reports, 5.5 million student loans and a range of other financial products over the past two years. [The Washington Post]

Fraudulent Transactions Surface in Wake of Home Depot Breach

A large data breach at Home Depot has started to trigger fraudulent transactions that are rippling across financial institutions and, in some cases, draining cash from customer bank accounts, according to people familiar with the impact of the hacking attack. The fraudulent transactions are showing up across the U.S. as criminals use stolen card information to buy prepaid cards, electronics and even groceries. [The Wall Street Journal]

Why Twitter and Facebook Suddenly Want to Handle Your Money

In the space of a recent week, both Twitter and Apple made major announcements about payments—i.e. how we buy things online and in real life. Twitter has just rolled out a “buy” button, which appears alongside certain tweets and allows users to make purchases directly through Twitter with just a click or two. Apple, meanwhile, unveiled Apple Pay at its iPhone 6 event. The new mobile wallet app will allow users to “tap and pay” with their iPhones at more than 200,000 brick-and-mortar stores in the U.S., as well as execute online purchases. At the same time, Facebook has been beta-testing its own “buy” button. [The Wall Street Journal]

No Joke–Saturday Night Live Now Offers a Rewards Credit Card

Saturday Night Live has introduced a rewards credit card that gives special bonuses for spending money on entertainment. Cardholders can earn two points for every $1 spent on entertainment purchases, four points for every $1 spent on Saturday for entertainment purposes, and one point per $1 spent on all other purchases. The points can be redeemed for exclusive SNL memorabilia. []

The Debit Card Danger You’re Probably Forgetting

What makes debit cards so appealing is also what makes them riskier than credit cards. Unlike fraudulent credit card charges, fraudulent debit card purchases draw real money from your bank account. There’s no guarantee your money will ever be replaced, especially if you wait too long to report the fraud. Federal law says you are only liable for $50 in fraudulent charges if you tell your bank within two business days of learning about them. Wait more than those two days, but fewer than 60 calendar days after you receive your statement, and you can be liable for up to $500 in losses. [U.S. News] Weekly Credit Card Rate Report

Based on the 1,000+ cards in the Complete Credit Card Index, the average advertised APR for credit cards is 14.53%, slightly higher than last week’s average of 14.51%. Six months ago, the average was 14.47%. One year ago, the average was 14.38%. []

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This Week In Credit Card News: The Massive Home Depot Breach, Student Loans Burden The Elderly Too

Home Depot Breach Exposed 56 Million Credit Cards

Hackers had access to 56 million debit and credit cards when they breached Home Depot’s security system this year, the company said Thursday. The breach was even larger than the attack on Target last year, when 40 million cards were compromised. The company said that thieves had placed malware software on cash registers in Home Depots throughout the U.S. and Canada from April to September. The malware has since been eliminated. The breach will cost the company at least $62 million. [Time]

Student Loan Debt Burdens More Than Just Young People

An estimated two million Americans age 60 and older are in debt from unpaid student loans, according to data from the Federal Reserve Bank of New York. Its August “Household Debt and Credit Report” said the number of aging Americans with outstanding student loans had almost tripled from about 700,000 in 2005, whether from long-ago loans for their own educations or more recent borrowing to pay for college degrees for family members. As of July 31, money was being deducted from Social Security payments to almost 140,000 individuals to pay down their outstanding student loans, according to Treasury Department data. That is up from just under 38,000 people in 2004. [The New York Times]

Millions of Americans’ Wages Seized over Credit Card and Medical Debt

One in 10 working Americans between the ages of 35 and 44 are getting their wages garnished. That means their pay is being docked—often debt from credit cards, medical bills or student loans. [NPR]

Fed Revises Plan on How it Will Raise Rates

The Federal Reserve announced a revised plan for the mechanics of how it will raise interest rates from near zero when the time comes. As part of the so-called exit strategy, the Fed will continue to rely on its benchmark federal funds rate, an overnight interbank lending rate, as the key rate used to communicate Fed policy. But the primary tool for moving the fed funds rate will be the interest rate the Fed pays on the money, called excess reserves, that banks deposit at the central bank. [The Wall Street Journal]

Credit Card Debt Reaches Post Recession High

New credit card debt in America hit a post-recession high in the second quarter of 2014, reaching a total of $28.2 billion, according to a new study. That is the largest amount of debt since the economic downturn and almost 200% more than the second quarter of 2009. This new debt comes as somewhat of a surprise since Americans just paid off $32.5 billion of credit card debt during the first quarter of 2014. Now, consumers have charged 86% more money in the second quarter, with the average household credit card debt near $6,800. []

What You Need to Know About the Future of Paying for Stuff

Google has Google Wallet; Visa has payWave; MasterCard has PayPass; and American Express has ExpressPay. Apple just announced its own, with Apple Pay. If you’ve heard of any of these credit card services other than Apple’s recently announced system and maybe Google’s long-running program, we’re impressed. But virtual payments are more prevalent by the year, and Apple Pay is giving the concept a much-needed publicity boost. Don’t throw away your wallet just yet. [Engadget]

Costco Stores in Canada to Stop Taking American Express

Costco will stop accepting all American Express cards in Canada on January 1 after a breakdown in negotiations between the two companies. U.S. stores will continue to accept AmEx, with the exception of TrueEarnings and American Express Platinum Cash Rebate cards issued in Canada. [Bloomberg] Weekly Credit Card Rate Report

Based on the 1,000+ cards in the Complete Credit Card Index, the average advertised APR for credit cards is 14.51%, slightly higher than last week’s average of 14.46%. Six months ago, the average was 14.47%. One year ago, the average was 14.39%. []

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