This Week In Credit Card News: Data Breach At Trump Hotels, The Post Office As Your Bank?

The Postal Service Wants You to Bank at Your Post Office

Elizabeth Warren would like to change the way you bank. Her backing of the U.S. Postal Service’s plan to begin offering budget-priced banking services to U.S. savers could remake the American landscape regardless. In May, USPS admitted to losing $1.5 billion in its most recent fiscal quarter. Last month, though, the USPS Office of Inspector General refloated an idea to close the Post Office’s budget gap. Simply put, the Post Office should turn itself into a bank. It would begin expanding the kinds of financial services it offers, permitting “unbanked” and “underbanked” customers to take out small loans, cash checks, pay bills, and open savings accounts–all at their local post office. According to the Inspector General, entering this market could help USPS reap as much as $10 billion in annual revenue–and close its budget gap with a resounding snap. [Daily Finance]

Card Breach at Trump Hotel Properties

The Trump Hotel Collection, a string of luxury hotel properties tied to business magnate and now Republican presidential candidate Donald Trump, appears to be the latest victim of a data breach on credit cards, according to data shared by several U.S.-based banks. Sources have little doubt that Trump properties in several U.S. locations–including Chicago, Honolulu, Las Vegas, Los Angeles, Miami, and New York–are dealing with a card breach that appears to extend back to at least February 2015. [Krebs On Security]

Tourists Are Left in Lurch by Greek Crisis

Greece’s unexpected call for a July 5 referendum on the economic policies creditors want–which could push the country into bankruptcy and out of the euro–is catching up with tourists. Automated-teller machines are running dry and many businesses are no longer accepting credit cards. Foreign visitors who find themselves unable to pay for services or meals may have to cut vacations short, just as Greece’s vital summer tourism season gets into full swing. [The Wall Street Journal]

Feds Take Action Against Sellers of Non-Existent Credit or Identity Theft Monitoring Services

The Consumer Financial Protection Bureau announced an action against two “credit card add-on product vendors” for billing customers for add-on services they never actually received. The two companies, Intersections, Inc. and Affinion Group Holdings, Inc., must pay almost $9.6 million combined in consumer refunds and penalties. The CFPB said that under the proposed consent orders, Affinion would pay $6.8 million to cover refunds for eligible consumers plus an additional $1.9 million in civil penalties, and Intersections would pay $55,000 for refunds and $1.2 million in penalties. [Consumer Affairs]

Barclay Launches Apple Pay Competitor In UK

Barclaycard is trying to beat the competition by releasing a contactless payment system ahead of Apple Pay’s UK launch next month. The mobile payment solution, known as bPay, comes in three forms, allowing customers to pay for transactions on the go via a wristband, sticker or key fob. Currently, Barclays is the only major bank not to support Apple Pay in the UK. Any Visa or MasterCard registered in the UK can be paired with the corresponding bPay smartphone app–not just cards from Barclaycard. []

Got a New Plenti Card? Better Check the Fine Print

The new Plenti card from American Express promises to bring order to chaos by combining all your loyalty programs–and the points you earn—from hundreds of retailers into one. But there’s a big catch to that claim that’s easy to miss: while you can earn Plenti points at 10 bricks-and-mortar retailers, including AT&T, Macy’s and Rite Aid, and from hundreds of on-line retailers, right now you can only redeem them at four–Macy’s, Rite Aid, Exxon and Mobil stations. [NBC News]

Most Americans Want More Information about Data Breaches

A staggering number of American consumers want to know more about data breaches than what companies have provided them, according to new research from the Zix Corporation. 84% of Americans said the best way for retailers to maintain consumer trust after a data breach is to immediately send out a notification and keep consumers informed throughout the investigation process. 92% said they believe a company should have to report a data breach to their entire customer base, no matter the size of the breach. []

J.P. Morgan Expands Prepaid Card Uses

Under an agreement the bank has reached with New York Attorney General Eric Schneiderman, J.P. Morgan Chase will give customers of its Liquid prepaid debit card access to online bill payment and let them use the bank’s person-to-person payment service. [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 14.62%, identical to last week. Six months ago, the average was 14.45%. One year ago, the average was 14.52%. []

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This Week In Credit Card News: Chip Cards Hurting Businesses; Addicted To Mobile Banking?

Who’s Addicted to Mobile Banking

A recent survey shows that when it comes to digital banking trends, consumers are more addicted to online banking sites than mobile apps, but that the trend is slowly shifting. The survey showed that 33% more consumers are using their mobile device to access a mobile banking app, compared with a year ago. But online banking is seeing stronger growth too, as that figure is up 35% on the year. And, interestingly, 16% more consumers have visited a bank. [PYMNTS]

New Chip Credit Cards Putting Squeeze on Small Businesses

New debit and credit cards with computer chips are putting the squeeze on small businesses. Businesses of all sizes face an Oct. 1 deadline to get new card readers and software that can handle chips. Most estimates of transition costs for small companies vary from the low hundreds to tens of thousands of dollars due to the wide range of equipment used. If businesses don’t meet the deadline set by companies including MasterCard, Visa and American Express, they can be held liable for transactions made with phony chip cards. The switch poses a threat for small companies because they can’t get the volume discounts on the new equipment that big retailers get. And they don’t have in-house tech experts to install the new systems. [Associated Press]

Consumers Still Confused about their Credit Scores

The vast majority of Americans (90%) recognize the importance of having access to credit. But a significant percentage (52%) of adults do not understand the most influential factors that go into a credit score, and almost 40% do not know their personal credit score. People who consistently check their score have a better perspective of a “good” credit score. Those who had previously checked their scores said 719 was “good” on average, while those who never check their score said it was 668. Of those surveyed, only 37% said their current scores will help them achieve their personal goals. 22% admit they have never taken any steps to improve their score. []

Credit Card Firm Synchrony Financial Uses Analytics to Help Retailers Clinch Deals

Synchrony Financial, the $12 billion credit card company spin-off from General Electric, plans a September launch of personalized pricing and other mobile offers for shoppers. Synchrony handles private-label credit cards for Gap and other retailers and merchants. [The Wall Street Journal]

India’s Government Proposes Income Tax Benefits for Debit/Credit Card Payments

India is looking to incentivize the use of debit and credit cards by offering tax rebates to merchant establishments and consumers. The finance ministry has prepared a draft discussion paper proposing benefits such as an appropriate tax rebate or a 1-2% reduction in value added tax for establishments that accept electronic payments. [The Economic Times]

UK Debit Cards are a Scandalously Easy Target for US Fraudsters

According to a large sample of fraud looked at by FICO, the US accounted for almost half of all fraudulent cross-border transactions on UK debit cards during 2014 despite being a distant third on the list of total transactions. FICO didn’t break down US fraud by type in much detail, but the vast majority of these fraudulent transactions were card-not-present frauds carried out from the Internet or by phone. Cross-border fraud is a big deal, accounting for a third of all theft from the 52 million UK cards sampled.[Tech World]

Green Dot Retains Wal-Mart MoneyCard Account

Green Dot reached an agreement with Wal-Mart Stores to continue as the issuing bank for the retailer’s prepaid reloadable debit card program for an additional five years. The companies had worked together on Wal-Mart’s MoneyCard program since its 2006 inception, but Green Dot shares have declined 25% so far this year through Monday’s close, partly on concerns about the possibility of losing the business. The new term, which became effective May 1, replaces an agreement that was already extended to the end of the year. [The Wall Street Journal]

Atom is a New UK Bank That’ll Have No Branches, Just Apps

Atom wants to take mobile banking seriously; so seriously, in fact, that it aims to exist almost solely as a mobile app. The company has just been granted a UK banking licence and plans to launch later this year, first using mobile apps to offer its services before graduating to desktops in due course. Atom will have a 24-hour support team available by phone, email, webchat and social networks, but the idea is you can do everything, even open an account, from within the mobile app. [Engadget] 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 14.62%, slightly higher than last week’s average of 14.60%. Six months ago, the average was 14.46%. One year ago, the average was 14.52%. []

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This Week In Credit Card News: Huge Growth In Mobile Wallets; The Sex Pistols Credit Card

Almost One in Six US Consumers are Using Mobile Wallets

Almost one in six US consumers (15%) have used a mobile wallet in the past six months, up from 9% in the same period in 2013, and an additional 22% are likely to adopt mobile wallet functionality in the coming six months.Among mobile wallet users, 61% have used PayPal with an average 88% satisfaction rate, 38% have used Amazon (84% satisfaction), 31% have used Starbucks (93% satisfaction), 31% have used Apple Pay (89% satisfaction) and 31% have used Google Wallet (82% satisfaction). [NFC World]

Virgin Money Makes Sex Pistols the Face of its Credit Cards

Sir Richard Branson is reconnecting with his punk rock roots in order to sell credit cards. Virgin Money, the credit card company founded by the British billionaire, is offering U.K. consumers the chance to carry a card featuring art from the Sex Pistol’s 1977 classics: “Never Mind the Bollocks” and “Anarchy in the U.K.” Branson, who got his start in the music business, signed the seminal punk band to his Virgin Records label in the 1970s after seeing them perform at a London club. [CNN Money]

MasterCard Announces Tokenization Support for Private-Label Cards

MasterCard announced that it has become the first payment network to provide tokenization services to private label (store-branded) credit card issuers, enabling merchants to take advantage of the latest digital payment innovations. BJ’s Wholesale Club, Kohl’s and JCPenney will be among the first retailers to bring mobile payments to their private label cardholders later this year. All three retailers now are involved with forthcoming Apple Pay updates this fall. [Mobile Payments Today]

Discount Chain Fred’s Probes Card Breach

Fred’s Inc., a discount general merchandise and pharmacy chain that operates 650 stores in more than a dozen states, disclosed that it is investigating a potential credit card breach. KrebsOnSecurity contacted Fred’s earlier this week, after hearing from multiple financial institutions about a pattern of fraud on customer cards indicating that Fred’s was the latest victim of card-stealing malware secretly installed on point-of-sale systems at checkout lanes. [Krebs on Security]

Discover Closes Mortgage Sector in Favor of Direct Banking

Discover Financial has decided to close its mortgage sector to focus on its direct banking products, including Discover credit cards. The transition will leave approximately 460 employees without work. Discover Home Loans was established in 2012 after a business acquisition, and it will continue to operate under a new owner: AmeriSave Mortgage Company. Discover will be accepting loan applications until July 31. []

Apple, Google and Samsung Bet on Walletless Future

Apple this week announced enhancements to Apple Pay, which was introduced in the fall, and Google said it will soon launch Android Pay, its Google Wallet successor. Amazon dropped out of the digital wallet race earlier this year but could return. Samsung is about to enter the market after buying Massachusetts-based LoopPay in February. [Top Tech News]

MasterCard, Capital One:Why the Stocks Will Surge

There are many reasons to believe credit card companies will continue to charge ahead. In the U.S., consumers may still feel wary of debt after the pain of the Great Recession, but that hasn’t stopped them from swiping their credit cards: Revolving credit, reflecting mostly credit card debt, climbed at an annual 11.57% rate in April, the second-largest increase since 2009. That’s part of a larger trend that’s been playing out for decades, as both Visa and MasterCard have seen purchase volume on their U.S. credit cards soar well over 100% since 2000 as consumers take on more debt and increasingly use plastic over cash. [Barron's]

Foolish Credit Card Mistakes Travelers Make

58% of Americans take at least one vacation per year. And they’ll spend a lot of money to do so. 42% said they planned to spend $1,500 or more on their next trip. Many travelers who hit the road this summer will be paying with plastic for everything from plane fares to restaurant meals. Credit cards make travel easier in many ways. But credit cards pose risks for vacationers as well. The biggest danger is overspending, a trap that 60% of people fall into. You may decide to splurge on extras while traveling, but you’ll end up paying for it after the trip is over. Here are five more credit card mistakes people should avoid while on vacation. [USA Today] 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 14.60%, identical to last week. Six months ago, the average was 14.46%. One year ago, the average was 14.52%. []

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This Week In Credit Card News: Hackers Hit Small Businesses, Is Credit Monitoring Benefical?

Hackers Go After Little Fish, Too, While Trawling for Credit Cards

Hackers are going local in their efforts to steal credit card information from customers, hitting small businesses with as much frequency as retail giants. Take Eataly, the operator of more than two dozen upscale food halls in New York, Chicago, Italy, Japan and elsewhere. The company disclosed last month that the systems at its store in the Flatiron district of Manhattan had been breached. The hackers unleashed malicious software into its payment processing system that enabled them to potentially steal customer credit card information for several months of this year. [The New York Times]

Free Credit Monitoring After Data Breaches is More Sucker than Succor

After companies announce they’ve had a data breach, they often offer customers “free credit monitoring services.” But who does this really benefit? When Target and Home Depot announced their mammoth data breaches, the companies offered free credit monitoring to those impacted via services such as ProtectMyID and AllClearID. But this service actually doesn’t help the customers very much, experts say. [MarketWatch]

Apple to Add Cards From Discover, Some Stores to Apple Pay

Apple said it is expanding its Apple Pay mobile-phone payments service to accept Discover credit cards and cards from certain retail stores, such as department-store chains Kohl’s and J.C. Penney, and warehouse club BJ’s Wholesale Club. [The Wall Street Journal]

Google’s Android Pay will not Collect Card Transaction Fees

When Google finally launches Android Pay, its mobile phone payment service, it will not get a cut of the interchange fees on transactions. This is drastically different than Apple Pay. When Apple Pay was introduced, banks and merchants were clamoring to be part of the innovative new payment system. As a result, Apple was able to negotiate a .015% cut of every credit card transaction and a 0.5% fee on debit card purchases. []

Unfair Credit Card Fees Cripple Local Small Business Owners

Because there are so many transactions these days and the technology is so cheap, it costs the banks only a few pennies every time a customer swipes a card to make a purchase. Yet the banks charge a 500% profit margin on debit cards, according to a recent study using the banks’ own figures, and up to 10,000% on credit cards. That’s a sizable profit compared to those in the supermarket industry, where profit margins are around 1-2%. Banks are able to charge such a pretty penny because Visa and
MasterCard control most of the credit card market, which lets them price-fix swipe fees in secret for their member banks. []

Consumers Now Prefer Mobile Banking over Branch Banking

The banking system in America has officially reached a turning point. According to a new report, more consumers prefer mobile banking over branch banking. The study shows that 23% of consumers choose to use their smartphones as a primary access point for their checking accounts, compared to 17% who still prefer to visit the branch. 39% of those surveyed prefer online banking. []

Uber Continues To Finance Its Drivers With New Gas Credit Card

Ride-hailing service Uber already connects its drivers, even those with bad or no credit, with car loans. Now drivers can also get an Uber credit card. The Uber Fuel Card, issued by MasterCard and FleetCor, will allow qualified drivers to get discounts of up to 15 cents a gallon on gas purchases at thousands of U.S. gas stations, the company said Tuesday.Only drivers who completed 200 rides the previous month (or have done 200 rides in their first month) can use it—a tactic Uber’s vice president of strategic initiatives David Richter called a “driver retention strategy.” [Forbes]

Square Unveils Mobile Wallet-Friendly Credit Card Reader

Square, the payments processing start-up, unveiled a new credit card reader on Monday, one capable of accepting mobile payments like those made through Apple Pay and Android Pay. The new reader, which Square said will be widely available this fall, operates wirelessly for merchants who want to accept contact-less mobile payments. It also accepts so-called EMV credit cards, a technology that includes a chip built into credit cards for added security. Square said the new reader will cost $49. [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 14.60%, slightly higher than last week’s average of 14.55%. Six months ago, the average was 14.46%. One year ago, the average was 14.48%. []

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This Week In Credit Card News: Bar & Restaurant Data Breach; Credit Card Debt & Depression

Does Credit Card Debt Lead to Depression?

Researchers have found a statistically significant link between short-term household debt, such as debt on credit cards and overdue bills, and increases in symptoms of depression. The link between depression and debt was strongest among unmarried people, adults near retirement and those who are less educated, according to the new study by researchers at the University of Wisconsin-Madison. The study also found that, on average, people’s depressive symptoms tend to increase as their short-term debt rises. [CNBC]

Harbortouch is Latest POS Vendor Breach

Last week, point-of-sale maker Harbortouch disclosed that a breach involving “a small number” of its restaurant and bar customers were impacted by malicious software that allowed thieves to siphon customer card data from affected merchants. The compromise appears to have impacted more than 4,200 Harbortouch customers nationwide. [Krebs on Security]

AmEx Launches Plenti Cross-Branded Rewards Program

American Express is changing the way customers earn rewards points, thanks to the new Plenti rewards program launched this week. Plenti is the first rewards card to offer interchangeable loyalty points across multiple brands, and it may be just what AmEx needs to repair its image in the card industry. Some of those partners include AT&T, Enterprise, Hulu, Exxon, Macy’s and Rite Aid, with new companies expected to join the program in the future. Cardholders can earn loyalty points with any partner to use on discounts, special offers, and purchases with other partners in the program. []

Despite March Rise, Credit Card Use at Four-Year Low in First Quarter

Consumers were more wary of using their credit cards in the first quarter than at any time in the past four years, the Federal Reserve said Thursday. Credit card debt was down at a 0.3% rate in the first quarter. The drop comes despite a rebound in March. Credit card debt rose by a seasonally adjusted $4.4 billion in March, or at a 5.9% annual rate. [MarketWatch]

Sally Beauty Investigating Possible Data Breach

Sally Beauty said it is investigating reports of unusual activity involving payment cards at some stores, a year after disclosing a breach that affected more than 25,000 customer records. The retailer said it has been working with law enforcement and its credit card processor but until the investigation is complete, “it is difficult to determine with certainty the scope or nature of any potential incident.” [The Wall Street Journal]

Pentagon Credit Cards Used for Gambling, Escorts

A Defense Department audit has found that a number of Pentagon employees used their government credit cards to gamble and pay for “adult entertainment”–findings that are expected to lead department officials to issue stern new warnings. The audit of “Government Travel Charge Transactions” found that both civilian and military employees used the credit cards at casinos and for escort services and other adult activities–in Las Vegas and Atlantic City. [Politico]

AmEx Cannot Stop Merchants From Promoting Cheaper Cards

A federal judge has ordered American Express to adjust its merchant agreements which prohibit retailers from encouraging their customers to use credit cards with fewer transaction fees. The ruling by U.S. District Judge Nicholas Garaufis could result in some better deals for shoppers and a loss of revenue for AmEx. Under this ruling, store owners will be able to reward customers who choose to pay with Visa, MasterCard or Discover with incentives, such as discounts or rebates. []

Start-up That Wants to Blow Up Credit Cards Raises $275 Million

Max Levchin is no stranger when it comes to revolutionizing the financial industry. He’s one of the cofounders of PayPal. His latest startup, Affirm, allows users to borrow money within seconds at the point of purchase–it’s currently only offered online and on mobile devices–and pay off the loan in fixed monthly payments. The way it works is simple: If you buy something on a site that offers Affirm’s Buy with Affirm, you can sign up for it with your name, phone number, email, and date of birth. Within seconds, Affirm’s software goes through a bunch of data associated with your personal information and determines your creditworthiness. Then it gives the terms of the loan with clear instructions on the amount owed, the payment due date, and interest rates. You can choose to pay it off in three-, six-, or 12-month installments, and will receive payment reminders by email and text message. [The Fiscal Times]

The Little-Known Lifeline for People Drowning in Credit Card Debt

If you’re struggling to make payments on your bills, you may not know that you have options–including what’s typically called a hardship repayment program. These are programs that banks may offer directly to you, their account holder, if you express how unaffordable payments have become (vocally with a phone call, or behaviorally by missing payments). The benefits from them are primarily related to your interest rate being lowered temporarily–or for the life of the balance as long as your payments are made on time. [] 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 14.48 percent, the same as last week. Six months ago, the average was 14.51 percent. One year ago, the average was 14.49 percent. []

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