A weekly summary of the top credit card stories that appeared in major publications across the country.
Credit Card Companies Battle in China
The Ms. Magic credit card from China Citic Bank is dotted with Swarovski crystals and offers free beauty treatments and health insurance. Huaxia Bank’s Pretty Lady card entices women with triple points for cosmetic purchases and fitness club memberships. Citigroup, which last year became the first U.S. bank allowed to issue its own solo logo cards in China, offers to waive its first-year annual fee of 300 yuan ($49) for Rewards cardholders applying before March or spending more than 20,000 yuan by the end of December. They’re all part of a battle for affluent consumers in the world’s fastest-growing market for plastic, even as delinquencies have tripled in the past five years and profits remain elusive. Last year 46 million credit cards were issued in China, increasing the total in circulation to 331 million at the end of 2012. [Bloomberg Businessweek]
A Big Push for Mandatory Personal Finance Classes in School
With nations like Australia and the U.K. having voted to make financial education mandatory in their school systems, the U.S. is moving aggressively to re-assert leadership on this important front in the global fight against financial illiteracy. Schools in the U.S. are governed at the state level. It is unlikely we’ll ever have a federal mandate for K-12 financial education like that in the U.K. or Australia. But most states have agreed to a common core initiative that dictates certain educational standards across state lines and which will be in force next year. Treasury’s new website will help teachers build personal finance lessons into courses they must redesign anyway. Just four states currently require a stand-alone course in personal finance. Unless this subject matter is tested it will never be taught. Research shows that games and practical money choices are most effective with financial lessons. In surveys, just one in five teachers say they feel comfortable teaching about money. And of course, parents are hands-down the most influential adults in any child’s life. [Time]
Trying Out the New U.S.-Issued Chip Credit Cards
On a recent trip to France, I tried out the new “chip” credit card that Bank of America (and some other U.S. banks) are issuing. It comes with an embedded chip on the front of the card that contains user information that’s read by credit card processing machines, as well as the traditional magnetic-swipe strip so it still can be used in the U.S. The verdict? The Bank of America chip and pin card certainly was more useful than my traditional U.S. credit card, but travelers in Europe and beyond still should carry cash to use at highway toll machines in case it doesn’t work. In Canada, where U.S. travelers are so prevalent, most merchants have dual machines that accept chip-and-pin and the traditional swipe card. Hopefully in the future, U.S. banks will shell out the necessary money and set up the infrastructure for true chip-and-pin cards. It would cut down on fraud and make traveling abroad a lot easier. [The Seattle Times]
Do 0% Credit Card Deals Really Mean Free Money?
Credit card companies are once again offering free money–or it sure looks free when you see a huge 0% plastered on the envelope. Open that new plastic, buy now and get 0% until August 2014? Credit card experts say we’re seeing the best promotions for plastic ever since the Great Recession. The latest run of 0% offers–including 0% financing deals at stores and 0% introductory-rate major credit cards–is one more sign that the worst is over for the economy. More jobs mean more people can pay their credit card bills. Credit card issuers are able to offer 0% rates to a significant group of consumers now because the expectation is that interest rates will remain low and the unemployment rate won’t climb dramatically through the end of 2014. If that’s correct, economists say, it would be awhile before rates increase appreciatively. [USA Today]
A Credit Score That Ignores The Innocuous Mistake
Credit scores don’t differentiate between people whose credit suffered for an innocuous reason, and consumers who can’t keep up with their credit card payments after a wild shopping spree at Best Buy. But now, at least one major credit score generator, VantageScore Solutions, has decided to ignore collection actions on credit reports–more than half of which are typically tied to medical debts–as long as the collections are paid. The company found that paid collections are less accurate at predicting future defaults than looking at unpaid collections in combination with a variety of other factors, like the age of consumers’ accounts and the size of their loans. Proposed legislation that was reintroduced in Congress this year to require consumer reporting agencies to remove fully paid or settled medical debt information from consumers’ credit reports within 45 days of the debt’s resolution. That sort of fix could potentially help some of the estimated seven million people who reported that a billing error prompted a collection agency to contact them in 2012. [New York Times]
Credit Card Debt Falls in March
Overall credit card debt fell for the first time this year during the month of March, according to data released yesterday by the Federal Reserve. Revolving credit, made up mostly of debt on credit cards, decreased in March at an annual rate of 2.4%. It now totals $846.2 billion, a decrease of $1.71 billion from February. The drop in credit card debt appeared to be the result of slower-than-anticipated consumer spending. Cardholders may be showing concerns about taking on more debt at a time when their payroll taxes are increasing. [LowCards.com]
7 “Smart” Credit Card Tips That Aren’t
There’s a lot of advice floating around out there about how to manage your credit cards and other debts to maximize your credit score. The trouble is, not all this wisdom is created equal, and some tips intended to help your credit can actually have the opposite effect. Here are seven supposedly “smart” tips we’ve heard bandied about recently that generally ought to ignored. [Time]
Visa Plants a Seed for Growth Abroad
On a cloudy morning in Rwanda’s capital, Ginger Baker tested Visa’s big bet on mobile payments on this tiny African country: She tried to buy a cup of coffee with a credit card. Mobile payments may seem like a low priority in a country where the average annual income is $750 and most of the 12 million citizens don’t have running water or electricity. But Visa is helping Rwanda revamp its rudimentary financial infrastructure as part of the government’s goal to become the “Singapore of Africa.” For Visa, it represents an important pilot project that it hopes to replicate in other potentially high-growth emerging markets. Under the new mVisa mobile-payment system, cellphones will send, receive or save money without users visiting a bank or swiping a card. The effort could introduce millions of people to formal banking for the first time. [Wall Street Journal]
Regulators Scrutinize Auto Lenders Over Add-Ons
The Consumer Financial Protection Bureau has issued subpoenas to U.S. auto lenders over the sale of extended warranties and other financial products, according to people familiar with the investigation, expanding a civil probe that lenders say could slow the booming car-loan industry. Any new restrictions could affect millions of Americans who use loans to buy new and used vehicles each year. Add-on products, such as extra insurance, are a popular mechanism used by car dealers to boost profits. Though such products are legal, regulators are probing whether terms and prices are adequately disclosed. The CFPB has pursued a similar strategy with credit card companies, fining them over the use of deceptive marketing practices to sell products like identity-theft protection. [Wall Street Journal]
My Tryout of Citi’s Price Protection Service
I looked through my most recent online credit card statement to see if there was anything I should enter for a price check. This brought to light some drawbacks with the service. For starters, the line items on your credit card statement aren’t itemized. The details of the purchase are on the original receipt, which you must have in hand to enter the necessary information. I generally don’t keep receipts for smaller ticket items, though I do get some receipts electronically. So the first issue is that if you want to use the
service, you have to make sure to enter the product information soon after you buy the item, before the receipt goes in the trash. A Citi spokeswoman said that about a quarter of registered purchases over $100 have been eligible for a refund and about 38 percent of registered purchases over $1,000. The average refund is $80. Eligible items include vacuum cleaners and televisions, as well as designer jeans, shoes and luggage. [New York Times]
LowCards.com Weekly Credit Card Rate Report
Based on the 1,000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.25%, slightly higher than last week’s average of 14.24%. Six months ago, the average was 14.26%. One year ago, the average was 14.26%. [LowCards.com]
Provided by LowCards.com
Source post on MoneyBuilder
A weekly summary of the top credit card stories that appeared in major publications across the country.
A weekly summary of the top credit card stories that appeared in major publications across the country.
There are a number of excuses for ignoring the concept of budgeting for one’s own personal finances. Budgeting has a poor reputation. It’s not fun, it’s time-consuming, it’s depressing.
