This Week In Credit Card News: Airline Rewards Cut Back, Debt Settlement Companies May Hurt Consumers

Report Says Debt Settlement Companies May Leave Customers Worse Off

A report from the Center for Responsible Lending finds that consumers who sign on with for-profit debt settlement companies saw their debt grow about 20% on average before a settlement, with no guarantee that such a settlement will be reached. [The New York Times]

Fliers Facing Fewer Rewards

Airline rewards programs may not seem so rewarding anymore. Two of the nation’s largest airlines, United Airlines and Delta Air Lines, have announced that in 2015, frequent flier points will be based on dollars spent on plane tickets rather than miles flown. And while another major carrier, American Airlines, has not announced any change, it is “watching the competitive environment.” [The New York Times]

U.S., AmEx Duel at Antitrust Trial Over Credit Card Fees

American Express has hindered price competition in the U.S. credit card market and prevented merchants and consumers from reaping cost savings, a lawyer for the U.S. government said during the first day of a trial in Brooklyn federal court. [Reuters]

Isis Mobile Wallet to Get New Name to Avoid Confusion with Militant Group

Isis mobile wallet service is looking to rebrand itself to avoid being mistaken for the militant group ISIS. The name has given rise to confusion as it gets mixed up with ISIS, an Islamic militant group that has come to prominence in Iraq and Syria. Public perception and search engine optimization factors have forced the Isis mobile wallet service to come up with a new brand name to distance itself from the terrorist group. [Headlines & Global News]

Growth in Credit Card Balances Cools Sharply in May

Growth of Americans’ credit card balances slowed sharply in May, a sign consumers are cautious about adding to their debt burdens. The amount of outstanding revolving credit–mainly debt on credit cards–rose at a seasonally adjusted annual rate of 2.5% to $872.2 billion in May, according to a Federal Reserve report. That increase is far below the 12.3% pace recorded the prior month (which was the fastest rate of growth since 2001) and is in line with the tepid gains recorded over the past year. [The Wall Street Journal]

Debit Card Usage Increasing Despite Recent Data Breaches

The 2014 Debit Issuer Study from PULSE showed a consistent growth in consumer and business debit card use in 2013, despite the data breaches that have taken place in the past year. 14% of all debit cards were exposed in data breaches in 2013, compared to just 5% in 2012. []

Device Puts All Your Credit Cards on Your Phone

Products like Loop Pay are enabling you to use your phone to make mobile payments without carrying your credit cards. The case lets you make mobile payments at any point-of-sale terminal that you would ordinarily swipe a card. Here’s where it gets interesting. The Loop case transmits a magnetic field that emulates the data embedded in your card’s magnetic strip. You simply need to hold the phone close to the stripe reader and activate the transaction. [CBS Moneywatch] 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 14.50%, slightly below last week’s average of 14.52%. Six months ago, the average was 14.48%. One year ago, the average was 14.34%. []

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Why Recent Graduates May Want To Reconsider Their Bank

Graduation is a turning point personally, socially and professionally. While those changes may take months or years to fully develop, getting your degree sets you on the beginnings of a new path.

You can add banking to the list of things that should be different going forward. Once you graduate, your banking needs may change. As a result, it may be time to graduate to a new bank. Here are six reasons why:

  1. You may need to look for a new no-fee checking account. As free checking accounts have become more scarce, a popular option remains checking accounts that charge no fees for students. Once you graduate though, you may no longer be eligible for these accounts. Free checking accounts for non-students have not completely disappeared though, especially if you look at online banks, so make sure you shop around to avoid these fees.
  2. Savings account rates are now a factor. In college, students struggle to keep enough in checking to finance the next pizza, so accumulating savings is not part of the financial picture. Once you start working though, you should start putting aside some savings. This means that savings account interest rates should be a factor in your choice of banks. In general, bank rates are quite low right now, but be advised that they vary widely from one bank to another. Use online resources to find a relatively high-yield savings or money market account.
  3. Your ATM needs may be different. Banks usually charge extra when you use an ATM outside of their network, and when you leave college and get a job, you may find yourself living in a different area. An ATM network that fit your prior travel patterns may not be so convenient anymore. You should look for a bank with ATM locations that suit your new habits, so you don’t rack up a mountain of extra fees.
  4. You may be ready to enjoy new technologies. You may have piggy-backed on your parents’ banking relationship in order to avoid fees, and there is definitely a generational difference in how high a priority people put on mobile apps. Now that you are free to choose your own bank, you can look for the technological capabilities that will make your banking easier.
  5. For better or worse, you may have a credit history by now. Student credit cards are priced on the premise that the customer has little or no credit history. If you have had a card for a few years, your credit history may be starting to affect the rate you are charged. This may help you or hurt you, but in either case now is a good time to shop around for a better rate.
  6. It is time to take the long view. Your focus can now extend past graduation to the long term. Building a career, saving for your next car, saving for a house and even saving for retirement are all goals that should be on your radar screen. You need a bank with a combination of services that can help you toward those goals.

Congratulations on your recent graduation from college. It is an achievement that generally takes smarts, diligence and perseverance. You will have to draw on those same resources to help your finances graduate to their own new, post-academic phase.

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This Week In Credit Card News: Card Fees Killing Small Business, Tips To Improving Your Credit

Credit Card Fees are Killing Small Businesses

There is no real competition in the market for swipe fees on debit and credit cards. Because Visa and MasterCard control 80% of the card market, they are able to dictate terms. There isn’t any transparency around the small piece of the swipe fee that is open to negotiation–the amount tacked on by the processing company, which accounts for about 15% of the total swipe fee bill. Most processors don’t itemize their statements, so we have no way of knowing their slice of the total pie. That makes it almost impossible to go back and ask for a lower rate or comparison shop for a better deal. It’s a system that is ripe for abuse. [Detroit Free Press]

Be Smart When Trying to Improve Credit Score

The road to better credit could be paved with incidental costs if you’re not careful. Listed below are tactics to watch out for, because they often turn expensive–check out our tips for avoiding these costs to boost your score without spending a dime. [USA Today]

The Case for College Students to Have Credit Cards

Incoming freshmen receive dozens of warnings before stepping foot onto their college campus for the first time: Mom and dad caution them to not get carried away with extracurricular activities and instead focus on their grades. There is actually a case for college students to sign up for a student credit card. Here are three reasons why a credit card will set them up for a healthy financial future. [U.S. News and World Report]

VIP Credit Cards Flaunt Steel; Plastic is Fine

Just seeing a high-end credit card promotion hit area mailboxes should be a clue that we’re no longer talking about everyone’s Great Recession. Credit card issuers are making pitches in time for summer vacations, back-to-school sales and holiday spending. During the first three months of 2014, about 992 million credit card offers were mailed to consumers, up about 7% from the same time last year. [Detroit Free Press]

Credit Cards Help U.S. Banks as Trading, Mortgages Slump

The biggest U.S. banks, led by JPMorgan Chase, are benefiting from credit cards amid a decline in mortgage lending and a trading slump. Card revenue rose 3.1% to $1.55 billion in the second quarter from a year earlier. [Bloomberg]

22.8 Million Personal Records of New Yorkers Exposed

Nearly 23 million private records of New Yorkers have been exposed in data security breaches reported by more than 3,000 businesses, nonprofits and governments over the past eight years, New York’s attorney general reported. [Associated Press]

Consumers Anxious for Chip and Pin Credit Cards

Consumers in the United States are more than willing to transition to chip and PIN cards. According to a survey from Vision Critical, 69% of Americans believe that EMV chips will make their purchases more secure. Only 5% believe the chips will lessen the security on their cards. Even though Americans are anxious to use chip-based credit cards, 64% of respondents are currently more likely to pay in cash rather than credit cards because of the recent credit card breaches. []

Even Finance-Conscious Consumers Spend Swiftly After Payday

Americans step up their spending after payday-no surprise-but it’s not because the cash is burning holes in their pockets, a new study found. Researchers found that close to half of increased spending in the days after Americans receive pay or benefit checks comes from recurring payments such as rent or mortgage bills. The research helps explain a longstanding economic puzzle: Why do consumers with regular and predictable sources of income have so much volatility in their spending habits? [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 14.49%, slightly below last week’s average of 14.50%. Six months ago, the average was 14.47%. One year ago, the average was 14.34%. []

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This Week In Credit Card News: Issuers Pursue Subprime Borrowers, Overdraft Rules Still Hurting Consumers

Credit Card Lenders Pursue Riskier Borrowers

Lenders are courting risky credit card borrowers more aggressively than they have since the financial crisis. Banks and other lenders issued 3.7 million credit cards to subprime borrowers during the first quarter, a 39% jump from a year earlier and the most since 2008. [The Wall Street Journal]

Despite New Opt-In Rules, Overdraft Fees Still Baffle Consumers

It has been nearly four years since overdraft rules went into effect but many people remain confused about so-called overdraft fees. The report from the Pew Charitable Trusts found that in 2013, 10% of adults with checking accounts paid at least one overdraft fee–that is, a fee for a short-term advance from their bank to cover a shortage in their checking account. Another 5% paid an overdraft transfer fee, charged for transferring funds from another account or a credit card. People who overdrew reported paying fees averaging $69. [The New York Times]

Weighing the New Credit Card Come-Ons

Some 992 million credit card offers were mailed in the first three months of the year, up 7% from 927 million in the year-earlier period, according to Mintel Group in Chicago. The good news for consumers with stellar financial track records is that credit is widely available. Lenders recently have resumed extending credit to riskier borrowers, but the terms of those offers still aren’t as attractive as those tailored to the creditworthy customer. [The Wall Street Journal]

Understanding Your Credit Card Number

Do you know what the numbers mean on the front of your credit card? Much like the VIN on your car, credit card numbers are set up to identify certain components of your account. The VIN tells you what manufacturer made your car and even what color it is. The credit card number tells what company issued your credit card but also a great deal about your account information. []

5 Ways to Protect Yourself from Credit Card Fraud

In the last five years, 41% of Americans have faced credit, debit or prepaid card fraud, and about half of people who engage in “risky behavior”—like writing down a pin number or throwing away documents with banking information on them–end up being victims, a new study finds. Avoid these five behaviors to cut your fraud risk. [MarketWatch]

The One Card You Need to Ease Pain at the Pump This Summer

A gallon of regular gasoline sits at $3.70, according to the U.S. Energy Information Administration, or about 9% higher than in 2013. Those in the know, however, will be able to get a discount that mitigates the price escalation. How, you ask? With a cash back rewards card that gives them some extra juice at the gas station. [Time]

Consumers May Have to Wait for More Secure Credit Cards

A report by a Boston-based consultancy, Aite Group, estimates 30% of credit cards and nearly 60% of debit cards will not have the new EMV technology by October 2015. Visa and MasterCard have said any card issuer or retailer that has not adopted the new technology by that date will foot the bill for any fraudulent transaction that could have been prevented by EMV chips. [The Boston Globe] 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 14.52%, identical to last week. Six months ago, the average was 14.46%. One year ago, the average was 14.32%. []

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This Week In Credit Card News: A More Secure Credit Card, Problems With Credit Reports

More Secure Credit Cards with Chips Coming to the U.S.

By the end of 2015, 70% of U.S. credit cards and 41% of U.S. debit cards will have security chips–called EMV for Europay, MasterCard, Visa–according to the Aité Group. Most American card issuers prefer chip and signature which is less expensive and less complicated to issuers than chip and PIN. [Forbes]

Held Captive by Flawed Credit Reports

Credit reports can make or break a consumer’s mortgage application, car lease or, in the case of military personnel, a security clearance. But inaccuracies often show up in consumers’ credit reports, and these errors have real consequences, like increasing borrowing costs or barring people from financing a home or renting an apartment. [New York Times]

PF Chang’s Brings Back Credit Cards Imprints After Breach

PF Chang’s is resurrecting its old credit card imprinters to collect card payments from its customers. Even though this may seem like an easy way to lose even more data, PF Chang’s website indicates the restaurant is storing and destroying slips through processes approved by the debit and credit card companies. The rules for this vary by location, but most of them include burning or shredding the documents after use. []

UK Worst in Europe for Card Fraud

Over a quarter of Brits have experienced card fraud in the past five years, making the UK the worst offender in Europe, while the United States sits fourth globally with over 40% of consumers affected. [Info Security]

Why Debit Cards Look Stronger Than Ever

After last year’s Target payment card breach, damage to the debit card brand wasn’t even close to being a serious threat. So says the Debit Issuer Study, which reports more robust use of debit cards, although card providers aren’t just tightening card security measures, but sweetening the pot with ample rewards programs. [The Street]

Popular Buys Citi’s Retail, Credit Card Business in Spain

Spain’s Banco Popular has agreed to buy Citi’s retail banking and credit card business in Spain. Popular, Spain’s fifth biggest bank by market value, said it would take on about 950 employees and 45 branches from Citi as part of the deal, as well as 2 billion euros ($2.7 billion) worth of deposits and 1.1 million credit cards. [Reuters]

The Do’s and Don’ts of Closing Credit Cards

Once consumers build up their credit health and add better cards to their inventory, they’re often tempted to cancel their oldest cards, thinking they’re not needed. However, closing your credit cards, whether old or new, could affect your credit score. If you’re considering closing any of your cards, here are a few tips to keep in mind. [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 14.52%, identical to last week. Six months ago, the average was 14.46%. One year ago, the average was 14.32%. []

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