This Week In Credit Card News: Amazon Rules Mobile Shopping, Many Feel Threatened By Debt Collectors

Amazon is crushing Walmart, eBay and Target in the growing mobile shopping space

Amazon is already the largest online shopping site in the world, but it’s also showing signs of dominating the next most important shopping platform: mobile shopping. According to a new note published by Oppenheimer, Amazon’s lead in the mobile shopping space is growing by a wide margin, tripling the number of U.S. unique visitors to its mobile app over the past two years. Meanwhile, its biggest competitors like Walmart, eBay and Target saw almost no growth in the same time span. [Business Insider]

60fb1b88cb7b6195928470e728f43b08 This Week In Credit Card News: Amazon Rules Mobile Shopping, Many Feel Threatened By Debt Collectors

AP Photo/Richard Drew, File

CFPB Reports 1 in 4 Consumers Contacted by Debt Collectors Feels Threatened

According to a new report released by the Consumer Financial Protection Bureau, 27% of consumers who have been contacted by a debt collection agency in the last 12 months say they “felt threatened” by the company’s actions. In addition, three out of four consumers said that debt collectors did not honor their request to cease contact. In addition to feeling threatened, many consumers were harassed about debt under false information.  []

Gift Card Spending Hits $46 Billion

Adults across the United States spent $46 billion on gift cards in the last 12 months. Of this amount, consumers spent $28 billion on gift cards for others, and they spent $11 billion on gift cards they kept for themselves. Consumers also received $7 billion worth of gift cards from their employers. As expected, Christmas reigns as the largest gift card giving occasion by dollar value, with consumers spending more than $9 billion on gift cards for others, accounting for 33% of gift card spend. Almost $7 billion is spent on gift cards as birthday gifts. Another 26% of spending on others falls outside of holidays, with giving tied to “doing something nice,” “rewarding someone,” and “saying thank you.”. In terms of dollars and percentages, 25-34 year-olds are heavy gift card givers, spending more than $7 billion on others (26% of the total), while 18-24 year-olds spend the least. [Chain Store Age]

2016 Was a Record Year for Data Breaches

U.S. companies and government agencies suffered a record 1,093 data breaches last year, a 40% increase from 2015, according to the Identity Theft Resource Center. Headline-grabbing hacks, with victims ranging from Wendy’s to the Democratic National Committee, are increasing despite regulatory scrutiny and more aggressive cyber-security spending. Worldwide spending on security-related hardware, software and services rose to $73.7 billion in 2016 from $68.2 billion a year earlier, according to researcher IDC.  [Bloomberg]

Baltimore Teacher’s ‘Black Lives Matter’ Debit Card Design Denied by Wells Fargo

When customizing her Wells Fargo debit card online, Baltimore high school teacher Rachel Nash had several images to choose from—flowers, the American flag, colorful patterns and puppies. She even had the option of uploading her own image. She wanted an image that would make people think, and help her show solidarity with people of color. The 29-year-old, who works for the city public school system, designed a customized card that read “Black Lives Matter” with a fist held in the air, using an image she found on the internet. [The Baltimore Sun]

Mastercard `Preying on Millions’ Sparked $17 Billion Fee Lawsuit in UK

Mastercard preyed on more than 46 million unknowing consumers by unfairly charging card fees over a 16-year period, lawyers seeking to bring a 14 billion-pound ($17.2 billion) class-action lawsuit told a London court. The credit card company infringed European Union competition law by imposing high charges to retailers that accepted its cards between 1992 and 2008. The panel will hold a two-day hearing to decide whether the matter should go to a full trial. [Bloomberg]

Wells Fargo to Close Approximately 400 Branches by 2018

Wells Fargo officials announced the bank plans to close more than 400 branches by the end of next year, an effort to cut costs. The bank was involved in a massive scandal last year wherein employees opened fake accounts. The scandal resulted in the company eliminating sales goals for retail bankers and prompted federal investigations, but bank officials say the scandal is not the reason for the branch closings. In a statement from Wells Fargo CFO John Shrewsberry, the bank is merely following a trend carried out by several large retail banks—closing locations and replacing them with automated systems and online bank products. The statement also claims that many of the 200 closures it anticipates this year will be in close proximity to other locations it owns and many of the employees can be transferred to nearby branches, which should limit layoffs. [Birmingham Business Journal]

George Soros, Mastercard to Partner to Aid Migrants, Refugees

Billionaire investor George Soros will partner with Mastercard on a venture they said could help migrants, refugees and others struggling within their communities worldwide to improve their economic and social status. The partnership, Humanity Ventures, stems from a pledge Soros made in September to earmark up to $500 million for investments to address challenges facing migrants and refugees. Mastercard and Soros said that despite billions of dollars of humanitarian and development assistance, millions of people remain marginalized, a situation the private sector can help rectify. Humanity Ventures intends to focus initially on healthcare and education, with a goal of fostering local economic development and entrepreneurship. [Reuters]

How to Prevent Gift Card Problems

Gift cards can be great to receive but they may also present you with a host of unexpected problems. If you received gift cards over the holidays, here are some steps you can take to minimize potential hassles. Use your gift cards quickly. Record and register the card numbers. If possible, change the gift card’s security code. Spend all the money loaded onto the card. [Consumer Reports] 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 14.96%, slightly higher than last week’s average of 14.95%. Six months ago, the average was 14.66%. One year ago, the average was 14.89%. []

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This Week In Credit Card News: 5 Ways To Pay Off Holiday Debt; New Amazon Card Could Hurt Retailers

5 Ways to Pay Down Holiday Credit Card Debt

The holidays may be over, but for many Americans the credit card debt remains. Pre-holiday polls showed that the average shopper planned to spend upwards of $1,000 on gifts, food, and decorations. For those who charged purchases on their credit cards and are now trying to pay down the balance, here are a few tips to reach the goal faster. [Consumer Reports]

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Amazon’s New Credit Card Primed To Disrupt Retail

Amazon announced its latest benefit for Amazon Prime members: an Amazon Prime credit card that offers 5% off every Amazon purchase, plus 2% back at restaurants, gas stations and drugstores and 1% back on every other purchase. The credit card is included in your Amazon Prime membership and therefore has no additional annual fee. The credit card waives all foreign transaction fees, which makes the card international travel friendly. Amazon wants to increase its Prime membership base, which has been a major profitability and growth engine for Amazon and an effective strategy to retain its customer base. According to Consumer Intelligence Research Partners, nearly half of U.S. households have an Amazon Prime membership. The 5% cash back is a push to migrate more consumers from brick and mortar retailers (like Target and Walmart) to online (Amazon). [Forbes]


A Start-Up Wants to Save You Money in a Way Most People Don’t Know Exists

Kard aims to help consumers maximize their credit card rewards programs by making them aware of the best merchant-specific offers when online shopping. To use Kard, you simply install a free Chrome extension, which you can do on Kard’s website, and type in the credit cards you use. You don’t give any personal information, just the type of card. Then, whenever you’re shopping online, Kard will notify you if any offers are available and help you activate the deal. [CNBC]

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This Week In Credit Card News: Building Credit Just Got Harder; Why We Make Just The Minimum Payment

A Credit Card Trend That Could Make Building Credit Harder

A new practice in the credit card industry is making signing up for a credit card for the first time a little bit harder. Discover is the latest credit card company to stop allowing new credit card applicants to do so with the help of a cosigner. Many other banks and card issuers had already discontinued the practice, making the ability to sign up with a cosigner rare. A cosigner can help someone with a lower credit score be approved for a card; both the cosigner and the applicant become equally responsible for paying the account’s bill. Failing to pay the bill can also hurt both parties’ credit.  [MarketWatch]

31accd806bc321109713bf33371293f3 This Week In Credit Card News: Building Credit Just Got Harder; Why We Make Just The Minimum Payment

AP Photo/Martin Meissner, File

Don’t Be ‘Anchored’ When Your Credit Card Bill Arrives

Do you carry a balance on your credit cards from month to month? If so, you’re not alone. Three in 10 credit card holders, about 113 million credit card accounts in total, carry balances. Those cardholders pay the minimum or near minimum, and it’s collectively costing them millions of dollars in needless interest payments, according to new research. A phenomenon called “anchoring” is to blame for credit card holders paying just the minimum. In the world of behavioral finance, anchoring is people’s tendency to rely on a single piece of information, sometimes the first they see, rather than considering the whole. When credit card customers see the prominent “minimum amount due” on their bills, many act on that alone. The minimum payment typically represents 1% to 2% of the outstanding credit card balance, the amount needed to stay in good standing with the lender and avoid any late fees or trigger higher interest rates.  [USA Today]

Chase Sapphire Reserve Card’s Huge Bonus Will Be Slashed

When a Wall Street banking institution starts throwing 100,000-point bonuses at credit card customers, it may be best to grab them before they inevitably disappear. And so it goes with Chase Sapphire Reserve, a card that the bank, JPMorgan Chase, introduced last summer. The bank offered a sign-up bonus worth $1,500 to people who spent $4,000 on the card in the first three months they had it and then redeemed the bonus for travel. Now the bank is cutting the bonus in half. Jan. 12 will be the last day that people can earn it by applying for the card online, though people who apply at a bank branch will still be able to get the bonus until March 12. The card is likely to remain popular. While it has a steep $450 annual fee, cardholders receive a $300 credit each year for any travel spending they put on the card. [The New York Times]

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This Week In Credit Card News: Best Way To Pay Off Credit Card Debt; Concerns About Mobile Wallets

The Best Strategy for Paying Off Credit Card Debt

Many Americans struggle to pay down their credit card debts, a challenge exacerbated by the holidays when credit card spending balloons. The Federal Reserve estimates that nearly half of U.S. households are unable to pay their credit card bills in full each month. These households owe an average of more than $15,000 spread across an average of four credit cards. To pay it down consumers must regularly decide how to allocate repayments, above minimum requirements, among their different accounts. What repayment strategy is most likely to motivate them to get them out of debt? Should they disperse payments equally across all accounts each month or concentrate payment on one account? [Harvard Business Review]

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AP Photo/Mark Lennihan, File


Banks Struggle to Close More Branches as Mobile Banking Plateaus

When mobile banking first started rolling out, adoption rates skyrocketed. But according to research from Bain & Co., the growth of mobile usage has plateaued. Between 2012 and 2015, the percentage of consumers using their bank’s app leapt from 32% to 52%. But it barely budged in 2016, inching up just slightly to 55%. In a survey encompassing 137,000 consumers in 21 countries around the world, Bain found that growth in mobile banking is leveling off in many countries, and actually declined in China. [The Financial Brand]

One-Third of Millennials Have Used Mobile Wallets

It’s no secret that Millennials are more likely to adapt to new technology than older generations, and that is certainly the case with the payment industry. One-third of late Millennials and 36% of early Millennials have used a mobile wallet, compared to just 16% of the entire adult population. For those not using mobile wallets, the biggest reason was convenience. 80% of survey respondents said debit and credit cards are easier to use than mobile wallets. 67% said they were worried about the security of mobile payments, and 65% said they didn’t see the benefit of mobile wallets. []

Toys ‘R’ Us Asks Employees to Help CEO Get Bonus

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This Week In Credit Card News: 10 Biggest Security Breaches Of 2016; Beware Of Overdraft Charges

The 10 Biggest Hacks, Breaches, and Security Stories of 2016

It’s been a long, depressing, breach-filled year in the world of computer security. Yahoo broke the record for allowing the largest hack in history-twice. Millions of zombified webcams and DVRs took down the Internet for users in the United States. Russia was accused of “hacking the vote,” and a new type of malware earned a tidy profit extorting unsuspecting users for Bitcoin. [PC World]

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Large Banks Not Following Best Overdraft Practices

Many of the largest U.S. banks are charging high, and often multiple, fees when customers incur overdrafts, according to research from The Pew Charitable Trust. In addition, more than two in five banks are rearranging transactions so that these overdraft fees are maximized. Things are no better at small banks, where overdraft programs are similar to those at larger banks. Pew found service charges, including nonsufficient funds and overdraft fees, have more than doubled in the past three decades, while interest income has decreased. Most banks charge at least $35 each time an overdraft is incurred. More than 40% of banks are processing transactions from the largest to smallest dollar amount, which reduces a bank balance more quickly and could result in additional overdrafts. []

Credit Card Rates Are Going Up and May Keep Rising

Debt on credit cards could grow even more expensive for consumers next year if the Fed follows through on plans to keep moving rates higher. Lenders base the rate they charge on credit card balances on the “prime” rate, which generally tracks the Fed’s benchmark and rose a quarter of a percentage point to 3.75%. The prime rate is set individually by banks as their lowest lending rate. A rough rule of thumb is that the prime rate is the fed-funds rate plus 3 percentage points. For many cardholders, that was likely one of the first times their rates increased in over five years, along with an equal increase in the prime rate in December 2015. If the prime rate were to move up a total of 1 percentage point, the additional annual cost to consumers would be nearly $6 billion, according to a recent report by the U.S. Consumer Financial Protection Bureau. [The Wall Street Journal]

Younger Consumers Reaching for Credit Cards

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