This Week In Credit Card News: How Retirees Can Control Card Debt; Visa-Walmart Showdown In Canada

3 Simple Ways Retirees Can Control Their Credit Card Debt

One of the biggest threats facing retirees’ finances is not that they’ve saved too little–it’s that they owe too much. While the average credit card debt among all U.S. households is about $5,700, that number jumps to $6,351 for those age 65 and over. A retiree’s average debt on credit cards is more than double the maximum monthly Social Security payment. So it’s not surprising that credit card debt is a huge financial concern for seniors, right behind medical bills and just ahead of paying for utilities. [CNBC]

Walmart’s Showdown with Visa in Canada Deepens

Shoppers who use Visa credit cards to pay for their purchases at some Walmart stores in Canada may be in for a shock. The chain will stop accepting Visa credit cards at its 16 stores in Manitoba province, the latest escalation in a tiff over credit card transaction fees. Although still limited to a fraction of Walmart’s vast network, the fight reflects a deepening divide over the transaction fees Visa charges in Canada, where Walmart operates more than 400 stores. The boycott started this summer with Walmart’s three stores in Thunder Bay, Ontario. [USA Today]

Prepaid Cards’ Growing Popularity Catches Regulator’s Eye

Prepaid cards, which started out as simple gift cards from retail stores, have morphed into popular financial-management tools with functions that rival bank checking accounts. Now regulators are playing catch-up, with plans to roll out a rule this fall that would bring oversight of the sector closer to regulations covering banks. The coming rule from the Consumer Financial Protection Bureau marks the federal government’s first comprehensive effort to police the market, which caters to tens of millions of Americans, many of whom are lower-income and have either no or limited access to regular bank accounts. This year, nearly $300 billion is expected to be loaded onto GPR cards, almost double the amount in 2010. [The Wall Street Journal]

Subprime Credit Card Limits Reach 5-Year High

Total credit card limits for the subprime market reached a five-year high during the first half of 2016. These limits are now at $6.4 billion for subprime and deep subprime cardholders. This follows a Federal Reserve Bank of New York survey that found nearly half of subprime borrowers now have a credit card, which is quickly approaching pre-recession levels (60%). Despite the increasing card limits and card availability for subprime borrowers-defined as those with credit scores below 620-the delinquency rates for credit cards has declined since 2011. The delinquency rates for subprime borrowers over a five-year span dropped 6%. Overall delinquency rates across all markets have declined by 43% from the second quarter of 2011 to the second quarter of 2016. [LowCards.com]

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This Week In Credit Card News: Stopping Fraud With Selfies, Does Anyone Read Credit Card Agreements?

Credit Card Agreements: Profiles in Gibberish

Go ahead and admit it: You don’t read your credit card agreements. You probably can’t even remember the last time you picked your way through the entirety of one of those single-spaced, dripping-with-legalese contracts. Don’t sweat it. You’re not alone. Surveys show that about three-quarters of consumers never read the fine print of financial documents. And of those who actually make the effort, a significant proportion come away not understanding what they’ve been told. [Los Angeles Times]

MasterCard Seeks To Stop Online Fraud With Selfies, Fingerprints

MasterCard plans to launch new biometric technology for verifying customer identities during online shopping transactions in the coming weeks with merchants and banks. The company has been testing facial and fingerprint recognition software to combat the growing online fraud. [The Wall Street Journal]

A Third of All Americans Hacked in the Past Year

More than one-third of Americans (37%) experienced a computer virus, hack or other cyber attack in the past 12 months, according to a recent study. The most common attacks were viruses (69%). Of those who had been hacked, 42% were between the ages of 18 and 24. Only 22% were over the age of 70. These attacks were costly to consumers. The nationwide survey found the victims often had to spend money to recover. In 23% of the cases, victims spent between $1,000 and $5,000, while 56% spent less than $500. [LowCards.com]

What Your Credit Card Offers Say About You

Do the credit card offers you receive in the mail have photos of enticing holiday destinations and reward miles? If so, you should be flattered, since this means that credit card issuers believe you to be highly educated and financially sophisticated. But if you are receiving card offers with low teaser rates for introductory APR, you might take offense, since card issuers most likely do not view you as savvy. As more and more personal data becomes available, businesses are now able to target customers in a personalized and sophisticated way. On the bright side, that means you can get products and services that are tailored to your needs. The downside is that companies can also more effectively target your behavioral weaknesses, self-control issues or lack of attention to the fine print. [The Wall Street Journal]

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This Week In Credit Card News: Pentagon Cards Still Used At Strip Clubs; Issuers Up Cash Back Offers

Pentagon Credit Cards Still Being Used at Strip Joints

The Pentagon’s inspector general said safeguards still haven’t been put in place to protect taxpayer dollars from being used for unauthorized expenses. The IG office found that from July 2013 to June 2014, Pentagon personnel spent an unauthorized $952,258 at casinos. They dropped another $96,576 at places like Sapphire Gentleman’s Club, which advertises itself as the world’s largest strip club, “featuring 70,000 square feet of topless entertainment.” [CNN]

For Credit Cards, 1.5% Cash Back is the New Standard

Credit cards with 1.5% cash-back rewards rates are going from novel to normal. Today, consumers can get no-annual-fee cards that offer 1.5% cash back on every purchase from several major issuers, including Capital One, Barclaycard, Chase, Wells Fargo and U.S. Bank. Citi offers an even higher rate on the Double Cash card: 1% on every dollar you spend and another 1% on every dollar you pay off. If you avoid interest charges, these cards can earn you hundreds of dollars per year in rewards without requiring any extra spending. [US News]

Mobile Banking Vaults to Second Place in Consumer Preference

Mobile banking has leaped into position as the second-most-preferred form of banking, chosen by 18% of bank customers, up six points from last year and nearly double since 2014, according to a new survey. Online banking also rose as the most preferred banking method, however, with 55% of respondents saying they prefer to bank online–marking the eighth consecutive year that consumers have named the Internet as the most popular way to bank. The survey found that the number of people who preferred visiting a branch continued falling, dipping three points to 14%. ATMs were preferred by 6%, down seven points from 2015. [ABA Banking Journal]

Prepaid Card Gets First New Features After Glitch

Nearly a year after a technical glitch prevented its customers from getting access to their money, prepaid debit card provider RushCard is rolling out new features that usually aren’t available to low-income consumers. RushCard will introduce a revamped mobile-phone application that lets customers temporarily put their accounts on hold if they misplace their cards. The revamp will also give customers the option to open the app by authenticating it with a fingerprint for additional security. In May, RushCard agreed to pay $19 million to settle a lawsuit filed by consumers who were frozen out of their accounts last fall. [The Wall Street Journal]

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This Week In Credit Card News: Subprime Card Market Heats Up; Could We See Mobile Banking Fees?

Silicon Valley Lender Raises Nearly $50 Million for Subprime Credit Card Push

LendUp, the startup online lender that has attempted to reinvent the payday loan, is plotting to take on a more mainstream financial product: the credit card. By raising $47.5 million in an equity deal, it plans to roll out a credit card for subprime borrowers and compete with mass-market banks such as Capital One. Last year, LendUp started a limited release of a credit card aimed at similar borrowers, called the L Card. The new effort will expand that brand. Unlike rivals LendingClub and other established startups that aim to give loans to middle-to-upper-class households, LendUp has targeted less-creditworthy consumers who have more difficulty accessing bank loans. [The Wall Street Journal]

The Profitable Business of Lending to Subprime Borrowers

While fees are paid by credit card holders across the board, interest is charged only to those who carry a balance, which often are cardholders with poor credit, according to a report by the Consumer Financial Protection Bureau. The interest payments all cardholders make account for 80% of the total revenue card issuers receive from consumers. But while those considered prime borrowers generally are paying down debt, riskier consumers have been increasing their card balances: to $5,063, on average, from $4,891 one year ago, according to a separate study. As a result, card issuers continue to increase the availability of credit, particularly to millennials and other consumers with lower credit scores. About 10 million new consumers entered the credit card marketplace in the last year alone, the majority of which were subprime borrowers, according to TransUnion. [CNBC]

Mobile Banking Apps Are Worth More Than You Think

How angry would you be if your bank charged you to use its mobile app? A significant minority would be willing to pay up, according to a new survey of nearly 4,000 U.S. bank app users. 21% of people said they’d pay as much as $3 a month for the service, while up to 40% of people said they’d be willing to pay $1 a month. Banks could generate as much as $500 million more in annual revenue. [The Wall Street Journal]

Costco’s Credit Card Nightmare Just Got Even Worse

Costco’s marriage to Visa has been rocky pretty much from the start, and last weekend shoppers faced a new problem. On Friday evening, a number of Costco members received emails from Citi, the issuer of the new Costco Anywhere Visa Card, alerting them that their credit card accounts had been closed. Some members reported that they received emails addressed to other people that contained the last four digits of other users’ account numbers, raising concerns that their accounts had been hacked. [Business Insider]

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