Higher rates of interest could cost US firms $380 billion
Companies across the U.S. are heading toward a refinancing cliff that might cost them billions in the brand new era of high rates of interest, threatening a “slow-developing crisis.” New research from global advisory firm Baringa has found that firms that refinance between this yr and 2030 pays $381 billion in additional interest costs on account of increased borrowing rates. That represents the most important increase in debt-related costs and the best cumulative interest payment ever seen by U.S. firms. The biggest expenses are expected to are available in 2024, as greater than $3 trillion in loans and bonds come due that yr. Companies that refinance that debt will likely pay $76 billion more in interest this yr than they might have under lower rates, Baringa said. [Fox Business]
High rates of interest cause great financial stress for consumers and businesses
The US economy grew more slowly in 1 than initially expectedst quarter
The U.S. economy grew more slowly in the primary quarter than initially estimated. The Bureau of Economic Analysis’ second estimate of first-quarter U.S. gross domestic product showed that the economy grew at an annualized rate of 1.3% through the period. This was down from the primary reading in April of 1.6% and consistent with economists’ estimates. The update to the first-quarter growth metrics “primarily reflected a downward revision to consumer spending,” the BEA said. Private consumption grew 2% in the primary quarter, in comparison with a previous reading of two.5%. The reading was well below fourth-quarter GDP, which was revised upward to three.4%. [Yahoo Finance]
PayPal plans promoting business with data from its thousands and thousands of buyers
PayPal hopes to fuel its growth by constructing an promoting network fed by something it already owns: data from its thousands and thousands of users. The digital payments company plans to construct an promoting sales business across the reams of knowledge it generates by tracking the purchases and overall spending habits of thousands and thousands of consumers who use its services, which include the more socially lively Venmo app. In January, PayPal launched Advanced Offers, its first promoting product that uses AI and the corporate’s data to assist merchants goal PayPal users with discounts and other personalized promotions. Advanced Offers charges advertisers only when consumers make a purchase order. Online marketplaces eBay and Zazzle have begun testing it. [The Wall Street Journal]
Walmart and Capital One end exclusive consumer bank card agreement
Capital One and Walmart announced Friday that they’ve ended the agreement that made Capital One the exclusive issuer of Walmart’s consumer bank cards. Walmart and Capital One launched their partnership in 2018 after the retail giant ended its two-decade-long partnership with Synchrony Financial. Capital One began issuing Walmart-branded bank cards in 2019. The announcement added that Capital One will retain ownership and management of the bank card accounts and that additional information will probably be made available to Walmart credit cardholders in the approaching months. The existing bank card portfolio represents roughly $8.5 billion in consumer credit. [Fox Business]
Visa and Mastercard must pay $197 million to settle ATM fee lawsuit
Visa and Mastercard have agreed to pay $197 million to settle a class-action lawsuit brought by thousands and thousands of consumers who accuse the financial payment firms of keeping fees for accessing money artificially high. Attorneys for the plaintiffs announced the proposed settlement in a filing Wednesday, opens recent tab in federal court in Washington, DC. The settlement affects consumers who’ve withdrawn money from bank-operated ATMs since 2007. Visa pays $104.6 million and Mastercard pays $92.8 million under the settlement. [Reuters]
25% of consumers have recently taken out a buy-now loan with later payment
Credit cards are essentially the most commonly used type of credit, with 66% of respondents having used them previously 12 months. At the identical time, 25% said they’d used BNPL services previously 12 months, in response to a survey by NerdWallet. BNPL programs often don’t require a credit check or an application process, making using these plans “so seamless that they are very easy for consumers to adopt.” Far fewer consumers, about 10%, had used a money advance app previously 12 months. About 6% said they’d used a payday loan previously 12 months. About 8% of adults within the NerdWallet survey said they’d used BNPL for necessities. An equal share, 8%, expect to make use of BNPL for necessities in the subsequent 12 months. [CNBC]
Credit card spending is the primary reason why 78% of Americans regret their debt
A majority of Americans are feeling financial regret as personal debt reaches recent highs. Around 78% reported feeling financial regret, with 21% saying their biggest regret was “accumulating too much credit card debt,” in response to a survey by Debt.com. Millennials regret their Credit debt essentially the most, and 45% said they felt guilty about “paying too much on their credit card.” Baby boomers were the least concerned, with only 10% regretting their bank card debt, despite having essentially the most. Nearly 24% of baby boomers have between $30,000 and $50,000 in bank card debt. In addition, 49% of respondents said they regret their bank card debt “always on their mind.” [Yahoo Finance]
Mastercard’s peer-to-peer crypto credential pilot program launches
Mastercard has launched its P2P crypto credential pilot program to streamline crypto transactions and eliminate user errors for purchasers. The test includes Mastercard’s exchange partners Bit2Me, Lirium, Mercado and wallet provider FoxBit. The lending giant’s crypto credential system assigns individuals human-readable “aliases” which can be verified by Mastercard, eliminating the necessity for users to depend on sending and verifying the long string of numbers and letters that characterizes traditional wallet addresses. [Coin Telegraph]
The value of mobile banking apps
According to our October 2023 U.S. banking habits survey, nearly 80% of U.S. banking customers ages 18-42 said mobile banking apps are the channel through which they learned a few bank’s offerings. That far exceeds those that cited other channels resembling bank web sites (58.4%) and social media (37.4%). Even amongst banking customers ages 43-77, greater than half learned about services through mobile apps. That means encouraging greater app usage will help banks maximize cross-marketing opportunities. [eMarketer]
Are you wealthy? This is how much wealth it’s good to be poor, middle class and wealthy
The U.S. Census Bureau and other financial sources provide insight into these thresholds. Here’s a breakdown of median net price by different economic classes: Poverty class (bottom 20%): Median net price is $6,030. Lower middle class (next 20%): Median net price is $43,760. Middle class (middle 20%): Median net price is $104,700. Upper middle class (next 20%): Median net price is $201,800. Affluent (top 20%): Median net price is $608,900. [Benzinga]
