Why do Americans reduce their bank card debt?
U.S. households experienced congestion Credit card debt The increase in revolving debt was significantly slower in March than in previous months, leading to the smallest increase in revolving debt since 2021. Banks have develop into more selective about who they lend to lately, making it harder to get a bank card. Lenders are growing concerned that they will not be repaid as high rates of interest strain household budgets and impact the job market as a part of the Federal Reserve’s efforts to curb inflation. [Investopedia]
Lenders are increasingly concerned that they are going to not be repaid on account of high rates of interest
CFPB official urges consumers to think about small bank card issuers
Consumers should exercise caution when selecting their next bank card, in line with a recent blog post from the CFPB. In the post, Julie Margetta Morgan, CFPB deputy director of research, oversight and regulation, reminds readers that the ten largest bank card corporations alone manage 83% of outstanding bank card debt and that lots of the biggest card issuers offer cards which are related to the worst Conditions, the very best rates of interest and the very best late payment interest. “In comparison,” she wrote, “smaller credit card companies tend to offer far better interest rates: Across all credit levels, small businesses offered interest rates that were between eight and 10 percentage points lower than larger companies.” Although she urged U.S. consumers to to at the very least consider examining cards issued by “small banks and credit unions.” [PYMNTS]
Why rewards bank cards is probably not price it for everybody
The thrill of chasing rewards reveals its true colours. It’s greater than just the immediate drain on our wallets through fees or less generous reward offers. Real costs seep into our spending habits and subtly entice us to spend more with the promise of earning more, distorting our financial priorities. Ultimately, the seek for rewards requires a reality check: are we actually winning, or are we just playing into the hands of those that make the foundations? These rewards are only really worthwhile in the event you’re the form of one who zeros out your card balance every month. If you miss that mark, any hopes of benefiting from those points can be dashed by interest charges faster than you’ll be able to say “cashback.” [The Motley Fool]
Klarna is joining the race for top-of-wallet status within the USA with its recent card offering
Klarna is the most recent player within the US market to launch a brand new card offering and open its waiting list to American consumers. Like its European version, the Klarna card allows each in-store and online payments and is linked to users’ existing bank accounts. Unlike the “Pay in 30 days” or “Pay in 3” options, all purchases made with the cardboard are consolidated right into a single monthly statement, which offers various payment terms, including interest-free full payment, early payment or extra time payment with interest. However, failure to fulfill payment deadlines incurs penalties and poses a threat to users’ creditworthiness, a scenario harking back to missed payments reported by BNPL services to credit bureaus. Continued missed payments may end in debt collection. [Tear Sheet]
Mastercard joins US banking giants to develop tokenized payments
Mastercard joins US banking giants to develop distributed ledger technology for bank payments using tokenization. The corporations will test a shared ledger technology called the Regulated Settlement Network. The project goals to extend the efficiency of cross-border payments and reduce the likelihood of errors and fraud. Ten banking giants are participating in testing the brand new technology: Citi, JPMorgan, Mastercard, Swift, TD Bank, US Bank, USDF, Wells Fargo, Visa and Zions Bancorp. [Crypto News]
“Phantom debt” from “buy now, pay later” programs is a $700 billion black hole that economists usually are not bearing in mind
A Wells Fargo analyst also pointed to a private finance characteristic that is largely ignored within the industry: individuals who buy products – which contribute to higher sales for brands – but don’t pay the complete amount on the time of sale. Instead, these products are paid for in installments over an extended time period. The problem with this, at the very least for economists, is that the larger BNPL platforms often refuse to share their customers’ purchasing behavior with some or all credit reporting agencies because they fear that their customers’ activities could ultimately harm their credit scores. BNPL lenders might also report some, but not all, of their data. For example, within the UK, BNPL providers are required to reveal a customer’s credit and repayment history for products with a brief repayment window or multiple smaller payments across different accounts. This black hole of knowledge between BNPL lenders and credit agencies world wide is why Tim Quinlan, senior economist at Wells Fargo, coined the term “phantom debt.” [Fortune]
CFPB report highlights consumer frustration with bank card rewards programs
The CFPB released a brand new report that found consumers are experiencing quite a few problems with bank card rewards programs. Consumers tell the CFPB that rewards are sometimes discounted or denied even after program conditions are met. Credit card corporations focus their marketing efforts on rewards like money back and travel moderately than low rates of interest and costs. Consumers with revolving balances often pay much more in interest and costs than they get back in rewards. Credit card corporations often use rewards programs as “bait and switch,” hiding terms in vague language or small print and changing the worth of rewards after people enroll and earn them. The growth of co-branded bank cards and rewards programs that allow consumers to transfer miles or points to merchants has created recent problems. [CFPB]
Wells Fargo launches Signify business bank card with 2% money back
Launched in May 2024, Wells Fargo’s Signify Business Cash Card is a bank card geared toward small business owners that provides 2% money back on purchases without charging an annual fee. It can be available to recent and existing customers in any respect Wells Fargo branches starting in mid-May. However, existing Wells Fargo customers can apply online immediately. You have the chance to earn the next welcome bonus: $500 money reward bonus while you spend $5,000 on purchases in the primary 3 months. [Fortune]
Global mobile banking malware will increase by 32% in 2023
According to Kaspersky’s annual Financial Threats Report for 2023, global mobile banking malware attacks increased by 32% in 2023, highlighting the growing threats to digital financial assets. Android users saw the biggest increase in mobile banking Trojan attacks, up 32% in comparison with 2022. The report found that financial phishing attacks remain a big threat, with e-shop brands are considered the most important phishing lure. PayPal phishing also increased. Additionally, cryptocurrency phishing saw a 16% increase year-over-year, with scammers often imitating cryptocurrency exchanges or offering coins under the guise of massive corporations like Apple. [Daily News Egypt]
Retail shoppers pay with debit cards in stores, but pay with credit online
According to an October survey of greater than 2,100 U.S. consumers, 44% of respondents had paid for his or her most up-to-date in-store retail purchase with a debit card, while 28% paid with a bank card. In contrast, 41% of consumers surveyed had paid for his or her most up-to-date online purchase with a bank card, a better proportion than every other payment method, while 36% used a debit card. [PYMNTS]
