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Bread, Discover, and JPMorgan Chase Report Higher Credit Card Fraud
Three companies saw higher delinquency on their credit cards and charge-off rates increase in February. Bread Financial, Discover and JPMorgan Chase reported in a recent press release and SEC filings that the numbers for this February were higher than those for any previous month and year before. Bread Financial said its delinquency rate was 6.0% in February, up from 5.8% in January and 4.4% in February 2022. Discover also saw higher rates. Its credit card delinquency rate stood at 2.74% in February, up from 2.67% in January and 1.79% in February 2022. JPMorgan Chase said its credit card delinquent rate was 0.88% in February, higher than 0.83 % seen in January and 0.72%. % recorded in February 2022. [PYMNTS]
Here are 7 Warning Signs of Using a Troubled Credit Card
There are several warning signs that you may be spending too much on your credit card, and they are not clear cut. You were rejected for a balance transfer. You are at or nearing your spending limit. Minimum payouts are getting harder to keep up with. You don’t know how much you owe. You hide your credit card spending. You have more credit cards than you can keep track of. Your credit card debt affects your financial life in other ways. [The Motley Fool]
Over 48% Say Carrying a Credit Card Balance Increases Your Credit Score
A February survey from US News & World Report showed that nearly half of survey respondents believe carrying a balance on a credit card improves your credit score. Fortunately, nearly 52% found it didn’t improve your score. And when you carry a balance, you pay compound interest on your purchases. More than 16% of respondents do not know their credit score. Over 35% say their credit report contains details of their credit score, but more than 56% are aware that their report lists their credit activity. Your credit score is not on your credit report. Exactly 47% are wrong to say that an increase in income results in an increase in credit score. Slightly more than 40% correctly identified FICO as the score most frequently used by lenders. [U.S. News & World Report]
Visa, Mastercard $5.6 Billion Settlement with Enforced Retailers
A federal appeals court on Wednesday upheld a $5.6 billion antitrust class action settlement with more than 12 million retailers who accused Visa Inc and MasterCard Inc of improperly charging credit and debit card fees. The 2nd US Circuit Court of Appeals in Manhattan dismissed claims that the class action should not have been passed because of confusion over who was entitled to compensation, and that the $523 million legal fees awarded to the retailer’s lawyers were too high. [Reuters]
New CFPB Report Reveals Users’ Buy Now, Pay Later Credit Habits
Between the first quarter of 2021 and the first quarter of 2022, 17% of Americans borrowed using buy now, pay later, a new report by the CFPB on consumer use of BNPL. While the survey found many BNPL users have relatively healthy personal finances, it concluded that BNPL borrowers are, on average, far more likely to be in debt, pivot on their credit cards, have arrears in traditional credit products, and use high-interest finance. service. [CNBC]
Amex Bet on Millennials, Gen Z for Growth
Emerging from the Great Recession, American Express was at a crossroads. Executives debated whether to drop the connotations of exclusivity by catering to a wider consumer base, or double the premium cardroom and stay more exclusive. Betting on its aspirational differences, Amex chose the latter. About 70% of Amex’s new cardholders last year obtained a premium card, including all of its cards which incur an annual fee. Millennials and Gen Z consumers make up three-quarters of the new cohort, a larger share than any company has seen in the last two decades. [Payments Dive]
USDA Trials Contactless SNAP Payments
In an effort to modernize its systems, the U.S. Department of Agriculture’s Food and Nutrition Service (FNS) will begin a five-state pilot using contactless mobile payments for recipients in the Supplemental Nutrition Assistance Program (SNAP). By allowing contactless and mobile-based payments, FNS creates a more flexible program that takes into account changing consumer behavior at all income levels. This move is a major step forward in modernizing the pay-to-benefit system and a positive change to meet customers and retailers at the juncture of an established and growing technology. Previous research from the PaymentsInsights North America study showed that 53% of Apple iOS users and 41% of Google Pay consumers used a digital wallet in a 12 month period to make an in-store purchase. [Payments Journal]
Long Awaited Fed Digital Payment System to Launch in July
The Federal Reserve’s digital payments system, which it promises will help speed up the movement of money around the world, will launch in July. FedNow will enable bill payments, money transfers such as payroll and government disbursements, and a number of other consumer activities to move more quickly and at lower costs. Institutions participating in the program will have access seven days, 24 hours, as opposed to the current system which closes on weekends. Supporters of the program say it will get people money a lot faster. For example, they said, government payments like those issued in the early days of the Covid pandemic would be credited to accounts sooner rather than the days it would take to reach most people. [CNBC]
The Good, The Bad, And The Ugly Buying Crypto With Your Credit Card
As markets continue to fluctuate, and volatility remains all-time high, nearly 47 million Americans who have never bought or traded crypto before said in a survey last year that they intend to do so this year. The growing interest in digital currencies and stablecoins has steadily increased over the past few years, seeing nearly 56% of the US adult population saying they have bought, owned, traded, or invested in some form of crypto in the past. A 2021 survey by GamblersPick of 1,000 American crypto investors found that 25% of respondents had purchased crypto using a credit card, not fiat currency. Some exchanges make it easy for buyers to buy crypto, accepting debit and credit cards as a form of payment. Exchanges such as Pionex, Uphold, Bybit, Binance, CoinSmart, and Coinmama, among others currently allow users to buy crypto, either with Visa or Mastercard. [Coin Codex]
Cuban Banks Now Accept Russian MIR ATM Cards
Several Cuban banks in Havana have now started accepting Russian MIR payment cards, the equivalent of Visa or Mastercard in Russia or UnionPay in China. ATMs now display the logo of the Russian payment system and provide an option to withdraw funds from cards issued by Russian banks meaning Russian visitors to the island can access their money held in accounts in Russia. Money is provided in Cuban Pesos, at the current Ruble/Peso exchange rate of around 1 to 1.5. [Russia Briefing]
Mobile Payments as a Financial Inclusion Engine
Financial inclusion is the ability of individuals and businesses to have access to financial products that are affordable, appropriate and delivered in a sustainable manner. According to a World Bank report, almost a third of adults were still categorized as unbanked in 2017. About half of the unbanked were women from poor rural households or outside the labor force. It has been cited that exclusion from the financial system is one of the biggest hurdles to tackling poverty on a world scale. In many developing countries, more than half of households do not have an account at a financial institution. What’s more, small companies say that easy access to affordable financing also hinders their ability to grow. Mobile payments can revolutionize financial inclusion by providing affordable and efficient transactions, creating a platform for business growth, and increasing security. [Payments Journal]
