More Americans are trading down due to inflation
A new report shows it’s not just lower-income consumers trying to stretch their dollars as inflation continues. According to a new survey of 4,000 people by consulting firm McKinsey, nearly three in four adults are trying to cut spending. Sixty percent of respondents said they have reduced the number of items they buy, while 44% have put off a purchase. And 37% have switched to shopping at cheaper retailers or are more likely to seek discounts. [CU Today]
Nearly half of adults in America have at least one unused gift card
Nearly half of Americans hold onto $21 billion in unused gift cards, store credits
Even as many people struggle to stretch their income amid high inflation, it turns out that there is money they already have that they are likely to overlook: unused gift cards. According to a new survey from CreditCards.com, 47% of people currently have at least one unused gift card, voucher or store credit. The average unused amount is $175 per person, compared to $116 last year. For the entire adult population of the US, that could amount to 21 billion dollars. [CNBC]
CFPB strives for greater credit card transparency
The Consumer Financial Protection Bureau wants to revamp the way it collects credit card information to “fuel competition” and empower consumers when considering which credit cards to apply for. One of the changes the CFPB is considering making to its investigation of credit card terms and conditions, which collects data from issuers about their credit card plans, could force one “the top 25 card issuers to submit data on each of their credit cards for general purposes. Currently, each major issuer only shares information for its card with the largest number of customers and involves a network such as Visa or Mastercard. Other potential changes include requiring issuers to provide annual median percentages by credit score, collecting information on credit cards targeting specific groups, and allowing more entities to participate in the survey. [Payments Dive]
Cryptocurrency has been touted as the key to building Black Wealth. But critics are skeptical
A study released earlier this year by Charles Schwab and Ariel Investments found that black Americans were more likely than white Americans to invest in cryptocurrency. The study highlights data showing that black investors are less likely than white investors to believe that cryptocurrency is a risky investment, despite the extreme volatility of cryptocurrency, black people, the study says, are also more likely to make investment decisions based on social media or other less credible sources. The inequality makes black investors disproportionately vulnerable when the cryptocurrency market collapses. Critics argue that black Americans are lagging behind their white counterparts in financial literacy, which they believe is key to making smart cryptocurrency investment decisions. Still, social media influencers, black celebrities, athletes and conference organizers continue to work to attract more black investors to cryptocurrency, touting their own financial gains. [CNN]
After a year-long dip, US consumer spending power will return in 2023
After a year-long dip, household cash flow will begin to grow again right after Christmas and accelerate into the new year, according to new research by analysts at Goldman Sachs. These gains will offset a year of negative growth of about $600, or 4.2%, in household discretionary cash flow, according to Goldman’s analysis. The biggest driver of cash flow improvement next year, he said, will be wages. [CNBC]
Visa Tokens Put Payments in Giant Physical Cards Into Circulation
Visa said it has issued more than 4 billion network tokens worldwide through its security technology Visa Token Service, surpassing the total number of physical cards in circulation. VTS replaces 16-digit Visa account numbers with a token that only Visa can unlock, protecting underlying account information. The service’s popularity, driven by the promise of safer online transactions, matches the surge in online spending since the global outbreak of Covid-19. E-commerce volume has grown by more than 50% since the start of the pandemic, the world’s largest payment processor said in a statement citing data from the U.S. Department of Commerce. [Reuters]
Amex Brings Back Balance Transfer Offers
American Express has scrapped all of its 0% APR balance transfer offers during the pandemic, but it looks like they’re trickling in again. Now new cardholders can take advantage of an introductory 0% APR on balance transfers on two American Express cards, the Amex EveryDay Credit Card and the Amex EveryDay Preferred Credit Card. [Forbes]
Credit card customer satisfaction is on the rise, but there are many warning signs
After falling for two consecutive years, credit card customer satisfaction is rising again, according to the JD Power. Overall satisfaction improved by five points to 810 on JD Power’s 1,000-point scale. The study authors noted that the improvements were especially significant in areas such as credit card terms, benefits, services and communications. The report classifies most credit card holders (57%) as financially unhealthy, an increase of four percentage points from 2021. Nearly a quarter of consumers (22%) say they are financially worse off than a year ago. The highest inflation rates in 40 years and near-record balances on credit cards and credit card interest rates are undoubtedly a major contributor to this slump. [Bankrate]
Walmart Unveils Rewards Program for Walmart+ Members
Walmart has launched Walmart Rewards as a new benefit to its Walmart+ membership. Shoppers can earn and redeem rewards both in-store and online. For online shoppers, customers can tap the “add reward” option under eligible items on the Walmart site or app to claim the savings and then apply their reward balance to their purchase at checkout. The item-specific rewards, powered by Ibotta Performance Network, come at a time when Walmart is amplifying the benefits of Walmart+. [Grocery Dive]
Crisis clues to cost of living Buy now, pay later UK FCA warning
People responsible for misleading ‘buy now, pay later’ ads could face up to two years in prison, Britain’s financial watchdog warned Friday when it ordered companies offering the loans to stop encouraging “impulse buying” and fees for late repayment. As the cost of living crisis deepens in Britain, the Financial Conduct Authority has told so-called BNPL firms and the British Retail Consortium that the benefits of the interest-free, short-term loans have been highlighted on the spot in advertisements without fair and clear indications of relevant risks. [Reuters]
India lifts ban on American Express
India has lifted business restrictions on American Express, allowing the US giant to regain new customers in the South Asian market after the company demonstrated it was “sufficiently compliant” with local data storage regulations. In a series of steps last year, the Reserve Bank of India indefinitely banned Mastercard, American Express and Diners Club from issuing new debit, credit or prepaid cards to customers for failing to comply with local data storage rules. The local data storage rules, unveiled in 2018, require payment companies to store all Indian transaction data on servers in the country. Visa, Mastercard and several other companies, as well as the US government, have previously asked New Delhi to reconsider its rules, which they say were designed to give the regulator “unlimited supervisory access”. [Tech Crunch]
Binance Partners With Mastercard To Roll Out Prepaid Crypto Card
In partnership with Mastercard, crypto giant Binance is launching its prepaid card that offers cryptocurrency “rewards” on customer purchases. The alliance will see Binance roll out its crypto debit card in Argentina, the first country in Latin America to have the product. The Binance Card allows users in the region with a valid national ID to make purchases and pay bills with cryptocurrencies. The new offering provides customers with an easy way to acquire cryptocurrencies without paying fees or navigating the sometimes complicated onboarding processes on exchanges. The card also offers other benefits such as access to exclusive offers at select merchants and comes with no annual fee or foreign transaction fees. Binance debit card works the same as any other debit card, except it is not linked to a mobile banking app, but to a crypto wallet. [Finance Feeds]
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.