Rising rates and rates on cards; Will your credit card rewards disappear?

Is Congress going to kill credit card rewards?

Credit card rewards are so common these days—so expected—that they seem untouchable. But that could change. Legislation making its way through Congress is intended by the sponsors to encourage “competition in electronic credit transactions.” But if lawmakers eventually pass the measure, known as the Credit Card Competition Act of 2022, opponents say it could also torpedo the rich rewards and benefits cardholders have enjoyed for years. “Will the consumer lose? Probably,” wrote Brian Riley of the Mercator Advisory Group. “Their rewards programs will dry up, just like with debit cards.” [NerdWallet]

More debt, higher costs: credit card borrowers face increasing charges

After a respite from the coronavirus era, Americans are again borrowing heavily to keep up with decades of high inflation on essentials like food, gas and housing. Credit card debt is rising at the fastest rate in more than 20 years, according to the Federal Reserve Bank of New York. Overall, Americans owe $887 billion on their credit cards, up 13% from a year ago. With the Fed raising rates quickly to contain inflation, households are also facing higher borrowing costs. Average credit card interest rates are at 18.7% at their highest level in 30 years and are likely to continue rising, according to Bankrate. [The Washington Post]

What’s in your wallet? Much less if Dick Durbin gets his way

Aside from earning a spot on Mount Rushmore from Senate tax hikes during his career, Durbin forcefully raided Americans’ wallets, especially their debit cards, in 2010 through an amendment to the Dodd-Frank Act. that his name. The Durbin amendment reportedly aimed to lower debit card transactions for consumers. What we have learned in that time is startling: limiting debit card costs led to higher costs for consumers, but greater profits for retailers. Banks responded to the loss of foreign exchange earnings by raising other rates and fees, eliminating free checks and wiping out nearly all the benefits and rewards they offered with their proprietary debit cards. Durbin’s “pro-consumer” legislation cost consumers billions, loss of benefits and benefits and cost millions from owning a bank account. [The Hill]

More brands are offering secure credit cards to customers during uncertain economic times

According to Experian and US Census data, more than 150 million people in the US are currently considered financially endangered. These consumers remain under pressure to manage their finances, from high inflation to economic uncertainty. Nearly one-third of U.S. consumers have a subprime credit score, defined between 580 and 669, including 40% of millennials, who make up “the highest percentage of subprime consumers of any generation.” In addition, an estimated 49 million U.S. consumers are classified as “invisible credit” or “unscored.” Businesses and consumers are facing a tumultuous macroeconomic environment, skyrocketing inflation and a looming recession. As a result, there is an opportunity for the credit landscape to shift, and the offering and use of secured credit cards are the solutions that will help brands and consumers alike. [PYMNTS]

Visa and Mastercard pull new government control over debit card routing

The Federal Trade Commission is investigating whether Visa and Mastercard’s security tokens restrict competition with debit card routing in online payments, according to people familiar with the matter. In recent years, the FTC has been investigating whether Visa and Mastercard are blocking merchants from routing payments through other debit card networks. The networks acknowledged an FTC investigation into regulatory filings in recent years. [The Wall Street Journal]

Here’s What Warren Buffett Says About Credit Card Debt

Millions of Americans use credit cards to pay for purchases, with the average cardholder owing nearly $5,800 in the first quarter of 2022 and nearly $900 billion in total credit card debt in the United States. But despite their popularity, credit cards can be dangerous if used incorrectly. Billionaire investor Warren Buffett has expressed his disdain for credit cards multiple times and has even said that he pays 98% of his own purchases in cash. Here’s what Buffett has said about credit cards and why he feels this way. [The Motley Fool]

Today is National Get Smart About Credit Day

National Get Smart About Credit Day on the third Thursday in October annually promotes learning about good credit. It is a national campaign in which voluntary bankers help young people to advise on responsible credit behaviour. The importance of sound financial management is something that can and should be learned at an early age. Instilling healthy credit habits can be one of the most valuable lessons a young person can learn. [National Day Calendar]

Profits of major banks fall, but consumers absorb the blow

Major banks are bracing for an economic slowdown but haven’t seen any major signs of trouble yet as consumer spending remained strong despite the dent the market turbulence had left in their latest quarterly earnings. Citigroup, JPMorgan Chase and Wells Fargo all said they had strengthened their reserves to avoid future losses on loans, a sign of potential problems with rising interest rates putting pressure on borrowers and high inflation limiting spending. [The New York Times]

Samsung Wallet extends mobile payment support to these 13 countries

Earlier this year, Samsung made its plans to make Samsung Pay and Samsung Pass more versatile by letting them live together. With the Samsung Wallet app, the company hopes to make it easier to access all your virtual IDs, passes and cards in one place. The app is already available in eight countries, but by the end of this year there will be a new wave with 13 more countries. In the coming months, Samsung will launch the Wallet app in Bahrain, Denmark, Finland, Kazakhstan, Kuwait, Norway, Oman, Qatar, South Africa, Sweden, Switzerland, Vietnam and the UAE. In addition to the markets where the app is already available, these are China, France, Germany, Italy, Korea, Spain, UK, and US. [Android Police]

Mastercard Will Help Banks Offer Cryptocurrency Trading

Mastercard wants to bring crypto to the masses by making it easier for banks to get involved. The payment giant plans to announce a program that will help financial institutions offer cryptocurrency trading. Mastercard will act as a “bridge” between Paxos, a crypto trading platform already used by PayPal to offer a similar service, and banks. Mastercard and Paxos will handle regulatory and security compliance, two main reasons banks cite for avoiding the asset class. Mastercard’s chief digital officer said polls still show demand for the asset, but about 60% of respondents said they’d rather test the waters through their existing banks. [CNBC]

Banks make mobile banking the consumer’s preferred financial tool

With the pandemic now endemic, are contactless digital tools and behaviors that helped us through that episode disappear so we can go back to how it was before? In a word, no. There are countless examples, but the use of online banking and mobile banking apps, which boomed in the first two years of the crisis, has now become a regular part of how we bank. [PYMNTS]

Green Dot, Bank Behind Walmart and Apple Debit Cards, Fires CEO

Green Dot, which manages the bank behind the debit cards offered by Walmart and Apple, has fired its chief executive officer. CEO Dan Henry will be replaced by George Gresham, the company’s chief financial and operating officer, according to a statement Monday. Henry has also resigned from the company’s board of directors. Based in Austin, Texas, the company operates the bank behind the Apple Cash card and Walmart’s MoneyCard. Founded in 1999, the company has more than 30 million accounts and its products are distributed in 90,000 retail locations across the US. [Bloomberg]

Chase Points are worth up to 50% more on Apple purchases thanks to this limited-time promotion

Calling all Apple enthusiasts: Now Through November 30, Chase cardholders can save a little extra this fall by redeeming points for Apple products through Chase Ultimate Rewards. Depending on which card you have, your points will be worth 10%, 25% or 50% more than normal thanks to this action. In other words, if you’ve been waiting for the right time to upgrade your iPhone, iPad, Apple Watch, or laptop, or get a head start on all your Christmas shopping, this is it. [CNBC]