Bread, Discover and JPMorgan Chase report higher credit card chargebacks
Three companies saw their higher credit card delinquency and charge-off rates rise in February. Bread Financial, Discover, and JPMorgan Chase reported in recent press releases and SEC filings that those numbers for February were higher than the previous month and the year before. Bread Financial said its delinquency rate was 6.0% in February, down from 5.8% in January and 4.4% in February 2022. Discover also recorded higher rates. Its credit card delinquency rate reached 2.74% in February, compared to 2.67% in January and 1.79% in February 2022. JPMorgan Chase said its credit card delinquency rate was 0.88% in February, higher than the 0.83% observed in January and the 0.72%. % that it recorded in February 2022. [PYMNTS]
A few warning signs that you might have a credit card problem
Here are 7 warning signs of problematic credit card use
There are several warning signs that you may be spending too much on your credit cards, and not all of them are obvious. You are rejected for balance transfers. You are at or near your spending limit. Minimum payments become difficult to track. You have no idea how much you owe. You hide your credit card expenses. You have more credit cards than you can track. Your credit card debt affects your financial life in other ways. [The Motley Fool]
Over 48% say having a credit card balance increases your credit score
A February survey from US News & World Report shows that nearly half of respondents believe that keeping a balance on a credit card improves your credit score. Luckily, almost 52% know that it doesn’t increase your score. And when you carry a balance, you pay compound interest on your purchases. Just over 16% of respondents do not know their credit score. More than 35% say their credit reports contain a breakdown of their credit score, but more than 56% knew their reports contained a list of their credit activity. Your credit score is not on your credit report. Just 47% incorrectly say that an increase in income leads to an increase in credit scores. Just over 40% correctly identify FICO as the score most often used by lenders. [U.S. News & World Report]
Visa, Mastercard $5.6 billion settlement with retailers confirmed
A federal appeals court on Wednesday upheld a $5.6 billion antitrust class action settlement with more than 12 million retailers that accused Visa Inc and MasterCard Inc of improperly setting credit card fees and of debt. The 2nd United States Circuit Court of Appeals in Manhattan has dismissed claims that a class action lawsuit should not have been certified due to confusion over who deserved compensation and that the $523 million in legal fees given to retailers’ lawyers were too high. [Reuters]
New CFPB report reveals credit habits of Buy Now, Pay Later users
Between the first quarter of 2021 and the first quarter of 2022, 17% of Americans borrowed using buy now, pay later, a new CFPB report on BNPL consumer usage indicates. Although the survey found that many BNPL users had relatively healthy personal finances, it concluded that BNPL borrowers were, on average, significantly more likely to be highly indebted, running low on their credit cards credit, to default on traditional credit products and to use high-interest financial services. services. [CNBC]
Amex bets on Millennials, Gen Z for growth
Coming out of the Great Recession, American Express was at a crossroads. Executives debated whether to eliminate connotations of exclusivity by serving a broader consumer base, or double the premium card space and remain more exclusive. Banking on its ambitious distinction, Amex opted for the latter. About 70% of Amex’s new cardholders last year acquired premium cards, which includes all of its cards with an annual fee. Millennials and Gen Z consumers made up three-quarters of this new group, a larger share than the company has seen in the past two decades. [Payments Dive]
USDA pilots contactless SNAP payments
In an effort to modernize its systems, the U.S. Department of Agriculture’s Food and Nutrition Service (FNS) will launch a pilot project in five states using contactless mobile payments for assistance program recipients. Supplemental Nutrition (SNAP). By allowing contactless and mobile payments, the FNS creates a more flexible program that takes into account the changing behaviors of consumers at all income levels. This move is a massive step forward in modernizing payment systems for government benefits and represents a positive shift to cater to both customers and retailers at established and growing technology points. Previous research from the North American PaymentsInsights study shows that 53% of Apple iOS users and 41% of Google Pay consumers have used a digital wallet over a 12-month period to make an in-store purchase. [Payments Journal]
The long-awaited Fed digital payment system will launch in July
The Federal Reserve’s digital payment system, which it says will help move money around the world faster, will debut in July. FedNow will allow bill payments, money transfers such as paychecks and government disbursements, and a host of other consumer activities to move faster and at a lower cost. Establishments that participate in the scheme will have 24-hour access, 7 days a week, unlike the system currently in place which closes on weekends. Proponents of the program say the money will flow to people much faster. For example, they said, government payments like those issued at the start of the Covid pandemic would have been credited to accounts immediately rather than the days it took to reach most people. [CNBC]
The good, bad and ugly of buying crypto with your credit card
As markets continue to fluctuate and volatility remains at an all-time high, nearly 47 million Americans who have never bought or traded crypto before said in a survey last year that they had the plan to do so this year. The growing interest in digital currencies and stablecoins has grown steadily over the past few years, with almost 56% of the US adult population reporting having bought, owned, traded or invested in some form of crypto in the past. . A 2021 survey by GamblersPick of 1,000 US crypto investors found that 25% of respondents purchased crypto using a credit card instead of fiat currency. Some exchanges have made buying crypto easier for buyers, accepting both 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 purchase crypto, either with Visa or Mastercard. [Coin Codex]
Cuban banks now accept Russian MIR bank cards
Several Cuban banks in Havana have now started accepting Russian payment cards MIR, the equivalent of Visa or Mastercard in Russia or UnionPay in China. ATMs now display the logo of the Russian payment system and offer the ability to withdraw funds from cards issued by Russian banks, meaning that Russian visitors to the island can access their money held in accounts in Russia . Money is provided in Cuban pesos, with the ruble/peso exchange rate currently around 1-1.5. [Russia Briefing]
Mobile payments as a driver of financial inclusion
Financial inclusion is the ability for 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 classified as unbanked in 2017. About half of the unbanked were women from poor households in rural areas or unemployed. It has been cited that exclusion from the financial system is one of the greatest obstacles to the fight against global poverty. In many developing countries, well over half of households do not have an account with a financial institution. Additionally, small businesses mentioned that easy access to affordable financing also hindered their ability to grow. Mobile payments could revolutionize financial inclusion by providing affordable and efficient transactions, creating a platform for business growth and improving security. [Payments Journal]