Credit Card Trends

  • Your next debit card will likely be “chipped.”  Bank of America leading the way (MarketWatch)

Bank of America Corp. is the first major U.S. bank to issue debit cards with chip technology, a move that other banks are sure to follow, according to financial industry experts.  The bank says it already offers the chips on credit cards and will issue cards with chips when replacing expired cards and to new customers.

  • Watch out for those charges on your credit card (WSJ):

When consumers sign up for a credit card, most issuers will offer so-called identity-theft protection services and credit-monitoring services that are supposed to inform cardholders of possible signs of fraudulent activity on their cards. The pitches have picked up over the past four years as large data breaches at retailers and elsewhere have increased, compromising more consumer information. Issuers’ customer-service call centers also pitch the services to existing cardholders, as do many automated call services customers contact to activate their cards.

One problem: Many issuers have been enrolling new cardholders in these services without the proper authorization, and those consumers are often unaware that they’ve signed up for them or that they’re being charged.

Credit history and credit score have become important barometers of personal responsibility, says Jean Chatzky, contributing editor for consumer-finance site Bankrate.com. Because your credit has wide-ranging implications—potentially affecting everything from your ability to rent an apartment to job prospects—it’s important to start on the right foot when building credit, Ms. Chatzky says.

  • More pre-approved credit card offers landing in mailboxes (Minneapolis Star Tribune); be sure to watch out for “the Catch:”

Credit experts say card offers are hitting the mailbox at rates not seen in a long while. Some offers are so-called “preapproved” card offers designed to net new customers. Others are rich balance transfer offers intended to convince existing cardholders to pick that card for the next purchase. “Issuers are finding some better times out there,” said Bill Hardekopf of Lowcards.com, citing lower delinquency rates and overall credit card balances as two reasons for the improved environment. Plus, with fewer consumers carrying a credit card balance, issuers have to make up lost profit in the form of fees. In other words, they need to figure out ways to get consumers to use their credit cards more.

  • Want to earn 5% back on all of your purchases?  Use a rotating set of credit cards that reward different types of purchases.  Warning:  Requires some diligence! (Time Magazine)

More than half of cash back credit cards return just 1%,according to CreditCards.com. But you can do better—a lot better, in fact.  Being strategic about which credit cards you choose and how you use them can have significant payoff, we discovered while making picks for Money’s 2014 Best Credit Cards.  No one card will give you back 5% on everything you buy, but you can earn about that much on average if you, ahem… play your cards right.

  • Don’t miss out on credit card perks that are often not publicized (NY Times):

But many major credit cards also offer a menu of lesser-known, potentially helpful perks — some offered by the issuing bank and others provided by the card payment networks. These ancillary benefits, typically provided at no extra cost, can include rental car insurance, extended warranties, damage protection for your cellphone, lost-luggage coverage and even free admission to museums.

  • Just because someone approves you for a credit card, doesn’t mean you should take it:  subprime credit cards on the rise (American Banker)…”It’s becoming easier for Americans with low credit scores to get a credit card, according to a new report.”
  • Want a lower credit card interest rate or to have some fees waived?  Just ask…(USA Today):

Many credit card holders who request lower interest rates or a break on late payment fees on their cards are getting what they ask for, according to a report out today from CreditCards.com

Credit card issuers waived late fees for 86% of the card holders who asked them to, and about two-thirds (65%) of card holders who requested a lower interest rate received it, says the survey of 983 major credit card holders in the USA.

  • Inspiring tale of a family who overcame $100K+ in credit card debt and how they did it (Business Insider):

His family was $109,000 in credit card debt. “It wasn’t any one thing. It was really just our lifestyle,” he explains. “We didn’t have a good handle on money and overspent for a number of years. We lived paycheck to paycheck, using credit to cover ourselves. I remember always having a credit card and using it for whatever I needed.”

Brandow says his parents taught him financial basics like balancing a check book, but he doesn’t remember learning about credit and debt. So he set out to teach himself about money.

  • What are consumers afraid of?  After Target and now Home Depot, not all too surprising (BenefitsPro):

A Honeywell consumer trust survey reveals that trust has become a huge issue after major hacks at retailers such Target, Neiman Marcus and Michaels resulted in millions of consumers affected. And consumers don’t believe that it won’t happen again; 60 percent say such events will increase over the next year.

In fact, more consumers (93 percent) are afraid that their credit/debit card data will be compromised than are afraid of health problems (84 percent) or retirement savings worries (81 percent) — concerns that one might expect to rank higher because of their importance in life. And they’re more worried about retail breaches than they are about the privacy of their online communications (86 percent), which is remarkable considering the amount of press that issue has gotten.