This Week In Credit Card News: Card Debt Is Rising; Buffet Investing More In Credit Card Industry

Americans are increasingly delinquent on their credit card debt. Some 4.4% of credit card debt became newly delinquent in the second quarter of 2017, up from about 3.5% in the second quarter of 2016. The country also hit a scary milestone earlier this month: Americans now collectively have the most outstanding revolving debt—often summarized as debt on credit cards—in U.S. history. Americans had $1.021 trillion in outstanding revolving credit in June 2017. This beats the previous record in April 2008, when consumers had a collective $1.02 trillion in outstanding credit revolving credit. [MarketWatch]

Warren Buffet’s Berkshire Hathaway is making additional investments in the credit card industry. Photo credit: Alex Wong/Getty Images

Warren Buffett’s Berkshire Validates Another Credit Card Company

Berkshire Hathaway is increasingly betting on the growing credit card industry. On Monday, Berkshire Hathaway disclosed it bought nearly 17.5 million shares of Synchrony Financial in the second quarter totaling nearly $521 million. That is a vote of confidence for the largest U.S. store credit card issuer, whose shares rose more than 4% on Tuesday. Berkshire Hathaway already owns $12.8 billion in American Express shares and smaller stakes in Visa and Mastercard.  Coupled together, the holdings increase Berkshire Hathaway’s exposure to credit cards, an industry where overall outstanding balances in June were up about 6% from a year ago. [The Wall Street Journal]

Credit Cards Are Clamping Down On Payments To Hate Groups

Some major credit card companies are clamping down on payments and donations to white supremacists and other hate groups. Visa and Discover have stopped allowing websites run by violent hate groups to use their cards to accept payments. On Wednesday, a group called Color of Change launched a web page on its site called “Blood Money” to highlight the credit card issue. The group claims that $20 million in donations was processed for about 100 named white supremacist and so-called “alt-right” groups in 2014 and 2015 alone. [New York Post]

Why Amazon Added Debit Card Rewards For Prime Customers

In June, Amazon announced a new reward program targeting Prime members who prefer to pay for their shopping with debit cards. The debit card reward program will earn shoppers 2% cash back, compared with 5% cash back for Prime customers paying with credit cards. The new reward program also has the potential to encourage Prime members to spend more on Amazon purchases. Prime members usually spend significantly more on Amazon shopping than do customers who are not part of the loyalty program. Considering Prime customers’ significant spending, the loyalty program is vital to Amazon’s retail success. It’s no wonder the company is adding perks to Prime to make it more appealing to shoppers. [Market Realist]

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