U.S. Credit Card Debt Closed 2018 at a Record $870 Billion
U.S. credit card debt hit the highest level ever, $870 billion, as of December 2018, according to the data from the Federal Reserve. Nearly 480 million credit cards are now in circulation, up by more than 100 million since hitting bottom after the recession a decade ago. About 37 million credit card accounts had a 90+ days delinquent mark added to their credit report last quarter, an increase of about two million from the fourth quarter of 2017. In aggregate, credit card limits rose for the 24th consecutive quarter, with a 1.5% increase in the fourth quarter of 2018.
Millions Of Credit Card Holders Never Switch Cards And Shun Free Flights, Hotel Rooms
A CreditCards.com survey found that 53 million Americans have never switched the card they use most often, preventing them from taking advantage of benefits and rewards offered by other cards. Another 16 million Americans last switched cards 10 or more years ago, and only 34% of cardholders swapped their most frequently used card within the past three years. Rewards points or cash back are the benefits that keep American cardholders most loyal to their go-to card. Among those who favor rewards, more than two-thirds prefer cash back. Only 5% said they prefer airline miles for free flights, and only 2% said their rewards priority is hotel points for free lodging stays.
Kroger Bans Visa Cards at 250 Additional Stores
Kroger said it won’t accept Visa credit cards at a second subsidiary, as the nation’s largest grocery story chain escalates its squabble with the credit company over transaction fees. Kroger said it would stop accepting the cards at its Smith’s Food and Drug stores as of April 3. That chain owns 142 supermarkets and 108 gas stations across seven states. This is a significantly larger ban than the original Visa ban announced last year at Foods Co, which has 21 stores and five fuel centers, and it again raises the question of whether Kroger is willing to expand the Visa ban to its flagship stores. Kroger has 2,800 stores under various names.
Mobile Consumers Make Twice as Many Purchases by App than on Mobile Web
A new report shows that mobile shoppers are browsing more than before with a 61% increase over 2017. Shoppers are also making 108% more purchases using apps than by mobile web over the holidays. Shoppers were making more repeat purchases and spending more in-app than on mobile web. Consumers spent 121% more in 2018 compared to the same period in 2017.
Big Banks J.P. Morgan, Wells Fargo, and Bank of America Are Pulling Out of Lower-Income Neighborhoods
Big banks have been closing branches in lower-income areas and shifting more of their attention to wealthier ones, according to a new report from Bloomberg. Overall, there’s been a trend among the biggest banks–specifically J.P. Morgan Chase, Wells Fargo, and Bank of America–to reduce their branch networks. Relying on ATMs and online banking is less expensive. According to S&P Global data, banks have shut 1,915 more branches in lower-income areas than they opened between 2014 and 2018, with J.P. Morgan, Wells Fargo, and Bank of America at the front of the trend. There are broad implications for neighborhoods when branches close. Less competition means fewer choices for banking services and, potentially, higher costs as a result.
Mexican Central Bank in Talks with Amazon about New Mobile Payments
Mexico’s central bank is in talks with Amazon to launch a new government-backed mobile payment system that would allow consumers to pay for online purchases using QR codes. It would be the first time the world’s largest online retailer offers such scanning technology in Mexico and could eventually open a new customer base in a nation where more than half of the population has no bank account. The payment, known as CoDi, is being built by central bank Banco de México, known as Banxico. CoDi will allow customers to make payments online and in person through smartphones free of charge using QR codes. It aims to bring more people into the formal financial sector.
Why Don’t All Retailers Accept Visa, American Express, Discover, Mastercard Credit Cards?
American Express and Discover have done a great job of building up their acceptance rates in recent years, but they still don’t enjoy the near-universal acceptance of Visa or Mastercard. Why aren’t American Express and Discover accepted as much as the other two? It comes down to fees. American Express’ swipe fees are roughly 1% higher than those of the other major issuers, according to several reports. Discover is generally not as expensive as American Express for merchants to accept, but it still generally charges more than Visa or Mastercard, which is why Discover is number three in terms of acceptance.
How Many Consumers Are Using a Debit Card To Make a Purchase?
A new survey by Mercator Advisory Group reveals that 54% of all respondents use debit cards for purchases and that figure has declined steadily since 2011, the year following the enactment of the Durbin Amendment. Today, more U.S. consumers, especially seniors are more likely to use credit cards than any other payments in stores. Young adults and adults whose annual household income is less than $75,000, however, are still more likely to use debit cards than credit cards in stores. Only half of debit card users report using their card for online purchases. The perception of greater online security with credit cards (41%), fear of checking account compromise (30%), and lack of rewards when using debit cards (30%) are the main reasons consumers do not use debit cards online.
Amazon, Berkshire, JPMorgan Healthcare Company to be Called Haven
Amazon, Berkshire Hathaway and JPMorgan Chase said their joint healthcare company would be called Haven and will focus on better primary care access, simpler insurance benefits and more affordable prescription drugs for their employees. Haven will be tasked with improving healthcare for the three companies’ 1.2 million employees and family members in the United States, but will also share its findings with outsiders, according to its website, launched on Wednesday.
Synchrony Financial Acquires Pets Best
Synchrony has acquired Pets Best, a pet health insurance industry pioneer. Pets Best will operate under Synchrony’s CareCredit platform which offers health, wellness and personal care credit products that can be used to pay for a variety of healthcare expenses including veterinary care. Pets Best provides CareCredit with an immediate entry point into the rapidly growing pet insurance market, building upon CareCredit’s decades of expertise in the veterinary market. As the cost of pet care increases, pet owners are increasingly seeking better access to care.
Barclays to Merge BPay, Pingit Products as Banks Fend Off Apple
Barclays is preparing to merge its wearable mobile payments product BPay with its more popular Pingit app, after it struggled to attract users. The two products currently require retail customers to download and maintain two separate apps: one for Pingit, which supports peer-to-peer transactions and international money transfers, and another for BPay, which lets people top up pre-paid credit onto wearable accessories for making contactless payments. The merger comes as retail banks try to adapt to the needs of consumers increasingly used to using their smartphones to manage their finances.