This Week in Credit Cards
Yes, the media is already talking about the holiday season (didn’t they used to wait until Thanksgiving?) which means lots of talk of credit cards and spending. Here are the highlights for the week:
- Want more evidence that consumers are using less cash and shifting to debit/credit cards? VISA and MasterCard report record earnings (WSJ):
“Consumers are spending more and using cash less, a combination that is driving profits higher at MasterCard Inc. and Visa Inc., the largest credit-card payment networks in the world…Visa and MasterCard are benefiting from a migration from cash and checks even as consumer-spending growth remains sluggish in parts of the world.”
- The digital payments world is still quite fragmented; read about this reporter’s week without cash or credit cards (Quartz):
It seems like a terrible idea, but I’m on a mission: I’m going to spend the whole week using digital payments, to find out if, as many tech pundits have asserted, we’re headed toward a cashless society. According to the research firm Gartner, mobile payments will top $720 billion a year by 2017, up from $235 billion last year. Wikipedia lists 75different online payment service providers internationally, from user-to-user mobile payments like Square Cash or Venmo, or user-to-vendor like LevelUp. Apple Pay, introduced last month, promises to add to the digital payment gold rush.
- Video interview: Millenials using credit cards less than older generations (CNBC); see video at top of the webpage.
- That didn’t take long…Apple Pay (one million credit cards registered in 3 days) out for a few weeks already has competition (NY Times):
Analysts said disabling acceptance of Apple Pay was a way to favor a rival system that is not yet available but is being developed by a consortium of merchants known as Merchant Customer Exchange, or MCX. Rite Aid and CVS are part of that consortium, not part of the group of retailers that had teamed up with Apple on its payment system.
- Video: Should kids have credit cards (CBS)?
- What are benefits and risks to giving a teen a credit card (US News and World Report)?
- Wondering what is driving mass adoption of new credit cards (other than the almost daily news of hacks at major retailers( (USA Today)?
Part of what’s driving the change is an attempt by the credit card associations — made up mostly of banks — to shift the liability for fraudulent charges from the credit card issuers to merchants if merchants don’t adopt the new technology. If merchants adopt before October 2015, banks have agreed to retain the liability for the charges. The deadlines for adopting debit cards and ATM cards with chips will come later.
- Good reminder of how sophisticated digital crooks can be (ConsumerAffairs):
A strange case of credit card fraud out of Brazil has American banks and credit-card companies arguing over just who’s responsible for eating the cost — and unintentionally provides a reminder that, while chip-based credit cards might be less insecure than magnetic-strip cards, determined thieves can still find ways around that.
- And these digital crooks have us running (or charging) scared (Gallup):
As the list of major U.S. retailers hit by credit card hackers continues to grow this year, Americans are more likely to worry about having credit card information they used in stores stolen by computer hackers than any other crime they are asked about. Sixty-nine percent of Americans report they frequently or occasionally worry about this happening to them.
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About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.