Credit Card Trends

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Sep 22, 2014

Highlighting some important trends in the credit card industry (cybersecurity is on the minds of many after the Home Depot security breach):

How a bank account hack has a consumer reconsidering the safety of the debit card (Boston Globe):

With debit cards, the bank can take at least a week to complete its investigation into fraudulent withdrawals, and during that time, you’re actually out the money. And if you’re like me, there’s the anxiety of checking your account twice a day to see if that money has been refunded.

Conroy said she rarely uses her debit card, and only when she needs cash from a bank ATM. She doesn’t send her debit card off with the bill at a restaurant. She never uses freestanding ATMs in a hotel, since they tend to be located in isolated corners, where thieves can install skimming devices easily.

She warns that consumers will probably see a rise in debit card thefts because credit cards are becoming tougher to crack as institutions replace magnetic strips with safer chip and pin technology. By the end of 2015, 70 percent of credit cards will be chip-secured. Debit cards, which are more complex and controlled by thousands of individual banks, probably won’t have the same security until 2018, Conroy said.

Take a peek into the Amazon.com of stolen credit card numbers (Businessweek):

Rescator is the Amazon.com of the black market—an efficient, easy-to-use purveyor of reliable stolen credit card numbers that cybercriminals can purchase in bulk. The account numbersreleased on Sept. 2 were most likely pilfered from a data breach of almost all of Home Depot’s U.S. stores, first reported by security blogger Brian Krebs on the same day and confirmed by the company on Sept. 8.

Credit card companies rolling in the dough again (despite these increases in fraud) (Credit Union Times):

Net card portfolio revenue is the highest it has been since 2008, said Robert Hammer, founder and CEO of the Thousand Oaks, Calif.-based R.K. Hammer, a bank card advisory firm with clients in 50 countries including 15 of the top 20 bank credit card issuers in the U.S, according to the company’s website.

“After the brutal beating taken in recession years, capital has been replenished, dividends have been restored, marketing investment in the business has resumed and the loan losses have returned to more normalized levels. The card business is back,” Hammer wrote in a statement.

Will Apple Play replace credit cards?  Not so fast says Wired:

Apple Pay—a service that lets you pay for stuff both in stores and online using your iPhone—is certainly the biggest threat yet to the old fashioned credit card. It’s available to anyone on the latest iPhone, and you can set the thing up simply by pointing it to the credit card number you’ve already stored on Apple’s iTunes service. For many pundits, this is the service that, unlike similar tools from PayPal, Google, and others, will push mobile payments into the mainstream. But a little perspective is required here.

“The adoption of mobile payments is going to be an evolution, not a revolution,” says Denee Carrington, an analyst with research house Forrester Research who tracks the digital payments market. “Even if Apple Pay does incredible well, in the grand scheme of things, it will still be just a drop in the bucket.”

Credit Cards offering more rewards (MarketWatch):

“Credit cards have become more and more generous when it comes to offering deals to consumers to entice them to sign on, according to a new study.  As the credit card landscape becomes more and more competitive, credit card issuers are giving better rates and more points with purchases to consumers, according to a study by CardHub.”

Home Depot breach involved over 50 million credit cards (Fortune):

“Home improvement retailer Home Depot Inc said 56 million card details were likely stolen in a data breach between April and September at its stores in the United States and Canada.”

On the legislative front, Congress considering changes that would help those with blemished credit records (Los Angeles Times):

A new legislative proposal from Rep. Maxine Waters (D-Los Angeles) would amend the federal Fair Credit Reporting Act to require the national credit bureaus to delete most negative information — delinquencies on credit cards and mortgages, foreclosures and short sales among others — within four years. Bankruptcies would remain on file for seven years, rather than the current ten.

Credit card debt hits record high (Lowcards.com) but low delinquencies suggest that consumers managing their credit card debt effectively (Marketplace)

About the Author

Tim Ranzetta

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.

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