Most ‘Buy Now, Pay Later’ Users Have Credit Card Debt
Federal data shows Americans are using “Buy Now, Pay Later” services at ten times the rate they did in 2019. However, that doesn’t mean these consumers are staying out of debt. A new study shows that 69% of ‘Buy Now, Pay Later’ users have ‘revolving’ credit card debt that carries over from month to month. Buy Now, Pay Later services like Affirm, Shop Pay and Afterpay allow users to break up a large payment into several smaller payments. However, that often comes with high interest rates and/or late fees. [Fox 13 Memphis]
Detective Offers Ideas How Customers, Businesses Can Avoid Falling Prey to Credit Card Skimmers
Credit card skimming has become a rampant problem nationwide, with the FBI estimating that the costs of skimming for customers and financial institutions could add up to more than $1 billion every year. Skimmers are hidden devices illegally installed on ATMs or point-of-sale terminals that can capture credit card data or PINs. With this information, bad actors can then create fake debit or credit cards and ring up fraudulent transactions on the victim’s account. Although skimmers are common, a detective who is an experienced financial crimes investigator, offered a few strategies that can help businesses and customers avoid falling prey to this fraudulent tactic. [Prairie Mountain Media]
Rent Payments Helped Boost Credit Scores, Data Finds
Renters saw their credit scores significantly boosted after property managers started reporting their payment histories to credit bureaus, according to new data. Rental payment history led to credit scores increasing by an average of 46 points. It also helped establish scores for more than 27,000 renters for the first time, the data showed. In 2021, Freddie Mac offered incentives like closing cost credits to multifamily property owners who agreed to report on-time rental payments to Experian, Equifax and TransUnion. The initiative reflects efforts to incorporate more into credit decisions beyond the traditional FICO score, which does not automatically include rental payment history, and to broaden access to affordable credit. [The Wall Street Journal]
Amex Is Not the Preferred Credit Card for Millionaires
More wealthy Americans carry a Bank of America card than any other card, including American Express. 27% of high-net-worth individuals report using a secured credit card. Wealth does not necessarily mean a person is good with their money. [The Motley Fool]
Fed Seen Lifting Rates One More Time Before Cutting in 2024: Survey
The Federal Reserve’s aggressive and forceful measures to cool the most overheated economy in four decades may soon be coming to an end, according to the nation’s top economists. More than half (or 53%) of experts polled for Bankrate’s First-Quarter Economic Indicator poll say the Fed’s key benchmark interest rate will peak in a target range of 5-5.25%, suggesting officials will likely only hike rates one more time. But that doesn’t mean rate cuts are around the corner. More than four-fifths of economists (or 82%) say officials likely won’t begin cutting borrowing costs until 2024, even as the recent failure of the nation’s 16th largest bank risks worsening financial stability. [Bankrate]
Mastercard Makes Sustainable Cards Pledge
Mastercard is stepping up its sustainability efforts, vowing to ditch all first-use PVC plastics from its newly produced cards by the beginning of 2028. From January 1, 2028, all newly-produced Mastercard plastic payment cards will be made from more sustainable materials. The rule change will see all newly made cards certified by Mastercard to assess their composition and sustainability claims; this certification will then be validated by an independent third-party auditor. The move builds on efforts since 2018 to work with over 330 issuers across 80 countries, in partnership with major card manufacturers, to transition more than 168 million cards across the Mastercard network to recycled and bio-based materials. [Finextra]
How to Get Out of Credit Card Debt
With inflation chipping away at our spending power, many of us have been leaning more heavily on our credit cards during the past year. Credit card balances reached an all-time high of $986 billion at the end of 2022, and the average debt that we carry on our cards climbed up to $5,805 per person. Interest rates on credit cards have also been on the rise, so keeping debt on our cards is now costing us more money than it has in decades. Once you’re pulled into a cycle of debt, it can be hard to find your way out, especially if you weren’t taught how to use credit cards to your advantage. Sometimes, the best place to start is with the basics. What are the rules of thumb for building credit? What can we do to get a hold on debt that’s growing out of control? And how can we use credit cards as part of a healthy, disciplined budget? [Her Money]
CardX Adds Mastercard Click to Pay to Its Online Payment Form
Surcharging compliance platform CardX has partnered Mastercard to add Click to Pay on Lightbox, its online payment form, to expand the product’s reach. Click to Pay is available to both existing and new card-not-present merchants on CardX’s platform, and is set to help facilitate an improved checkout experience. The announcement details that in the current economic uncertainty, managing costs and optimizing approval rates is considered critical. Click to Pay aims to create a frictionless payment process for consumers, leading to increased approval rates and the potential for more merchant sales. Lightbox enables consumers to add their card information directly into Mastercard Click to Pay, where it is tokenized and helps deliver a hassle-free checkout experience together with data protection. [The Paypers]
The Mobile Payments Landscape is Changing
With the introduction of mobile wallets and contactless payments in recent years, the world of mobile payments has evolved quickly. Wearables are the next frontier in mobile payments, and they are anticipated to overtake smartphones as the main device for mobile payments. Wearable technology, such as smartwatches and fitness trackers, is improving and is well adapted to enabling mobile payments. Convenience is one of the primary benefits of using wearables for mobile purchases. Because wearables are always on and with the user, payments can be made swiftly and easily without the need for a smartphone or wallet. Security is another benefit of using wearables for mobile payments. Biometric authentication, such as fingerprint recognition, can be used in wearables to guarantee that only the approved user can make payments. [Finance Magnates]
Banks, Fintechs, and Regulators Must Step In to Make BNPL Safer
Banks, fintechs, and regulators all have a part to play in ensuring that BNPL services are used responsibly and do not adversely impact the financial health of consumers, and subsequently, financial institutions. Education and awareness is the top priority. Sharing information on the overall interest rates, payment terms, and the consequences of non-payment can help discourage consumers from taking on debt that they cannot afford to repay. Banks can also offer regular payment reminders so that consumers can plan their expenses and be better prepared to pay off their debt. They can also offer credit counselling and information on alternate credit options. Regulators must also play their part by crafting policies that require BNPL providers to disclose key information to consumers, to enforcing credit assessments of consumers before approving BNPL applications. In addition, they can work to establish lending standards for BNPL providers. [Business & Finance]
Top Digital Payment Trends to Watch
In 2020, the line between the online and offline worlds blurred as the digital economy became the business norm. The pandemic accelerated the adoption of digital payment methods and significantly changed consumer behavior. As a result, industries and ecosystems rapidly adapted to the new reality. Fast forward to now, digital payment transactions are projected to reach a staggering $9.68 trillion, thanks to the continued growth of digital wallets, virtual cards, and open banking. These advancements have made payment methods more versatile, faster, and secure. Digital payments are now embedded into consumers’ daily lives, with access to mobile devices providing both convenience and efficiency. If merchants are to retain existing customers and attract new ones, they must continue to embrace new payment methods. [Payments Journal]
Citi AAdvantage Platinum Card 75,000 Bonus Miles Offer
The Citi AAdvantage Platinum Card has a new limited time welcome bonus of 75,000 AAdvantage miles after spending $3,500 within the first four months. The card’s $99 annual fee is even waived for the first 12 months. I value AAdvantage miles at 1.5 cents each, so to me this bonus is worth $1,125. And 75,000 miles is more than enough for a one-way business class ticket on partner airlines to Europe, Asia and the Middle East. [One Mile at a Time]
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