Credit Card Debt Hits New Record
Credit card debt is back at an all-time high. A big jump in credit card debt in November has raised the total of what is called revolving debt to $1.023 trillion, according to new Federal Reserve data. That tops the old record that occurred before the recession. As the recession took hold, consumers cut back on what they owed on their credit cards. But as the economy began to improve, we started racking up more debt. So is it something to worry about? That depends. The economy is better than it was 10 years ago and total credit-card debt, as a share of the economy, is lower today than it was then. So far, defaults have been low. But interest rates are expected to continue to rise this year, and that will put more pressure on those who maintain a balance on their cards and pay those higher interest rates every month. Story by Mark Williams for the Columbus Dispatch
Which Generation Has the Most Debt and the Worst Credit Scores?
Generation X continues to struggle with debt while Millennials and Baby Boomers are making positive strides. Experian’s State of Credit report paints a relatively healthy picture for Americans, with the average credit score rising from 673 to 675 over the 12 months ending last June, the highest since 679 in 2007, before the Great Recession began. Consumer confidence is up sharply and the Federal Reserve said this week that credit card debt hit a new record in November. That’s a good sign for consumer spending but could spell trouble down the road if the economy and labor market weaken. Some age groups are handling debt and managing their creditworthiness better than others, according to the credit reporting agency. Here’s a rundown. Story by Paul Davidson for USA Today
People Desperate to Buy Bitcoin Are Paying With Credit Cards
Fear of missing out on the bitcoin craze has some underfunded investors placing bets with plastic. About 18 percent of bitcoin investors used a credit card to fund purchases of the cryptocurrency, according to a LendEDU survey of 672 active investors conducted in December. Of those, 22 percent could not pay off their balance after buying the digital coin. Even beyond those surveyed, interest in buying bitcoin with a credit card has surged, according to Google Trends. But going into debt for exposure to such a volatile asset, prone to price swings of plus or minus as much as 30 percent a day, comes with risk. Story by Kailey Leinz for Bloomberg
Senators Pushing for Tougher Data Breach Laws
Two Democratic senators, Elizabeth Warren of Massachusetts and Mark Warner of Virginia, have introduced a bill that would give the Federal Trade Commission (FTC) more power to investigate credit reporting agencies and levy fines against agencies that are breached by hackers. If passed, the FTC can inspect companies, such as TransUnion, Experian, and Equifax, which was breached in 2017, to make sure they have proper security protocols in place. Credit reporting companies that earn more than $7 million a year in the sale of consumer information would have to share details with the FTC about their device management, network security, data encryption, and other cybersecurity practices. If a breach does occur, the FTC could charge the company at least $100 per affected person. Half of those funds would be used as restitution to the affected consumers. Story by John Oldshue for LowCards.com
Petal Raises $13 Million To Give Starter Credit Cards To Millennials
Petal, a financial technology upstart that aims to provide credit cards to young people and others who lack a credit history, has raised $13 million. The funds will be used to roll out the credit card nationwide; it is currently only available via waitlist, where it has attracted some 40,000 people. Petal is among a new crop of companies that are roping in non-traditional data in their underwriting to approve millennials, immigrants and other consumers who are typically turned away from banks and lenders because of their limited credit histories. Story by Lauren Gensler for Forbes
‘Rip-Off’ Credit and Debit Card Charges Banned from UK This Weekend
Charges to use your debit or credit card in shops and online will scrapped in the UK from this weekend. Customers will no longer be stung with a surcharge when using a card to pay in a small shop or booking concert tickets or travel online, according to new regulations based on an EU directive. This will apply to both in-store and online payments and includes American Express and other payment methods including Apple Pay from Saturday, January 13. Companies are still allowed to levy a surcharge if you opt to pay by cash or cheque. Firms may also charge new service fees to customers as long as the fees apply no matter what method of payment is used. Story by Eleanor Rose for the Evening Standard
Restricted Banking Access for the Marijuana Industry May Spell a Boom for Security Business
Attorney General Jeff Sessions’ move on the Cole Memo could hinder the ability of cannabis companies to find and secure banking relationships, leaving businesses with a ton of cash on hand. More cash on hand means ancillary companies that specialize in security may see an increase in business. Growth projections put the industry on track to hit $6 billion in the U.S. this year and triple in the next four to five years, fueled primarily by a new recreational market in California. Story by Kate Rogers for CNBC
Massive Retail Closures Don’t Scare PayPal
More retail stores closed in 2017 than in any other year. But while the empty, desolate parking lots terrify some, PayPal isn’t running for the hills. The company is pivoting hard to become a platform instead of just a payments service, CEO Dan Schulman said. As brick-and-mortar retailers face the decision to move into ecommerce or perish, PayPal is there to hold their hand—and make a pretty penny. There are two “massive trends” at play, Schulman added. First, the mobile revolution is forging ahead, no-holds-barred. Second, mobile payments companies such as PayPal are ripe for “tremendous tailwinds” from the move to digital payments. Story by Kinsey Grant for The Street
In-Home Voice Tech Beginning to Silence Mobile Use
Mobile use is beginning to suffer at the virtual hands of in-home digital voice assistants. According to professional services company Accenture, which surveyed 21,000 consumers in 19 countries between last October and November, 66% of people who own a digital voice assistant used their smartphones less at home since installing the device. About two-thirds (64%) said they used their smartphones less for entertainment, and more than half said they’ve stepped away from their smartphones when it comes to making purchases or doing general searches for information (58% and 56%, respectively). Story by Tina Orem for the Credit Union Times
How to Pay Off Holiday Debt Faster
Enjoying the holiday season is one thing, but paying for it is another. According to the most recent post-holiday debt survey from MagnifyMoney, Americans racked up an average of $1,054 of debt over the holiday shopping season. That’s up about 5% over last year and it’s problematic in that nearly two-thirds of those with debt say they didn’t plan on taking it on, and more of it is on high-interest rate credit cards than in past years. Digging out can be both time-consuming and expensive. The 10 percent of folks who are making minimum payments only will a pay around $500 in interest (at an APR of 15.9 percent) and not clear the debt hurdle ’til 2023. But there are ways to get out from under the holiday hangover quicker, cheaper and possibly even for free. Story by Jean Chatzky for NBC News
97% of All Bitcoins are Held by 4% of Addresses
97% of all bitcoin are held by 4% of all bitcoin addresses. By way of comparison, the wealthiest 1% own just about half of the world’s wealth, according to analysis by Credit Suisse in November. The bank said the wealth concentration points to bitcoin’s use-case as a store of value, akin to gold. 2017 was a breakneck year for bitcoin investors. The red-hot cryptocurrency soared to an all-time high near $20,000 in December. It ended the year up 1,300%. Story by Frank Chaparro for Business Insider