Republican Lawmaker Proposes 18% Cap on Credit Card Interest Rates
Credit card corporations ought to be barred from setting rates of interest increased than 18%, a Republican lawmaker from Missouri proposed Tuesday. If handed, U.S. Senator Josh Hawley’s invoice, the Capping Credit Card Interest Rates Act, would additionally block bank card corporations from introducing new charges aimed toward evading the cap and penalize lenders with annual proportion charges that exceed 18%. Hawley’s invoice comes as Americans are grappling with record-high bank card charges whereas carrying barely greater than $1 trillion in card debt. The common bank card price has been inching towards 21% for the previous three months and was 20.68% as of final week, making it dearer for shoppers to hold balances, in line with Bankrate knowledge. [CBS News]
The variety of folks utilizing a purchase now, pay later possibility has doubled in two years
Buy Now Pay Later Usage in U.S. Doubled Since 2021
Nearly a tenth of Americans, 8%, have used Buy Now Pay Later credit score financing for on-line purchases within the final yr, a 2x improve since 2021, a YouGov report finds. Americans throughout each era have elevated adoption of BNPL since 2021, with millennials representing the biggest progress section (growing by 91%). Meanwhile, on-line bank card utilization amongst U.S. millennials has dropped by 4% throughout the identical time interval. The report identifies that amongst U.S. BNPL customers, 49% have lower than $1,000 saved versus 30% of the final inhabitants. [Payments Dive]
Credit Cards, Debit Cards Most Popular for Holiday Shopping
Rising rates of interest and inflation are anticipated to influence vacation procuring habits. Credit playing cards are anticipated to be the preferred cost technique for vacation procuring, in line with a survey by client monetary providers firm Bankrate. More than half (53%) of vacation consumers say they anticipate to pay for at the very least a few of their purchases with a bank card, together with 19% who say they may tackle bank card debt for his or her vacation purchases. Debit playing cards are an in depth second, with 52% of consumers planning to make use of a debit card. Only 10% of vacation consumers plan to make use of a buy-now, pay-later service, and 5% to plan to pay with checks. [Chain Store Age]
Average Overdraft Price Hits 19-Year Low
The common worth of a client overdraft dropped by 11% this yr, in line with a brand new survey from Bankrate.com, because the banking trade continued shifting away from the fees amid persistent regulatory stress. Though most banks nonetheless cost overdrafts, the typical price fell to $26.61 from $29.80 final yr, the annual survey discovered. The charges peaked at $33.58 in 2021. Larger banks began saying overdraft reforms that yr. Ally Bank eradicated overdraft charges, a transfer that Capital One and Citigroup would quickly observe. Bank of America slashed its price to $10, and some regional banks adopted swimsuit in decreasing the fees. [American Banker]
Xbox Teams With Mastercard to Unveil First Credit Card
Microsoft-owned gaming platform Xbox is debuting its first co-branded bank card within the U.S. The Barclays-issued Mastercard shall be obtainable on Sept. 21 solely to certified Xbox Insiders throughout the nation earlier than turning into open to most people within the U.S. beginning subsequent yr. The card comes with quite a lot of perks, like three months of Xbox Game Pass Ultimate for customers who make their first buy inside 180 days of opening their account, and 3X card factors on sure streaming platforms and eating supply providers. [PYMNTS]
Delta to Slash Sky Club Access for Amex Card Holders, Change How You Earn Elite Status
Bad information, Delta followers: it’s quickly going to be lots more durable to entry Delta Sky Clubs and earn Medallion elite standing. On the Sky Club facet, these with premium American Express playing cards could have their lounge entry lower from limitless visits to as few as six visits per yr, relying on which card they’ve. These modifications take impact in 2025. The airline will utterly change the way it awards Medallion elite standing subsequent yr. Starting subsequent yr, there’ll solely be one metric, Medallion Qualifying Dollar, and necessities are a lot increased than what they’re at the moment. And to make issues worse, the MQD waiver provided by common Delta bank cards goes away. [CNN]
Hallmark Lets Consumers Venmo Gift Cards as DoorDash and Costco Up Digital Too
To adapt to the evolving preferences of Gen Z consumers with regards to gift-giving, Hallmark is embracing trendy avenues similar to digital funds and cellular apps. In late August, Hallmark solid a partnership with Venmo to introduce over a dozen co-branded bodily greeting playing cards. These playing cards, accessible on-line and at Hallmark, CVS and Walgreens retailers, function a QR code directing customers to Venmo. The giver makes use of the code to switch funds to the recipient whereas the recipient scans the code to obtain the cost. These playing cards can be found for buy at $4.99 every and are available a spread of themes, together with “Happy Birthday” and “Best Christmas Ever.” Two years in the past when Hallmark began integrating customized movies into its bodily playing cards via QR codes. It additionally launched a cellular app that empowers clients to customise playing cards straight on their smartphones. [PYMNTS]
A New ‘Risk Score’ Is Generated
Artificial intelligence is reaching into all corners of economic providers, and that clearly consists of funds. Mastercard is reporting it has launched a brand new answer that makes use of AI to generate a “risk score” for transactions to guage the legitimacy of the particular person on the receiving finish of a digital cost. The transfer comes within the wake of real-time funds and the official introduction by the Federal Reserve of its FedNow service. While it’s excellent news for these making or anticipating funds, it has additionally opened the door to fraudsters, making it simpler for crooks who impersonate a person or firm to trick an individual into sending cash after which to flee with the funds. Known as licensed push cost fraud, it has been rising markedly within the United Kingdom and it’s anticipated to turn out to be a big difficulty within the U.S. as real-time funds take larger maintain. [CU Today]
Mastercard and Paysend Deepen Cross-Border Payments Tie-Up
Mastercard is extending its partnership with Paysend aimed toward enhancing cross-border funds for small-and-medium-sized companies (SMEs). SMEs are more and more looking for new methods to ship cash overseas or pay distributors across the globe. Indeed, regardless of the disparity in scale between SMEs and huge enterprises, small corporations make up over 98% of European imports and exports. Nearly 40% of SMEs surveyed in a Mastercard report say that cumbersome cross-border funds processes are slowing down their provide chain, with 1 / 4 stating that they’d misplaced suppliers in consequence. [FinTech Magazine]
Do Gift Cards Need to Be Plastic? Hallmark, Blackhawk Test Paper Options
Facing rising cost card environmental-impact considerations, card networks and banks are switching from dangerous virgin plastic to utilizing recycled and biodegradable supplies for credit score and debit playing cards. Now reward playing cards are going inexperienced too, utilizing paper. Gift-card large Blackhawk Network this month introduced plans to roll out extra sustainable paper-based variations of its Visa reward playing cards as a part of a long-term plan to finish reliance on first-use plastic for greater than 700 million playing cards the corporate helps produce yearly. The first wave of paper-based Visa pay as you go reward playing cards will roll out within the U.S., Canada and Australia starting this fall. [American Banker]
10 Ways to Reduce Your Credit Card Processing Fees
Swipe charges take a chunk out of most non-cash funds. Reducing service provider bank card charges can enhance your backside line. But your technique depends upon your transaction quantity, trade, and buyer base. Use these tricks to decrease the prices of processing bank cards. [U.S. Chamber]
