October 15, 2024
Tangible Assets

People Using Cash Back Cards To Help During Tough Economy


Cash-Back Credit Card Use Rises Amid Financial Strain

More people are switching to using cash-back cards as their primary credit card over miles and points cards amid financial strain, according to a recent J.D. Power study. Credit card users also reported higher use of value cards, which help build credit but don’t offer rewards. Points and miles cards typically have higher annual fees, so cardholders may be shifting toward cash-back cards to be more cost-conscious. Experts suggest higher card fees could eat into rewards and that cash-back or balance transfer cards could be good options when money is tight. [Investopedia]

U.S. Credit Card Debt Reaches $1.14 Trillion High

Credit card debt is at an all-time high of $1.14 trillion, according to the latest data from the Federal Reserve Bank of New York. The Q2 2024 Quarterly Report on Household Debt and Credit shows that credit card debt increased $27 billion during the second quarter. Compared to a year ago, credit card balances are up 5.8%. In addition, credit card delinquency rates also remain high, with 9.1% of credit card balances transitioning to delinquency over the past year. Credit card debt has the highest rates of serious delinquency, referred to as 90 days or more, compared to other types of loans like auto or mortgage debt. [Newsweek]

Is This the End for the Magnetic Stripe?

Since the 1960s, magstripes have been used on bank cards, rail tickets, IDs and even cards containing medical information, to set up hospital machines. But that murky brown strip of plastic usually made with polluting heavy metals may not be around for much longer. From this year onwards, for instance, Mastercard will not require banks to put a magnetic stripe on debit and credit cards. For ticketing, new technologies including printable barcodes and reusable contactless cards are considered more environmentally friendly and potentially more convenient. You also can’t wipe them by accidentally putting them too close to your iPhone. [BBC]

Digital Wallets Can Allow Purchases with Stolen Credit Cards

Digital wallets like Apple Pay, Google Pay, and PayPal can be used to conduct transactions using stolen and cancelled payment cards, according to academic security researchers. These flaws, some of which have been addressed since responsible disclosure last year, allow an attacker armed with limited personal information to add an active stolen payment card number to a digital wallet and make purchases, even if the card is subsequently canceled and replaced. [The Register]

Mobile Debit Card Payments Are Ramping. But the Economics for Issuers Are in Flux

The popularity of debit cards is continuing to grow, even as the ways in which they are used evolve. More debit card spending is occurring in “card not present” transactions and a small but rapidly growing portion of debit transactions are flowing through mobile devices. In a related trend, half of institutions surveyed plan to add digital instant-issue ability to their debit card lineups, pushing the payment credential to digital wallets ahead of delivery of physical cards, further accelerating the shift to mobile debit card spending. The push would apply both to original issuance as well as replacement of lost or stolen cards. Four out of five demand deposit customers have debit cards tied to those accounts and two thirds of those customers use the cards to make monthly purchases. [The Financial Brand]

This No-Fee Debit Card Lets Parents Supervise Spending

Chase’s First Banking debit card for kids and teens is designed to soothe all parent fears when it comes to giving children easy access to money. While under-18-year-olds get their own physical debit card, guardians can tap in to a range of parental controls to monitor their child’s spending to ensure they won’t get into trouble with their newfound financial freedom. Chase’s offering does all that without charging any monthly service, subscription or overdraft fees or requiring a minimum balance. Chase’s First Banking debit card does come with one big limitation, however. Parents must be existing Chase bank customers to access this card for their children. [The Wall Street Journal]

Majority of Venmo, PayPal Users Report Being Scammed

A majority of Venmo and PayPal app users have reported being scammed, according to new research from Security.org. In 2024, 83% of Americans reported being scammed or targeted, which was a significant jump from the 68% who said the same in 2023 and 48% in 2022. Across the United States, roughly 79% of residents use peer-to-peer apps like Paypal, Venmo or Zelle at least once a week. Users are able to send payments back and forth between friends and family, making tasks like splitting rent or a restaurant check easier than ever. [Newsweek]

Mastercard to Cut 1,000 Employees in Restructuring

Mastercard confirmed that it will cut about 1,000 employees as part of a restructuring to focus on international markets announced during its second-quarter earnings report earlier this month. The company hadn’t previously disclosed that it would reduce its workforce as part of a $190 million charge related to the restructuring. The reduction will affect about 3% of the global card network’s full-time workforce, and the majority of notifications to employees will take place in the current quarter. [Payments Dive]

U.S. Bank Forms Credit Card Partnership with Edward Jones

U.S. Bank expanded its partnership with broker-dealer and financial advisor Edward Jones. The collaboration will allow the firm’s advisors to offer clients deposit and credit card products from the bank starting in late 2025. The expanded partnership will feature new co-branded Edward Jones and U.S. Bank credit card products with more rewards for consumer and small business clients. The expanded partnership is part of the bank’s strategy to expand its geographic reach, the release said. In 2020 U.S. Bank teamed with State Farm to assume the insurance provider’s deposit and credit card account products, a relationship that now includes business banking, deposit and credit card products in 48 states. [PYMNTS]

Gen Z Puts Their Money Where Their Phone Is

A recent survey by Interac Corp. reveals that 69% of Gen Z Canadian adults have adopted mobile wallets, with 63% opting to leave their physical wallets at home for short trips. Gen Z’s use of mobile wallets surpasses other generations, including Millennials at 60%, Gen X at 44%, Boomers at 27%, and the Silent Generation at 10%. The data highlights that Gen Z’s preference for digital payments has driven a 27% increase in Interac Debit mobile contactless payments in the first half of 2024 compared to the same period in 2023. [Benefits and Pension Monitor]

How Big Banks Are Gunning for Buy-Now, Pay-Later Fintechs

Two decades after the launch of Klarna and a decade after Affirm and Afterpay got going, the buy-now, pay-later business is facing some adult challenges, including tougher regulation and competition from big-bank credit card issuers such as JPMorgan Chase and Citibank, which are beginning to play on its turf. Both the new bank competition and regulation appear to be part of a broader trend: BNPL products could be starting to feel to consumers more like credit cards than the simpler four-payment alternative Sweden’s Klarna and Australia’s Afterpay initially pitched. [Forbes]



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