Swense Tech

Best Solution For You

This Week In Credit Card News: Crypto Oversight One Step Closer; Did Equifax Send Out Inaccurate Credit Scores?

Equifax Sent Lenders Inaccurate Credit Scores on Millions of Consumers

Equifax provided inaccurate credit scores on millions of U.S. consumers seeking loans during a three-week period earlier this year, according to bank executives and others familiar with the errors. Equifax sent the erroneous scores on people applying for auto loans, mortgages and credit cards to banks and nonbank lenders big and small, including JPMorgan Chase, Wells Fargo and Ally Financial. The scores were sometimes off by 20 points or more in either direction, enough to alter the interest rates consumers were offered or to result in their applications being rejected altogether. [The Wall Street Journal]

New Crypto Oversight Legislation Arrives as Industry Shakes

After 13 years, at least three crashes, dozens of scams and Ponzi schemes and hundreds of billions of dollars made and evaporated, cryptocurrencies finally have the full attention of Congress, whose lawmakers and lobbyists have papered Capitol Hill with proposals on how to regulate the industry. The latest bipartisan proposal came Wednesday from Sens. Debbie Stabenow, D-Mich., and John Boozman, R-Ark. It would hand the regulatory authority over bitcoin and ether to the Commodities Futures Trading Commission. [Associated Press]

Credit Card Debt Surges as Inflation Pushes Americans to Borrow More

Credit card debt surged in the United States from April through June as Americans borrowed billions of dollars to continue spending in the face of growing inflation, according to a Tuesday report from Federal Reserve Bank of New York. Credit card balances increased $46 billion in the second quarter, a 5.5% increase from the first quarter, and there was also an uptick in new credit card accounts. The 13% increase from the second quarter of 2021 to the second quarter of 2022 was the biggest such jump in more than 20 years. [The Washington Post]

Credit Card Lenders Step Up Offers Despite Shaky Economy

You may notice that you’re receiving more credit card offers in the mail. In spite of inflation and fears of a slowing economy, credit card companies are ramping up efforts to sign up new customers. The Wall Street Journal reports that American Express, Capital One, and Discover have all committed new money to their marketing budgets, suggesting that executives at these lenders believe consumers will continue to spend. In fact, consumers are still spending despite recession fears. JPMorgan Chase reports that consumers spent more than $271 billion using plastic in the second quarter. That’s 33% more than they spent in the fourth quarter of 2019, just before the Covid-19 pandemic. Many consumers are charging more but not paying off the balance. VantageScore reports that Gen Z consumers increased credit card balances by 30% in the second quarter. [Consumer Affairs]

Study Finds Contactless Cards Still Apple Pay’s Biggest Competition at Checkout

Apple Pay extended its commanding lead over the mobile wallet competition in the last 12 months, now capturing 48% of all in-store mobile wallet payments in the United States, with second place Google Pay far behind at 17%. However, mobile wallets remain unpopular for in-store payments, accounting for just 5.8% in Q2 2022, slightly less than in 2019. The biggest threat to Apple Pay in physical checkouts is not other mobile wallets, but contactless cards, which grabbed 14% of in-store payments, nearly twice the share we observed in 2021. [PYMNTS]

JPMorgan Is Building a Giant Travel Agency

JPMorgan Chase wants to be your travel agent. For the past 18 months, the nation’s biggest bank has been assembling the pieces to launch a full-service travel business where customers can plan and book trips ranging from a simple domestic flight to an extravagant safari. It bought a booking system, a restaurant review company and a luxury travel agent. It is building its own airport lounges and a force of thousands of travel agents. A new website will launch in the coming months. Travel has become one of the most important spending categories for banks and credit card issuers, and JPMorgan wants a bigger piece of it. The bank hopes to turn those traveling customers into lifelong Chase fans, drawing in more of their spending and other financial needs. [The Wall Street Journal]

Bank of England Launches Biggest Interest Rate Hike in 27 Years, Predicts Lengthy Recession

The Bank of England on Thursday hiked interest rates by 50 basis points, its largest single increase since 1995, and projected the U.K.’s longest recession since the global financial crisis. The sixth consecutive increase takes borrowing costs to 1.75% and marks the first half-point hike since the bank was made independent from the British government in 1997. The Monetary Policy Committee voted by a majority of 8-1 in favor of the historic half-point rise, and cited climbing inflationary pressures in the U.K. and the rest of Europe since its previous meeting in May. [CNBC]

A Durbin Amendment for Credit Cards Will Reduce Their Ubiquity and Do Nothing to Reduce Inflation

One of the ways that the Biden Administration and the Democratic Congress has tried to deflect the opprobrium for the inflation spike of the last year or so has been to blame the middlemen. Last week Senator Durbin signaled he is considering introducing legislation that would mandate credit cards be enabled with at least two unaffiliated networks, which would require the replacement of every credit card currently in circulation with a new, more expensive card for consumers. However, blaming the credit cards for high prices is little more than an exercise in political distraction: New routing mandates will not do a thing to help small merchants and would likely reduce the ability of poorer Americans to obtain credit cards altogether. [Forbes]

Instacart and Mastercard Partner Up for a New Credit Card that Offers Cash Back

With the brand new Instacart Mastercard, Chase and Instacart are teaming up to bring groceries and cash back right to your front door. This is the first credit card from Instacart, a grocery delivery service that allows you to order from your favorite chains or local stores without leaving your home. When purchased through Instacart’s website or mobile app, cardholders will earn 5% cash back on goods from over 40,000 stores without worrying about spending limits found on competing grocery cards. [USA Today]

Banks Ask CFPB to Crack Down on Data Aggregators

Eight bank trade groups have petitioned the Consumer Financial Protection Bureau to define data aggregators as larger participants subject to regulatory supervision. In a 10-page letter sent Tuesday to CFPB Director Rohit Chopra, the bank trade groups asked the bureau to issue a larger participant rule before implementing a separate rulemaking on consumer access to financial data. The trade groups also called for the CFPB to define the services of data aggregators as a financial product or service. The trade groups argue that the explosive growth in data aggregation services has created more risks for consumers, particularly to data privacy and security, which could result in uneven enforcement. [American Banker]

Splitit Partners With letus to Bring Installment Billing to Rental Market

Buy now, pay later firm Splitit is partnering with letus, a cloud-based payment platform for the rental market, via an Installments-as-a-Service integration. The collaboration lets tenants extend expenses like rent or security deposits across several monthly payments on the credit card of their choice with no additional interest charges Splitit offers a white-label installments solution that provides an application programming interface integration, which enables letus to deliver a branded experience embedded in the platform. [PYMNTS]