Editor’s note: For more than 10 years, credit card expert Bill Hardekopf has published his Weekly Credit Card Update on LowCards.com. Recently, LowCards became part of CardRates.com, where Bill joins a team of leading experts as the site’s Senior Industry Analyst. Check back every Friday for Bill’s weekly industry update — now exclusively at CardRates.com.
For media inquiries on these stories and more, contact credit card expert and industry analyst Bill Hardekopf at (205) 985-9725.
1. 1 in 3 Shoppers Used a Buy-Now-Pay-Later Option to Make a Purchase They Otherwise Couldn’t Afford
Budgeting for the perfect item, whether it’s a new pair of running shoes, an upgraded refrigerator, or a flat-screen TV, requires some forethought and planning. In a recent study by coupon search engine Coupon Follow, 63% of respondents reported using buy-now-pay-later financing, aka point-of-sale (POS) loans, to afford something they bought online.
Of this group, 60% reported they were able to get a POS loan that they otherwise would not have qualified for, and 72% reported adding extra items to their cart.
• Story By: Megan DeMatteo, CNBC
2. PayPal Should Have More Growth In-Store
PayPal is breaking into stores across America. For years, investors wondered if the digital-payment giant would cross over into the physical realm in a big way. The pandemic, which has been a boon for contactless tapped or scanned payments, seems to have gotten that ball rolling.
PayPal said its payments with QR codes — digital scrambles that can be displayed by phones and scanned at checkout counters — are now accepted at more than 600,000 retail locations, and that in 2020, it had signed up 29 large enterprises, including CVS and Macy’s, to offer them. PayPal did more than $20 billion worth of in-store volume across its payment types in 2020.
• Story By: Telis Demos, The Wall Street Journal
3. Facing a Double-Whammy, Millennials Rack Up Credit Card Debt During the Pandemic
The pandemic’s economic hit is making an outsize impact on one generation’s debt: A greater share of millennials report they have added to their credit card debt since March compared with older generations.
About 56% of millennials say their credit card debt has grown since the start of the pandemic, compared with 53% of Generation Xers and 46% of baby boomers, according to a new survey from CreditCards.com. About 55% of millennials blamed the crisis for their snowballing balances, while fewer than half of Gen Xers and baby boomers pointed to the pandemic as the cause of their growing debt.
• Story By: Aimee Picchi, USA Today
4. Credit Card Growth Headwinds May Undercut Strong Credit Trends
The de-leveraging by U.S. consumers since the emergence of the pandemic has resulted in sharp declines in U.S. credit card debt, which bodes well for near-term credit performance.
However, lower credit card volumes and loan balances will partially offset the better-than-expected credit performance and continue to pressure earnings over the near to medium term, Fitch Ratings says. In response to pandemic-related economic uncertainties, credit card issuers dramatically scaled back investments in new account acquisition and tightened underwriting standards to levels not seen since the global financial crisis. Fitch viewed these actions as prudent given heightened uncertainty.
• Story In: Fitch Ratings
5. Mastercard Adds Transaction Details to Online Purchase History
Mastercard has debuted a new service to boost transparency for users’ purchases online. The payments company’s service, delivered via Ethoca, will give customers more details on their purchases, including the merchant’s name, logo, and location of the purchase.
Merchants have been invited to upload their logos and increase their brand’s visibility, as well as doing away with confusion on the purchases that have led to unnecessary chargebacks before.
• Story In: PYMNTS
6. Visa Reveals Bitcoin and Crypto Banking Roadmap Amid Race to Reach Network of 70 Million
Visa, a one-time enemy of the bitcoin and cryptocurrency community, is fast becoming one of bitcoin’s biggest cheerleaders.
After partnering with 35 various bitcoin and cryptocurrency platforms in recent years, the credit card company has announced its plans to help banks roll out bitcoin and cryptocurrency buying and trading services with a Visa crypto software program, set to launch later this year.
• Story By: Billy Bambrough, Forbes
7. Paying Less than 30 Days Late Won’t Affect Your Credit Score. Neither Will These Other 6 Things.
Your credit score is an important number that essentially rates how likely you are to repay the money you borrow. It’s also the subject of quite a few myths and rumors. If you’re working to increase your credit score, inaccurate information is a big problem. You may end up making unnecessary changes that hurt your financial situation.
To avoid those issues, you should know about what doesn’t affect your credit, even if it seems like it would matter.
• Story By: Lyle Daly, The Ascent
8. Credit Cards Lose None of Their Luster Despite Debit’s Drive
A new study indicates that credit cards will remain an essential and growing component of the online payment mix — 41% of consumers surveyed prefer credit cards when paying online, making it the most commonly used payment method, and 28% have increased their online usage of the cards since the pandemic’s onset.
• Story In: PYMNTS
9. American Express Adds New Limited-Time Perks to its Delta, Hilton, and Marriott Credit Cards
American Express launched an impressive series of credits and bonus point offers on its Delta, Hilton, and Marriott credit cards. The new offers, which include up to $220 in statement credits on dining and U.S. wireless telephone services, are designed to retain existing card members who have been unable to use all the benefits of their travel card due to the pandemic.
To be eligible, you must have had your card open as of January 1, 2021, and must enroll via Amex Offers before making an eligible transaction.
• Story By: Julian Kheel, CNN
10. Bank of America, Citi, JPMorgan Chase, and Wells Fargo Report Improvement in Card Volume Growth in Q4
Bank of America, Citi, JPMorgan Chase, and Wells Fargo reported slight improvements in card volume growth in Q4. But digital offerings and a potential third round of stimulus payments could enable them to further boost recovery in the coming months.
• Story By: Adriana Nunez, Business Insider
11. AmEx Adds Uber Perks to Gold Card, Brings Back Rose Gold Option
American Express is tweaking the rewards on its Gold card as the company strives to hold onto affluent customers. Customers with the $250-a-year card will now receive a $10 monthly credit for purchases made with Uber Technologies, including rides or food deliveries. AmEx also said it would revive its Rose Gold Card after offering the color variation for a limited time in 2018 and 2019.
AmEx has had to revamp many of its popular cards after the coronavirus pandemic sapped consumer spending in both categories for much of last year. So far, the efforts appear to be working.
• Story By: Jennifer Surane, Bloomberg
12. Biometrics Becoming Critical to the Payment App Experience
With consumers becoming more and more reliant on mobile payment functionality during the ongoing Covid-19 pandemic, fraudsters have been honing their mobile attack strategies, increasing the need for advanced security measures such as biometrics.
The demand for biometrics, which includes fingerprint, iris, voice, and facial recognition, is about to grow exponentially, according to new Juniper Research. Biometrics will authenticate over $3 trillion in payment transactions in 2025, an increase of 650% from just $404 billion in 2020.
• Story By: Natasha Chilingerian, Credit Union Times