CardRates.com Weekly Credit Card Update — August 27, 2021

For media inquiries on these stories and more, contact credit card expert and industry analyst Bill Hardekopf at (205) 985-9725 or billh@cardrates.com.

According to TransUnion’s Q2 2021 Industry Insights Report, credit card balances have decreased by 4.1% year-over-year. Reduced spending meant that consumers were able to put more money toward paying down revolving credit balances.

In fact, the average card balance among millennials declined to $4,277 this year, slightly less than the $4,471 average in 2020. A similar decline can also be seen among the Gen X and Baby Boomer generation; the average balance among Gen X’ers is now down to $6,359 from $6,919, and the average balance among Baby Boomers declined from $5,777 to $5,317. Gen Z was actually the only generation to see a slight rise in their average credit card balance in the first half of 2021; the number rose slightly from $1,522 to $1,616.

• Story By: Jasmin Suknanan, CNBC

Citi will launch a buy now, pay later (BNPL) card dubbed Spot in Australia through a partnership with Diners Club. Unlike many BNPL providers, Citi doesn’t have to worry about forging retail partnerships because its card can be accepted at most points-of-sale.

Citi will likely bring the Spot card to other markets if it’s well-received in Australia, and the newest iteration of BNPL solutions could shake up the global installment lending landscape. Issuers that aren’t already involved in the BNPL space — like Capital One, which has a strained history with BNPL services — might follow Citi’s lead with their own BNPL card launches.

• Story By: Adriana Nunez, Business Insider

OnlyFans’ decision to stop hosting a wide swath of sexually explicit content is also a result of a much wider and concerted crackdown in recent years across explicit parts of the internet, one driven largely by a group of powerful and increasingly assertive companies: the payment processors who, behind the scenes, handle every swipe of your credit card whether you’re paying for gas, buying groceries or, yes, tipping a performer on OnlyFans.

OnlyFans’ decision to attribute its policy change to payment companies reflects how the financial sector has increasingly leaned against sites that share adult content. But the issue, they say, is not one of mere prudishness, but legal exposure.

• Story By: Brian Fung, CNN

Apple’s payments service accounted for 92% of all mobile wallet debit transactions in the U.S. last year. Pulse’s annual 2021 Debit Issuer Study shows about two billion mobile wallet debit transactions were conducted in 2020 using either Apple Pay, Samsung Pay or Google Pay. That figure is up 51% year-over-year.

The study found average ticket size increased 55% from $15 in 2019 to $23 in 2020. Consumers made fewer purchases but those transactions were larger, a change credited to pandemic spending patterns. Apple Pay’s success in 2020 can in part be chalked up to fairly wide retail adoption. Of the top 100 U.S. merchants, 74 accepted the payment option and 65% of all retail locations in the nation supported the service.

• Story By: Mikey Campbell, Apple Insider

Prior to his resignation from office, New York Gov. Andrew Cuomo signed a bill that New York’s state-chartered financial institutions to process checks in the order they are received, or from smallest to largest, to prevent consumers from racking up fees for overdrawing their accounts.

Under the current law, state-chartered institutions can reject the subsequent smaller checks, even if there are sufficient funds in the account to cover those expenses. The new law is scheduled to take place on Jan. 1, 2022.

• Story In: CU Today

Mastercard announced plans to remove the black magnetic stripe from all of its credit and debit cards. The stripe will become optional for new cards in 2027, then vanish by 2033. While neither Visa nor American Express has announced any plans to ditch the stripe themselves, there’s a variety of reasons why it’s probably a matter of time.

The magnetic stripe can degrade or even demagnetize over time, forcing the owner to replace the card. It’s also not very secure. Industrious thieves have long used tiny “skimmers” that can be placed inside legitimate payment terminals to harvest your data. That information can be used to commit fraud or even clone your card for their personal use.

• Story By: Christina Majaski, Yahoo Finance

Apple, Google and other big companies around the world are continuing to add to their massive piles of cash, a sign that corporations are increasingly nervous about how the highly contagious Delta variant of Covid-19 could damage the global economy.

The world’s largest nonfinancial companies had a record $6.85 trillion in cash on their balance sheets as of the end of the second quarter. Tech giants in particular are hoarding cash. Apple, Microsoft and Google owner Alphabet have a combined $460 billion in cash on their balance sheets. Amazon has nearly $90 billion. Facebook has more than $64 billion, too.

• Story By: Paul R. La Monica, CNN

Kids learn a lot of important skills in school, even before heading off to college. But for some reason, personal finance usually isn’t one of them. Though knowing the Pythagorean theorem can certainly come in handy during adulthood, some argue that concepts such as saving money and managing debt are equally, if not more, useful.

But until these money concepts are part of the standard curriculum, it’s up to the adults in students’ lives to teach them. Wondering where to start? We reached out to money experts to find out which financial skills they believe every student should learn.

• Story By: Casey Bond, GoBankingRates

The July 2021 Credit Score Literacy and Building Credit Report by PYMNTS found 70% of surveyed consumers think their credit scores are “above average” while just 45% have scores over 751, the above-average mark according to national credit reporting data.

The study quickly identifies credit’s pressing perception problem. Despite this, researchers also found widespread consumer support for efforts to improve credit scores and credit worthiness, stating 62% of consumers want to raise their scores, including a 41% share who say they are very or extremely interested in doing so, and another 29% who are very or extremely concerned about their credit scores.

• Story In: PYMNTS

Visa is taking robust steps to connect digital currencies to its global electronic payments network in order to prepare for a financial future where digital assets comprise a meaningful amount of a saver’s wealth. To date, 54 crypto companies have partnered with Visa to enable crypto spending. 

Crypto-linked Visa debit cards facilitated over $1 billion worth of transactions across Visa’s 70 million merchants worldwide in the first half of 2021 alone. Survey data suggests that younger generations are increasingly diverting wealth into cryptocurrencies and digital assets. This is especially true for the most affluent members of these generations, which are especially prized by financial institutions and card networks. 

• Story By: Emily Mason, Forbes

An investigation by The Markup has found that lenders in 2019 were more likely to deny home loans to people of color than to white people with similar financial characteristics — even when we controlled for newly available financial factors that the mortgage industry has in the past said would explain racial disparities in lending.

Holding 17 different factors steady in a complex statistical analysis of more than 2 million conventional mortgage applications for home purchases reported to the government, we found that, in comparison to similar white applicants, lenders were 80% more likely to reject Black applicants; 70% more likely to deny Native American applicants; 50% more likely to turn down Asian/Pacific Islander applicants; and 40% more likely to reject Latino applicants.

• Story By: Emmanuel Martinez and Lauren Kirchner, Associated Press