CardRates.com Weekly Credit Card Update — September 17, 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.

Installment plans are back in style. PayPal last week said it was buying Japanese installment payment startup Paidy, following Square’s $29 billion deal for Afterpay. Macy’s and Bed Bath & Beyond have added the option at checkout over the past year. Even Amazon.com is doing it.

• Story By: AnnaMaria Andriotis, The Wall Street Journal

A third of U.S. consumers who used “buy now, pay later” services have fallen behind on one or more payments, and 72% of those said their credit score declined, a new Credit Karma study showed. The study found 44% had used these services before.

The latest survey found younger consumers were more likely to miss payments. More than half of Gen Z or millennial respondents—those born between the early 1980s and mid-to-late 1990s—said they had missed at least one payment. That compares with 22% of Gen X, who were born in the early 1960s to early 1980s, and 10% of Baby Boomers, those born between the mid-1940s and 1960.

• Story By: Anna Irrera, Reuters

All signs point to a bullish holiday season for retailers, online and off. U.S. retail sales (excluding automotive and gas) are anticipated to grow 7.4% this holiday season (Nov. 1- Dec. 24), according to Mastercard SpendingPulse. In-store sales are expected to see a rebound—rising 6.6% compared to 2020.

Even as consumers return to in-store browsing and shopping, they are expected to spend online at even higher rates (up 7.6%) than last year. 

• Story By: Marianne Wilson, Chain Store Age

Senator Elizabeth Warren says Wells Fargo has run out of time to fix the many internal problems that have harmed its customers. In a letter to the Federal Reserve chair, Jerome H. Powell, Ms. Warren asked the Fed to force the financial giant to break off its core banking activities, like offering checking and savings accounts and loans, from its other financial services.

Mr. Powell is unlikely to follow the suggestion, at least in the near future: Wells Fargo would somehow have to quickly shed dozens of nonbank subsidiaries, which would certainly undermine the bank’s financial health. But Ms. Warren’s request for such aggressive action hinted at the desire among progressives for a stronger regulatory hand from the Fed. 

• Story By: Emily Flitter, The New York Times

Citigroup and American Express have released statistics on the August delinquencies in credit card payments, with Citi’s delinquency improving and American Express holding steady. Citi’s delinquency rate of 0.8% in August was an improvement from 0.87% in July.

It was also below the three-month average of 0.86%. American Express, meanwhile, had an August delinquency rate of 0.6%, which was unchanged from June and July, according to a separate Seeking Alpha report. It was also far below the August 2020 delinquency rate of 1.2%.

• Story In: PYMNTS

Capital One will test a “buy now, pay later” product this year as competition for consumer loans builds from financial technology firms providing merchants with easy ways to offer cheap financing for purchases. Capital One Chief Executive Richard Fairbank said Capital One’s test will include point-of-sale loans for customers at a “select set of merchants” with which it already has relationships.

Fairbank said the offerings have become suddenly popular due to support by venture capitalists and the willingness of merchants to subsidize the interest costs. “The elephant in the room is the sustainability of the merchant subsidy,” Fairbank said. “This is fueled by merchants’ beliefs that they’re getting incremental volume.”

• Story By: David Henry, Reuters

Capital One announced that it plans to relaunch its travel website to include new features that can save money for customers when they book flights, as well as offer other protections that aren’t available elsewhere. The beta version will begin to roll out in the next few weeks to groups of customers who hold Capital One miles-earning credit cards.

Capital One is relying on the price-prediction technology of travel booking website Hopper to let card holders know when’s the cheapest time to book a flight. Plus, the new portal will grant card holders access to a number of protections to ensure they can feel confident that they’re paying the best price.

• Story By: Emily McNutt, CNN

American Express customers are sticking with the Platinum card even after the company decided to ratchet up the annual fee. AmEx earlier this year rejiggered many of the rewards on its Platinum product–from adding $200 in annual hotel credits to offering deals for chartering private jets–as part of a broad revamp of the card.

It also increased the annual fee to $695 from $550. With more consumers getting back to traveling and dining out, banks have been rolling out new cards and offering special perks to try to attract some of that spending to their products.

• Story By: Jennifer Surane, Bloomberg

Fraudulent mobile apps, whose only purpose is to steal valuable personal and payment information from unsuspecting victims, are seeing a significant rise in numbers, experts have warned. A new report from payment fraud protection specialists Outseer claims that out of all fraudulent attacks that happened in Q2 2021 (of which there were more than 49,000), rogue mobile apps accounted for almost a third (30%).

That represents a spike of 66% in just 90 days, and an increase of 140% compared to the same period last year. The growth, Outseer claims, could be attributed to the fact that due to the pandemic, consumers started using mobile banking apps a bit more.

• Story By: Sead Fadilpasic, Tech Radar

The University of Notre Dame announced a new official banking partner of the school’s athletic department, Credit Union 1. The deal provides access to school- and mascot-branded debit cards, as well as other banking services.

A similar arrangement with Bank of America for banking services that ran through 2019 shows the Irish likely will collect a decent fee for every student and fan who signs up. Under the Bank of America deal, disclosed to the CFPB, Notre Dame collected $100 for every new sign-up for a credit card or rewards account (which were fee-generating checking accounts). On top of that, the school collected a portion of all the money Irish account holders generated: half a percent of charges on the credit card, 0.05% to 0.2% on debit spending, depending on the specifics of the account.

In the past 10 years according to CFPB data, Notre Dame collected $4.7 million from the arrangement, while Bank of America gained 5,552 active accounts.

• Story By: Brendan Coffey, Sportico

There are many Chase credit cards that earn Ultimate Rewards points, and while those points are typically best used for travel opportunities, you can also redeem them at Amazon. While we normally suggest saving them for travel, Amazon currently has an offer that’s a great way to not only use your Chase points but to also save on your next Amazon purchase.

Chase credit card holders targeted for this promotion can save $10 off a purchase of $30 or more when using Chase Ultimate Rewards points at Amazon between now and Oct. 19, 2021. Not all Chase cards are targeted for this offer, so here’s a breakdown to see if you’re eligible for the discount and, if you are, show you how to apply it to your Amazon order.

• Story By: Jennifer Yellin, CNN