49% of Those with Financial Anxiety Say It’s Significant
A mid-April survey from U.S. News & World Report focused on individuals who say they worry about their finances. Among them, nearly half of respondents report experiencing significant financial anxiety. And an additional 34% say they feel at least a moderate amount of financial anxiety. Nearly 29% say high prices are the primary cause of their financial anxiety. Almost 59% report that they don’t have an emergency fund. Almost 77% believe their financial anxiety will stay the same or increase over the next year. [U.S. News & World Report]
The Problem with Apple’s Big Banking Push
Do you want the company that makes your phone to be your bank, too? That’s the question some people are surely asking themselves now that Apple has rolled out its new Apple Card savings account, which comes with a 4.15% interest rate, well above what most traditional banks are offering. It’s also not traditional because, unlike any other savings accounts out there, this one is baked into the operating system of your phone, as is the Apple Card, the credit card you must have in order to get the savings account. Thanks to digital banking and financial technology, or fintech, financial services have become so easy and frictionless that you can make important decisions about a lot of your money with just a few taps. Those could be applying for a credit card, sending money to friends, or using buy now, pay later services. That’s a winning feature for some people. For others, it’s another way to lose. [Vox]
Americans Racked Up Record Consumer Debt in February
Consumer credit hit a record high of $4.82 trillion in February, according to a report from the Federal Reserve, continuing a pattern of historically high rates of debt that began at the start of 2022, as interest rate hikes add pressure to mounting personal debts. Outstanding consumer revolving credit, which is mostly based on credit card balances, as well as auto loans, rose 5% over February, 2022, compared with January’s 12.7% jump and December’s 8.4%. Credit card debt has been climbing for close to two years following a decrease during the pandemic: after falling 13% in 2020, debt spiked 9% in 2021 and almost 18% in 2022, a record growth rate. [Forbes]
Millennials, Gen Z Use Mobile Banking 5x More Than Their Parents
PYMNTS’ latest research shows that smartphones are already the go-to device for online financial activities for most consumers, particularly younger generations. Across all age groups other than baby boomers and seniors, banking customers increasingly favor using their smartphones to conduct online financial activities and transactions by wide margins. While 58% of retail banking customers reported smartphones as their go-to devices for online financial activities, millennials were 18% more likely and Generation Z consumers were 23% more likely to say their phones were their preferred devices. 57% of consumers believe smartphones and computers are equally secure for sending and receiving money, and 56% said the same for accessing bank accounts. Slightly larger shares of consumers consider smartphones more secure than computers for sending and receiving money and for making online purchases. [PYMNTS]
Reverse ATMs Facilitate an Increasingly Cashless Society
Cash is still king, but “reverse ATMs” may be the way of the future as more businesses shift to cashless-only transactions. These reverse ATMs, also known as cash-to-card kiosks, are being installed in amusement parks, fast-food restaurants and many professional sports venues and will soon be installed in airports and on college campuses. Here’s how it works: consumers load money into a kiosk, and within seconds a receipt prints confirming the conversion and a prepaid active card is issued. Many of the prepaid cards are Mastercard or Visa and consumers can use them anywhere the cards are accepted. Many machines don’t charge fees, but some kiosks may charge a $5 fee for the card. [News Nation]
Amazon Pay Lets Citi Card Members Pay Over Time
Citi credit card members can now pay over time thanks to a new partnership with Amazon Pay. The buy now, pay later collaboration, announced Wednesday is open to eligible Citi card members using the company’s Flex Pay, and marks the first time members can use Flex Pay through a digital wallet. Card members can pay over time when using Amazon Pay at a host of online retail sites. Card members can choose payment plans of three to 48 months for purchases of $50 and up, with payments included in the card members regular minimum monthly payment. [PYMNTS]
FTC Sues Company for ‘Unfairly Thwarting’ Consumers Trying to Reverse Disputed Credit Card Charges
The Federal Trade Commission and the Florida Attorney General sued ChargeBacks911 and its owners, accusing them of “unfairly thwarting consumers who were trying to dispute credit card charges through the chargeback process.” In a complaint filed in federal court, the FTC and Florida AG allege that since at least 2016 Chargebacks911 has used “multiple unfair techniques to prevent consumers from successfully winning chargeback disputes.” According to the lawsuit, Chargebacks911 did this by regularly sending erroneous screenshots on behalf of their clients to credit card companies that “supposedly show that consumers had agreed to the disputed charges”—when they had not. [Consumers’ Checkbook]
How Major Credit Card Networks Protect Customers Against Fraud
According to the Federal Trade Commission, credit card fraud is the most common form of identity theft. The four major credit card networks are Visa, Mastercard, American Express and Discover. All four major credit card networks offer $0 liability protection, AI-powered user authentication analysis, EMV chips and card identification numbers (CIDs or CVVs) to help protect against credit card fraud. [Yahoo Finance]
American Express Sees Flights Propping Up Record Spending Volume On Cards
March was a record month for American Express, with the credit card company recording its highest ever spending volume following a surge in people booking flights and eating out. Travel and entertainment as a spend category increased 39% in the first quarter of this year, compared to the previous year’s quarter, which was impacted by the Omicron variant. That card spending, which includes restaurants, outside of the U.S. increased by 59%. Its Resy restaurant booking platform saw a record level of reservations for March. Resy has 40 million users globally, which is an increase of five million in the last six months. American Express said spending at restaurants accelerated by 28% overall, year-on-year. [Skift]
Visa’s Profits Likely Rose on Higher Transaction Volumes, Credit Card Usage
Revenue and net income for Visa likely rose 8.3% each from the same quarter last year, led by higher transaction volumes projected at $3.55 trillion. Payment volumes likely rose 9.4% in the United States, as households relied more on credit cards amid persistently high inflation. High inflation and dwindling savings led U.S. consumers to put more on credit cards last year. U.S. credit card debt hit a record just shy of $1 trillion in the fourth quarter, surpassing the pre-pandemic peak of $927 billion.2 The $61 billion increase from the previous quarter was the biggest seen in data going back to 1999. [Investopedia]
Mastercard Profit Beats Estimates as Consumers Weather Tough Economy
Mastercard surpassed market estimates for quarterly profit as travel and dining demand held up against a turbulent economy, countering a blow from higher expenses and sending the card firm’s shares up 1% premarket on Thursday. While rising interest rates and stubborn inflation have impaired budgets of lower-income households, wealthier consumers continue to spend on travel and entertainment, boosting transaction volumes at payments processors. Pent-up demand from consumers tired of lockdowns also helped, driving a 35% surge in Mastercard’s cross-border volumes – a gauge of travel demand that tracks spending on cards beyond the country of its issue. [Reuters]
Are Cryptocurrency Rewards Credit Cards a Good Idea?
The case for crypto credit cards is that, unlike other types of rewards currencies, the value of crypto has the potential to increase. Not only that, but people who want to invest in crypto but don’t have the cash to do so can get started with a crypto credit card and begin building their digital assets by using their card for regular spending and bills. Of course, the opposite is also true, and this is evidenced by all that has happened in the crypto world over the last few years. Where the value of cryptocurrency could increase dramatically, it can also drop, causing your rewards value to drop right along with it. [Yahoo Finance]
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