Changes from Visa Mean Americans Will Carry Fewer Physical Credit, Debit Cards in Their Wallets
Your wallet may soon be getting thinner. Visa announced major changes to how credit and debit cards will operate in the U.S. in the coming months and years. The new features could mean Americans will be carrying fewer physical cards in their wallets, and will make the 16-digit credit or debit card number printed on every card increasingly irrelevant. They will be some of the biggest changes to how payments operate in the U.S. since the U.S. rolled out chip-embedded cards several years ago. They also come as Americans have many more options to pay for purchases beyond “credit or debit,” including buy now, pay later companies, peer-to-peer payment options, paying directly with a bank, or digital payment systems like Apple Pay. [Associated Press]
From AI to Mobile Devices: Technology Reimagines Debit and Credit Cards
The “one card” concept and execution from Visa, via the Flexible Credential, enables a single, digitally-issued card to “toggle” between debit, credit, pay-over-time options and cryptocurrency. One card, connected to multiple banking accounts, eliminates the clutter for consumers that results from segmenting and juggling various banks’ credit and debit cards as they conduct their daily financial lives. [PYMNTS]
Supreme Court Votes 7-2 to Defend CFPB from Conservative Challenge
The Supreme Court upheld the existence of the Consumer Financial Protection Bureau in a Thursday ruling. The CFPB’s funding structure had been attacked in court by conservative groups led by a payday loan organization, but the court issued a 7-2 decision in favor of the CFPB’s constitutionality. The CFPB was created in the wake of the 2008 financial crisis, which was triggered by irresponsible actions in the American banking industry. It has been a target of conservative anger for its entire existence. [New York Daily News]
Credit Card Delinquencies Are Rising. Blame Inflation, Interest Rates
A growing number of Americans are maxed out on their credit cards. Nearly one-fifth of credit-card borrowers were using at least 90% of their available credit in the first quarter of 2024. The New York Fed called attention to America’s “maxed-out borrowers” in a report this week. Credit card balances, and attendant delinquencies, have been rising steadily since late 2021, a sharp reversal from the historic lows recorded at the pandemic’s peak. Delinquencies have risen past pre-pandemic levels, the Fed reports. [USA Today]
Delinquency Is Increasingly in the Cards for Maxed‑Out Borrowers
An increasing number of borrowers are behind on credit card payments. In this post, we explore the relationship between credit card delinquency and changes in credit card “utilization rates.” The nationwide aggregate credit card utilization rate—that is, what share of the aggregate credit limit is being used—was about 23% last quarter, on par with previous quarters. However, the utilization rates of individuals differ widely: 52% of borrowers were using less than 20% of their available credit in the first quarter, while 18% of borrowers were using at least 90% of their available credit (19% were between 20 and 60% utilization, and 11% were between 60 and 90%). [Liberty Street Economics]
UK Slot Machines to Go Cashless as Debit Cards Allowed
The UK government says it intends to let people use debit cards to gamble on slot machines. The move will allow pubs, casinos and slot venues to compete in an increasingly cashless society, ministers argue. Gamblers will still be banned from using credit cards in the machines. And there will also be a cap on how much they can spend in one gambling session, with staff alerted when limits are hit. Systems that require payment authorization, such as Apple Pay, will be allowed, but otherwise contactless payments will remain banned. [BBC]
Cannabis Industry and Gaming Payments Startup Aeropay Is Now Offering an Alternative to Mastercard and Visa
The key to taking on legacy players in the financial technology industry may be to go where they have not gone before. That’s what Aeropay is doing. The provider of pay-by-bank solutions for businesses started out helping cannabis retailers and gaming companies with their payments and is now entering into Visa’s and Mastercard’s territory by innovating the payment networks. With Aeropay, businesses can offer regulatory compliant, cashless and contactless digital payments to their customers, both in-store and online. To do this the company created its own bank aggregator, called Aerosync, that connects bank accounts and enables customizable integrations using open APIs. It can connect over 12,000 banks, and once the merchant connects to a bank account, they can enable customers to pay just like they would in any e-commerce environment. Merchants can also utilize a QR code for payments and not pay fees on the transaction, or bother with cash. [Tech Crunch]
Fed Surveys Find Lasting Appeal for Faster, Digital Transactions
Consumers and businesses, running the gamut of transaction types and across demographics, are pivoting toward faster and digital payment options. Overall, as detailed in two reports by Federal Reserve Financial Services, last year saw a 31% increase in digital wallet use by businesses, and a roughly commensurate 32% increase in consumer usage. As many as 86% of businesses and 74% of consumers said they used faster or instant payments last year. One in 4 consumers said they’d prefer to leverage instant payments to help manage their finances. The Fed’s Consumer Research Brief found that 57% of consumers expect to use faster payment options more extensively in the future. Among the top use cases to benefit from instant payments are online shopping and last-minute bill payments, according to the Fed. [PYMNTS]
Citi Strata Premier Card Replaces Citi Premier
Citi has rebranded its popular mid-tier Citi Premier travel credit card as the Citi Strata Premier Card. The new Strata Premier Card is nearly identical to the old Citi Premier except it has additional travel protections, bonus spending categories and a new limited-time welcome offer. The Citi Strata Premier Card earns transferrable Citi ThankYou points and earns them in bunches. It also currently offers a welcome bonus worth 70,000 points after spending $4,000 in the first three months of account opening. This bonus is worth $700 in gift cards, cash back or travel. But the most notable changes with the Strata Premier are the new travel coverages, including: trip cancellation/interruption, trip delay, lost or damaged luggage, and MasterRental coverage (car rental insurance). [CNBC]
Amex Unveils New Offers to Celebrate the Platinum Card’s 40th Anniversary
Since its release in 1984, The Platinum Card from American Express has been synonymous with luxury and status, offering more than 40 premium lifestyle and travel benefits worth $1,500 in value. Now, to celebrate the card’s 40th anniversary, American Express has announced new, exclusive offers and experiences for card members. Complimentary third night at select hotels. Platinum Card 40% point transfer offer. Special dining benefits. Platinum 40th anniversary Amex Offers. Unique Centurion Lounge menu items. Premium event access. [Forbes]
Credit Card Application Rules by Issuer
Many people get new credit cards to earn valuable bonuses, take advantage of special perks or get interest-free financing. These features can be expensive for card issuers, so they implement rules to limit how often you can get a new credit card. Some rules are explicitly written, while others are learned by trial and error. Learn about the credit card application rules for the major card issuers, so you know when to take advantage of lucrative offers. [USA Today]
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