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Delinquencies are increasing; Warning signs of problematic credit card use

by Ana Lopez
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Bread, Discover and JPMorgan Chase report higher credit card delinquencies

Three companies saw their higher credit card delinquencies and charge-off rates increase in February. Bread Financial, Discover and JPMorgan Chase reported in recent press releases and SEC filings that these numbers for February were higher than those of both the previous month and a year earlier. Bread Financial said its February default rate was 6.0%, compared to 5.8% in January and 4.4% in February 2022. Discover also saw higher rates. The credit card delinquency rate reached 2.74% in February, up from 2.67% in January and 1.79% in February 2022. JPMorgan Chase said the credit card delinquency rate was 0.88% in February, higher than the 0.83% it saw in January and the 0.72%. % registered in February 2022. [PYMNTS]

Here are 7 warning signs of problematic credit card use

There are several warning signs that you may be overspending on your credit cards, and not all of them are obvious. You will be rejected for balance transfers. You are at or near your spending limit. The minimum payments are becoming increasingly difficult to keep up with. You have no idea how much you owe. You hide your credit card expenses. You have more credit cards than you can keep track of. Your credit card debt affects your financial life in other ways. [The Motley Fool]

Over 48% say carrying a credit card balance boosts your credit score

A February survey from US News & World Report found that nearly half of respondents believe that carrying a balance on a credit card improves your credit score. Fortunately, almost 52% know that it does not increase your score. And when you carry a balance, you pay compound interest on your purchases. Just over 16% of respondents don’t know what their credit scores are. More than 35% say their credit reports include a breakdown of their credit score, but more than 56% knew their reports included a list of their credit activities. Your credit score is not on your credit report. Exactly 47% falsely say that an increase in income results in an increase in credit scores. Just over 40% correctly identify FICO as the score most commonly used by lenders. [U.S. News & World Report]

Visa, Mastercard $5.6 billion settlement with retailers upheld

A federal appeals court on Wednesday upheld a $5.6 billion antitrust settlement with more than 12 million retailers that accused Visa Inc and MasterCard Inc of misrepresenting credit and debit card fees. The 2nd U.S. Circuit Court of Appeals in Manhattan rejected claims that a class action should not have been certified due to confusion over who deserved damages, and that the $523 million in legal fees awarded to the retailers’ lawyers were too high. [Reuters]

A new CFPB report reveals the credit habits of Buy Now, Pay Later users

Between the first quarter of 2021 and the first quarter of 2022, 17% of Americans borrowed using buy now, pay later, a new report from the CFPB on consumer use of BNPL states. While the study found that many BNPL users had relatively healthy personal finances, it concluded that, on average, BNPL borrowers are much more likely to be highly indebted, run on their credit cards, have delinquencies in traditional credit products, and use high-yield funds. Services. [CNBC]

Amex focuses on millennials, Gen Z for growth

American Express emerged from the Great Recession and was at a crossroads. Executives were debating whether to overturn the connotations of exclusivity by serving a broader consumer base, or whether to double the premium card space and remain more exclusive. Betting on its ambitious award, Amex opted for the latter. About 70% of new Amex cardholders bought premium cards last year, including all cards that have an annual fee. Millennial and Gen Z consumers made up three-quarters of that new group, a larger share than the company has seen in the past two decades. [Payments Dive]

USDA governs contactless SNAP payments

In an effort to modernize its systems, the U.S. Department of Agriculture, Food and Nutrition Service (FNS) is launching a five-state pilot using contactless mobile payments for recipients in the Supplemental Nutrition Assistance Program (SNAP). By enabling contactless and mobile payments, the FNS creates a more flexible program that takes into account the changing behavior of consumers at all income levels. This move is a huge step forward in modernizing payment systems for government benefits and represents a positive shift to meet both customers and retailers at established and growing technology points. Previous research from the North American PaymentsInsights study found that 53% of Apple iOS users and 41% of Google Pay consumers used a digital wallet to make an in-store purchase over a 12-month period. [Payments Journal]

Long-awaited Fed Digital Payment System launches in July

The Federal Reserve’s digital payment system, which is promised to accelerate the way money moves around the world, is set to roll out in July. With FedNow, bill payments, remittances such as paychecks and government payouts, as well as a host of other consumer activities can occur faster and at a lower cost. Institutions participating in the program have access seven days and 24 hours a day, unlike a system that currently closes on weekends. Proponents of the program say the money gets to people much faster. For example, they said that government payments, such as those made in the early days of the Covid pandemic, would have been credited to accounts immediately rather than the days it took to reach most people. [CNBC]

The good, the bad and the ugly of buying crypto with your credit card

As markets continue to fluctuate and volatility remains at an all-time high, nearly 47 million Americans who have never bought or traded crypto said in a survey last year that they plan to do so this year. The growing interest in digital currencies and stablecoins has grown steadily in recent years, with nearly 56% of the US adult population saying they have purchased, owned, traded or used some form of crypto in the past invested. A 2021 survey by GamblersPick of 1,000 US crypto investors found that 25% of respondents have purchased crypto using a credit card rather than fiat currency. Some exchanges have made it easier for buyers to buy crypto, accepting both debit and credit cards as payment. Exchanges such as Pionex, Uphold, Bybit, Binance, CoinSmart and Coinmama currently allow users to buy crypto, using a Visa or Mastercard. [Coin Codex]

Cuban banks now accept Russian MIR ATM cards

Several Cuban banks in Havana now accept Russian MIR debit cards, the equivalent of Visa or Mastercard in Russia or UnionPay in China. ATMs now display the logo of the Russian payment system and offer an option to withdraw money from cards issued by Russian banks, meaning Russian visitors to the island can access their money in accounts in Russia. The money is provided in Cuban Pesos, with the Ruble/Peso exchange rate currently being around 1 to 1.5. [Russia Briefing]

Mobile payments as an engine for financial inclusion

Financial inclusion is the ability of individuals and businesses to access financial products that are affordable, convenient and delivered in a sustainable manner. According to a World Bank report, nearly a third of adults were still categorized as unbanked in 2017. About half of the unbanked were women from poor rural households or unemployed. It has been cited that exclusion from the financial system is one of the biggest hurdles to addressing the problem of poverty on a global scale. In many developing countries, more than half of households do not have an account with a financial institution. In addition, small businesses said easy access to affordable financing has also hindered their ability to grow. Mobile payments can revolutionize financial inclusion by providing affordable and efficient transactions, creating a platform for business growth and improving security. [Payments Journal]

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