Interest Rates on Some Retail Credit Cards Climb to Record 33%
Some store credit cards now charge more than 33% interest, after blowing past a symbolic 30% threshold that retailers and banks dared not cross. The average retail credit card now charges 28.93% interest, a record high, according to Bankrate, the personal finance site. In a recent survey of lenders, Bankrate found four retail cards that charge an eye-popping 33.24% annual interest. The retailers: Burlington, Academy Sports + Outdoors, Good Sam and Michaels. [USA Today]
Credit Scores Hit an All-Time High Even Though Households Are Falling Deeper in Debt
Consumers are increasingly relying on credit cards to make ends meet, but their credit rating hasn’t suffered. Even as credit card balances for Americans surpassed $1 trillion for the first time ever, the national average credit score rose two points from a year ago to reach a new high of 718, according to a report from FICO, developer of one of the scores most widely used by lenders. FICO scores range between 300 and 850. Your utilization rate, the ratio of debt to total credit, is one of the factors that can influence your score. [CNBC]
Amazon Unveils Buy Now, Pay Later Option from Affirm for Small Business Owners
Amazon is unveiling its first buy now, pay later checkout option for the millions of small business owners who use its online store. The tech giant confirmed Thursday that its partnership with Affirm is expanding to include Amazon Business, the e-commerce platform that caters to companies. The service, with loans ranging from $100 to $20,000, will be available to all eligible customers by Black Friday, or Nov. 24. It is specifically for sole proprietors, or small businesses owned by a single person, the most common form of business ownership in the U.S. [CNBC]
Survey Finds Bank Customers Predominantly Bank Via Mobile Apps
According to a survey done by the American Bankers Association, U.S. customers use mobile banking apps more than any other method. The survey found that 48% of bank customers use apps on their phone or other mobile devices, compares to 23% who use online banking via their laptop or PC. Only 9% visit branches. The survey found that only 8% use ATMs and 5% use the telephone to manage their bank accounts. [Financial Regulation News]
Americans Buy Now but Want to Pay Later
As wallets open wider, two fin-tech sectors that may be adding to spending are racing ahead, reshaping the financial landscape: “Buy Now Pay Later” (BNPL) and “Early Wage Access” (EWA). The BNPL industry crested a $155 billion valuation; and during the COVID-19 pandemic, the total value of BNPL loans skyrocketed over 1,000 percent. The global BNPL industry is expected to grow to $744.06 billion by 2027, with a global user base nearing 900 million. Seen as a benevolent alternative to payday loans, EWA offers early paycheck access without the traditional interest charges or credit checks—though most are coupled with fees. The EWA ecosystem thrives on two principal models. Direct-to-consumer avenues see providers like EarnIn and MoneyLion grant wage advances from $25 to $100 to users who grant bank access. The apps withdraw the “borrowed” money from users via automatic ACH withdrawal at a predetermined date, usually on the user’s payday. Alternatively, employer-backed models, like DailyPay Inc., collaborate with corporations to offer EWA to employees once they’ve accrued a set dollar amount—much like an employee accruing and using paid time off. [Newsweek]
Different Card Rates for Different Neighborhoods, And It’s Costly, Says GAO in New Report
A new report on credit card debt from the Government Accountability Office has found credit card terms vary with the racial makeup of cardholders’ neighborhoods. The report specifically looked at race-related differences in credit limits, debt levels, and interest rates for those with credit cards, found that cardholders in majority Black or African American and Hispanic or Latino zip codes were likely worse than those in predominantly White zip codes. [CU Today]
PayPal UK Unit Registers as Crypto Service Provider
Payments giant PayPal has successfully registered with the U.K. Financial Conduct Authority as a crypto service provider. Paypal UK Limited, which was entered into the registry on Tuesday, is permitted to engage in “certain cryptoasset activities.” Companies offering crypto services in the U.K. must be approved for registration and comply with the FCA’s anti-money laundering rules. [CoinDesk]
One-Quarter of SMBs Plan to Increase Corporate Card Usage This Year
Approximately 53% of SMBs lack readily available financing sources, and insufficient access to credit represents a key challenge leaving them vulnerable. Even though corporate cards are the most common kind of business financing, only 28% of smaller SMBs have access to them. 25% of SMBs hope to increase their use of corporate cards in the near future, but many challenges stand in their way. [PYMNTS]
UK Watchdog Intervenes Again in Buy-Now-Pay-Later as Users Rise
Britons are turning to unregulated “buy-now-pay-later” credit in ever increasing numbers to pay their bills, the Financial Conduct Authority said on Tuesday, in the latest sign of how the country’s cost of living crisis continues to bite. Companies that offer “buy-now-pay-later” unsecured loans are not regulated by the FCA. The watchdog said its latest Financial Lives survey showed that 27% of UK adults or about 14 million people, have used BNPL at least once in the six months to January 2023, up from 17% in the 12 months to May 2022. Since then, Bank of England interest rates have risen further, making credit more expensive. [Reuters]
New Visa Credit Card Designs Star Groot, Black Panther & Captain America
Marvel fans can now show their love for their favorite characters with new Marvel Visa credit cards featuring designs of Groot, Black Panther, and Captain America. These cards offer special savings and perks that enhance the cardholder experience. Disney Rewards program members can choose from three dynamic card designs that not only showcase the characters but also provide exclusive savings on Marvel merchandise, discounts on Marvel comics subscriptions, and the ability to redeem Disney Rewards Dollars for movie tickets on AMC platforms. [Screen Rant]
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