More Subprime Borrowers Are Missing Loan Payments
Consumers with low credit scores are falling behind on payments for car loans, personal loans and credit cards, a sign that the healthiest consumer lending environment on record in the U.S. is coming to an end. The share of subprime credit cards and personal loans that are at least 60 days late is rising faster than normal, according to credit-reporting firm Equifax. In March, those delinquencies rose month over month for the eighth time in a row, nearing their pre-pandemic levels. [The Wall Street Journal]
Mastercard Launches ‘Smile to Pay’ System Amid Privacy Concerns
Mastercard is rolling out a controversial program that will allow shoppers to pay at the till with a mere smile or wave of the hand, as it tries to secure a slice of the $18 billion biometrics market. While face recognition technology has long raised eyebrows among civil rights groups, the payments giant said it was pushing ahead with a biometric checkout program it claimed would speed up payments, cut queues and provide more security than a standard credit or debit card. [The Guardian]
Over 40% of Shoppers Have Made a Late Payment Using Buy Now, Pay Later
The share of American adults who’ve used buy-now, pay-later services in 2022 has increased to 43%, a 12 point jump from 2021, according to LendingTree. Of those who have used these kinds of services, 42% have had to pay some kind of late fee. If 2 in 5 people have already missed a buy-now, pay-later payment when delinquency rates are this low, it could portend even more missed payments as those rates start to climb again. [Grow From Acorns]
Star Alliance Plans Credit Card for Redeeming Points Across 26 Airlines
Star Alliance, the largest of the three global airline groups, is planning to offer a co-branded credit card that will allow a person to redeem points across all 26 members. The card, to be launched later this year, will allow users to earn points via their spending, like a regular credit card, and then redeem those points via the frequent-flyer programs of any of the airlines. Star Alliance members span airlines from Singapore Airlines to Deutsche Lufthansa and United Airlines. The unusual move is aimed at better linking peoples’ credit card spending with loyalty miles. [Bloomberg]
Greenlight, a $2.3 Billion Fintech Focused on Kids, Launches Credit Card for Parents
Greenlight, the fintech company that pitches parents on kid-friendly bank accounts, is launching a credit card. The Greenlight-branded card, offered through Mastercard, offers up to 3% unlimited cash back on all purchases and gives parents the option to automatically invest those cash rewards in stocks and ETFs to spend on family-related expenses. Parents must opt into the automatic investment feature, and if they don’t want their funds invested in the ETFs Greenlight pre-determines are relatively safe, they can also choose to invest that cash in other ways through Greenlight’s investment app or opt for the cash to go directly to their bank account. [Tech Crunch]
Capital One Expands Access to its Travel Portal, Adds Turo Partnership
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Capital One has announced that all flagship Capital One rewards credit card holders can now use Capital One Travel to book travel and even use their rewards to cover the cost of their reservation. Capital One Travel is the card issuer’s online travel booking portal that comes with extra features, such as the ability to freeze the price of a flight, get a price match of competitor offers, and anticipate price fluctuations for flights. Capital One also announced a partnership with the peer-to-peer car-sharing marketplace Turo, which provides travelers with an alternative to traditional rental car companies. Venture and Venture X cardholders will now be able to earn 5 miles per dollar and 10 miles per dollar, respectively, when they book through the Turo app or website. [Investopedia]
How Mobile Apps Have Become the Preferred Shopping Channel for Young and Old
When it comes to shopping, it’s becoming a mobile world. A new report reveals that 88% of consumers surveyed have at least one shopping app on their phone, 50% of respondents have more than four shopping apps, and 9% have more than 10. Given the proliferation of mobile-shopping apps, consumers in the United States spent nearly 3 billion hours using them in 2021. From a demographic standpoint, consumers under age 44 are the biggest users of mobile-shopping apps, with 96% of 18 to 44-year-olds having at least one mobile-shopping app and 61% of that age group having more than four. A key driver of why younger consumers are embracing mobile shopping so readily is that they have grown up with smart phones. [Digital Transactions]
Capital One Student Cards Have New Welcome Offers, Letting You Earn Up to $100 Quickly
The Capital One SavorOne Student Card and the Capital One Quicksilver Student Credit Card are currently offering a limited, one-time welcome bonus of $100 after new cardholders are approved and spend $100 within the first three months of opening an account. The $100 welcome bonus can be used in several different ways: as a statement credit on the account, to pay for purchases via PayPal or Amazon or to buy gift cards. [CNBC]
How School Districts Can Incorporate Financial Literacy
American schools have room to grow when it comes to teaching kids about money. Fewer than half of American states (21) integrate financial coursework into another class, while just seven states require a stand-alone finance class. We are, however, seeing great progress in the move to implement a financial literacy education for all students: Florida recently passed a bill to include personal finance education as a requirement for graduation, and 26 other bills are pending in legislatures around the U.S. Data on the effectiveness of financial education is clear. Students who learn about money in school from a young age are less likely to carry credit card debt, have better credit scores, find it easier to make ends meet each month, and are more likely to apply for aid. They’re even more likely to plan for retirement. [Fast Company]
Congress Should Repeal the Durbin Amendment, Not Expand It to Credit Cards
Last week’s Senate Judiciary Committee proceedings made it quite clear that Senator Dick Durbin wants to extend price controls and routing mandates to the credit card market. For those who don’t remember, Durbin was the author of Section 1075 of the 2010 Dodd-Frank Act, also known as the Durbin Amendment, which placed interchange caps and routing restrictions on debit card purchases. The Durbin Amendment has not worked out so well for consumers. Congress should have repealed it in 2017, but Durbin and his acolytes are not about to admit defeat. [Forbes]
How Credit Unions in California, Hawaii Are Rethinking Branch Models
Credit unions are modernizing their branch networks by incorporating smaller, more efficient designs and creatively managing real estate. Institutions in high-density markets such as California and Hawaii are seeking to meet the needs of members who prefer brick-and-mortar offices for complex financial needs while being fiscally efficient. Moreover, they are rethinking how legacy locations and new facilities can cater to younger demographics. [American Banker]