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CARDNEWS FOR CONSUMERS
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(3/31/04)
Zero% 2005
The zero percent APR for bank credit cards is still alive and well, even though there are rumblings that the Feds may jack-up short-term rates by the end of 2004. Fleet is now offering a 0% interest rate on new purchases through June 2005 on its "Platinum VISA," while Citibank and Advanta are offering the 0% rates through April of next year.
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(3/30/04)
Super Fun
A Comedian and Kryptonian have come together to entertain visitors with chronicles of their daily exploits via an American Express Web site. Jerry Seinfeld and Superman star in a four-minute webisode, entitled "A Uniform Used to Mean Something."
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(3/29/04)
e-Checks
For the first time, the number of ACH debits originated by commercial financial institutions exceeded the number of ACH credits, thanks to the rapid growth of consumer e-checks. Collectively, more than 1.3 billion e-check payments were made last year, a 154% increase over the prior year.
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(3/26/04)
Laptops for Balances
A Minneapolis bank has come up with a novel way to pull in balances to its new credit card. Universal Savings Bank is offering brand new laptop computers in exchange for transferring a balance of at least $5,000 from other credit cards. The "Upfront Rewards VISA Platinum" also requires cardholders to maintain a balance of at least $3,500 on the card for at least 18 months.
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(3/25/04)
Delinquency Spike
Credit card delinquency, based on the number of accounts 30+ days past due, hit an all-time high of 4.43% in the fourth quarter. Based on total dollars outstanding, bank card delinquencies rose to 4.92%, compared to the previous quarter's 4.66%, but below the record of 5.45% set in 1996.
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(3/24/04)
Spam Spoof
Nearly 300 email fraud and phishing attacks were launched last month including 58 on Citibank and 42 on PayPal. Phishing attacks involve the mass distribution of spoofed email messages with return addresses, links, and branding which appear to come from banks, insurance agencies, retailers, or credit card companies.
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(3/23/04)
Free-Loaders
The number of Americans paying-off credit card balances in-full each month has edged down for the third consecutive year. After peaking at 44.4% in 2000, the number of free-loaders, who avoid paying credit card interest charges, has slipped to 38.3%, about the same level as 1995.
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(3/22/04)
Grace Periods
The time between the monthly closing date and payment due date, or the grace period, has been steadily shrinking over the past decade from 27.8 days to 20.6 days. The "grace period" is also jokingly referred to as the time during which you pray to come up with the funds to make the payment.
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(3/19/04)
Over-Limit Fees
Fees for exceeding the credit limit increased at a slightly faster pace than late fees last year. During 2003, the average over-limit fee increased 4.8%, compared to 4.6% for late payment fees, ending the year with an average fee of $29.23. Between 1994 and 1999, over-limit fees grew 96%, from $12.75 to $24.96.
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(3/18/04)
Debit Backlash
Americans love their debit cards and are unhappy when merchants refuse to take them. Nearly 90% of consumers say they would you take their business elsewhere if a merchant refused to accept their VISA or MasterCard-branded debit card.
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(3/16/04)
Financial Needs
A new research report has found that nearly two-thirds of Americans prefer to have all their eggs in one basket when it comes to their financial needs. However, the study found that 77% of consumers currently use a credit card from a financial institution other than their primary bank.
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(3/15/04)
Robust Credit
This year came in like a lion, as the pace of revolving credit picked up substantially in January. Americans added $5.4 billion in revolving credit in the first 31 days of 2003, compared to $3.1 billion for January 2002. Bank credit card debt (excluding store and gas credit cards) at the end of the fourth quarter was $672.3 billion, or roughly 90% of total revolving credit.
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(3/12/04)
Card Colors
The range of card colors is heading down scale from gold, platinum, and titanium, to bronze and silver cards. This week, Citibank introduced the "Citi Bronze AAdvantage MasterCard" for frequent travelers, and Household Bank/Orchard Bank is currently promoting its "Silver MasterCard" to consumers with lower credit scores.
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(3/11/04)
Citi Secured Card
The nation's largest credit card issuer is now targeting Asian and Hispanic immigrants who have little or no credit history with a new credit card. The secured "Citi MasterCard" is linked to an 18-month CD and requires annual income of at least $8,000.
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(3/10/04)
Late Fees
After doubling between 1994 and 1999, increases in late payment fees on credit cards has slowed considerably. During 2003, the increase in late payment fees slowed to its lowest level in more than a decade.
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(3/9/04)
35% Gold
Notwithstanding a current 4% prime rate, you could pay an APR as high as 35% for a major credit card. Miss payments and the rate could go as high as 41%. CompuCredit and Columbus Bank & Trust have restarted marketing of the "Aspire VISA Gold," targeted at consumers with weak credit scores.
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(3/8/04)
Card Influence
A new survey has found that online marketing and Web sites have a dramatic impact on the further learning and purchase decision phases of the consumer purchase process. Furthermore, in the credit/banking segment, Web sites ranked as the "most influential," scoring a 3.7 on a scale of 1 to 7, with 7 as "very much."
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(3/4/04)
Credit-O-Meter
Americans appear to be doing okay when it comes to credit utilization, as the overall national average credit score now sits at 678, on a scale from 330 to 830. Based on credit bureau data, less than 17% of Americans use more than 50% of their available credit.
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(3/3/04)
Space Rewards
American Express is taking its "Membership Rewards" program above the
stratosphere and into the mesosphere with a new option to redeem points for
space flight experiences. For 20 million points you can reserve a seat for
a ride aboard a sub-orbital spacecraft that will climb to an altitude of 62
miles, expose you to experience several minutes of weightlessness and treat
you to Earth views from space.
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(3/2/04)
VISA ARI
Starting this week, if you carry any US-issued VISA credit card you will benefit from automatic "Auto Rental Insurance." The VISA "ARI" benefit, also known as "Collision Damage Waiver" coverage, was previously limited to "Gold" and "Platinum" VISA cards.
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(3/1/04)
Southwest Expansion
Southwest Airlines has added two new VISA cards to their fleet. This week, the airline and its card partner, Bank One, introduced the "Rapid Rewards VISA Business" card, and the "Rapid Rewards VISA Signature" card.
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