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News Scan Dec 2015

Credit Card News, Economy News, Banking Industry News - Dec 2014
23
Dec
  • Interest rates on new card offers rose to a one-year high this week after the Federal Reserve increased rates for the first time since 2006, according to the CreditCards.com Weekly Credit Card Rate Report.
  • Multiple issuers responded to the Federal Reserve's 0.25 percent rate increase by hiking APRs on new card offers by the same amount. As a result, the national average annual percentage rate rose to 15.05 percent. When the Federal Reserve raises interest rates, issuers can pass along those rate increases without giving cardholders prior notice. The increase in the interest rate will be applied to the entire balance, not just on new purchases.
  • Among the 100 cards CreditCards.com tracks, 25 advertised slightly higher rates this week. American Express, Wells Fargo, U.S. Bank, Huntington Bank, Key Bank and Comerica were among the issuers that increased rates by 0.25 percent. Capital One also increased interest rates last week, just a few days before the Federal Reserve's announcement.
  • Weekly Rate Report
      Avg. APR Last week 6 months ago
    National average 15.05% 14.99% 14.99%
    Low interest 11.74% 11.67% 11.62%
    Cash back 15.30% 15.27% 15.27%
    Balance transfer 14.15% 14.08% 14.12%
    Business 12.95% 12.87% 12.85%
    Student 13.26% 13.17% 13.14%
    Airline 14.99% 15.92% 15.10%
    Reward 15.18% 15.12% 15.13%
    Instant approval 18.00% 18.00% 17.93%
    Bad credit 22.81% 22.75% 22.73%

22
Dec
  • The economy expanded a touch slower in the third quarter than previously reported, revised government figures show, but the path of growth is still the same: The U.S. running well below the historical norm more than six years into a recovery.
  • Gross domestic product — the sum of all the activity in an economy — increased at a 2% annual pace from July to September, according to the government’s latest update. Previously the Commerce Department had said the U.S. grew at a 2.1% rate after a 3.9% increase in the second quarter.
  • The slight downgrade was triggered by a larger trade deficit and a smaller buildup in inventories than earlier estimates showed.
19
Dec
  • The Fourth Corner Credit Union occupies a prime spot in downtown Denver, not far from the state Capitol. It has a big safe, four teller windows, drive-up service and a banner out front that says, "The Fourth Corner Credit Union Coming Soon."
  • But there's a problem.The Federal Reserve Bank of Kansas City, which oversees Denver, has refused Fourth Corner's request for a "master account," essentially a bank account allowing it to do business.
  • "You can't have a bank chartered by the state of Colorado and then nullified by the federal government," said Mark Mason, an attorney for the credit union. Unless the Fed simply doesn't like the customers.
15
Dec
  • The Federal Reserve's expected hike in its benchmark short-term interest rate this week — combined with rate increases the next few years — is likely to ripple across the U.S. economy, nudging up rates on everything from mortgages to bank savings rates and corporate bonds.
  • But Fed policymakers have stressed they intend to move gradually and in small increments, and will pull back if the economy falters, tempering the impact on consumers and businesses.
  • The Fed is expected to boost rates only a quarter of a point Wednesday and move gradually after that. A 1 percentage point increase in the Fed's rate over the next year could curtail economic growth the following year by 0.15 percentage points and monthly job gains by 30,000, according to Moody's Analytics. Here's how players in various sectors view the coming rate rise.
15
Dec
  • AStandard Chartered plc (STAN.L) has axed at least half a dozen oil and gas advisory banking roles in recent weeks, ending an eight-year attempt to build a global energy M&A team as new CEO Bill Winters moves to rein in costs, people familiar with the matter said.
  • Asia-focused lender Standard Chartered (2888.HK) expanded its energy M&A advisory team just before the global financial crisis by acquiring Harrison Lovegrove, a well regarded boutique advisory firm for oil and gas. At that time, more than two dozen bankers came over to Standard Chartered from Harrison Lovegrove. But Winters, who is cutting 15,000 jobs globally to restore profitability, is getting rid of expensive specialized bankers and taking a step to reduce the bank's global ambitions in the M&A space.
  • The senior managing directors to leave the bank include the London-based head of the energy M&A team, three people aware of the situation said. The sources declined to be identified.
14
Dec
  • According to a new report, America may be reaching an "unsustainable" level of credit card debt in the coming years. The report predicts a net increase of $68.5 billion in credit card debt from 2014 to 2015, despite promising payoff statistics earlier in the year.
  • The average household credit card balance is expected to reach $8,000 by the end of the fourth quarter, which is just $400 below what experts claim is an unsustainable level of debt. In other words, the amount of debt that households are acquiring is outpacing their increased income, which could make it impossible for consumers to keep up with their credit cards in the near future.
  • There was hope in the first quarter of 2015, with Americans paying off nearly $35 billion in credit card debt. That hope was quickly dashed as consumers added $32 billion in debt during the second quarter and over $21 billion in debt in the third quarter. Those are the largest second and third quarter increases since 2009.
08
Dec
  • Last Friday brought a solid report for unemployment and payrolls. But now that the economy is at or near the classic definition of full employment, the underlying trends and opportunities in the jobs market need to be considered. One such measurement that economists and the public should consider is the Job Openings and Labor Turnover Summary, the so-called JOLTS report.
  • On Tuesday, the October 2015 JOLTS report was issued by the Bureau of Labor Statistics. The number of job openings was roughly 5.4 million on the last business day of October. Hires and separations were little changed at 5.1 million and 4.9 million, respectively.
  • Within the separations, the quits rate was 1.9% for the seventh straight month. The layoffs and discharges rate was 1.2%. So, against separations and the broader economy, what exactly does 5.4 million job openings and a 3.6% job openings rate really mean?
07
Dec
  • I recently heard from a source in law enforcement who had a peculiar problem. The source investigates cybercrime, and he was reaching out for advice after trying but failing to conduct undercover buys of stolen credit cards from a well-known underground card market. Turns out, the cybercrime bazaar’s own security system triggered a “pig alert” and brazenly flagged the fed’s transactions as an undercover purchase placed by a law enforcement officer.
  • Law enforcement officials and bank anti-fraud specialists sometimes purchase stolen cards from crime forums and “carding” markets online in hopes of identifying a pattern among all the cards from a given batch that might make it easy to learn who got breached: If all of the cards from a given batch were later found to be used at the same e-commerce or brick-and-mortar merchant over the same time period, investigators can often determine the source of the card breach, alert the breached company and stem the flow of stolen cards.
  • Of course, such activity is not something the carding shops take lightly, since it tends to cut into their criminal sales and revenues. So it is that one of the more popular carding shops — Rescator — somehow enacted a system to detect purchases from suspected law enforcement officials. Rescator and his crew aren’t shy about letting you know when they think you’re not a real criminal.
06
Dec
  • An uneasy calm prevails in financial markets over the first increase in US interest rates in almost a decade, which is widely expected later this month, according to a leading group of central bankers.
  • The restrained reaction, especially from emerging markets, to signals from the US Federal Reserve that rates will start to rise have been encouraging, the quarterly update from the Switzerland-based Bank for International Settlements (BIS) said. However, it said it expected volatility to return.
  • “Calm has reigned over financial markets, but it has been an uneasy calm,” said Claudio Borio, the head of the BIS monetary and economic department.
01
Dec
  • Mistakes of the past mean little to anyone in the modern banking industry. And now an unforgivable trend may have just hit its tipping point.
  • I want to say upfront that this problem alone won't be as devastating to the global economy as the housing bubble and burst was. But it could end our nice little -- albeit slow -- recovery for a while... and it certainly could affect the rate at which the Fed tightens its monetary policy.
  • And if any other major economic disaster accompanies this problem -- like, say, a few countries exiting the euro or a full-blown Japanese depression -- this could be the trigger to send the U.S. economy over the cliff.