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News Scan Apr 2015

Credit Card News, Economy News, Banking Industry News - Apr 2014
  • Low oil prices are spurring faster growth in the USA and other advanced economies, the International Monetary Fund said Tuesday, projecting the global economy will expand by 3.5% this year.
  • That's up from 3.4% growth in 2014 as the pickup in the advanced nations offsets a slowdown in emerging markets. The IMF released the forecast as finance ministers and central bankers from 188 countries converge on Washington for this week's IMF-World Bank spring meetings. Global growth is likely to accelerate to 3.8% next year.
  • At a news conference, IMF Economic Counselor Olivier Blanchard described this year's growth as "moderate and uneven."
  • After a tough fourth quarter, the nation’s biggest banks will reveal this week whether they managed a turnaround in the first three months of 2015.
  • First-quarter earnings season for the largest banks kicks off Tuesday, when Wells Fargo and JPMorgan Chase & Co. report their results. Charlotte’s Bank of America will release its earnings Wednesday.
  • Bank of America, JPMorgan Chase and Citigroup – three of the four largest U.S. banks – disappointed investors in the fourth quarter as they posted lower profits compared with the same period the year before. Only Wells Fargo posted higher earnings.
  • CHARLES ROTBLUT: Which is the better credit-card reward: cash back or miles/points? It’s a question I’ve been trying to answer as I review the cards my wife and I use. We are one of those couples who charge every possible expense in order to maximize rewards. Since we do this (and yes, the bills are paid in full every month), it only makes sense to maximize the compensation we receive for our spending.
  • In trying to figure out the answer, I’ve spent time looking at credit-card offers and reading websites such as The Points Guy and Nerd Wallet. Here’s what I’ve determined: It depends. Not the clear answer you were probably looking for, but there are a few concepts that can add clarity and will help you make the best decision for your personal situation.
  • The first, and most important, concept is to understand the value of a credit card’s rewards. The rule of thumb is that $1 of spending is worth one cent (1%). Never assume that it is a universal rule, because it is not. For example, one of my cards pays one point for every dollar spent on most categories and the points can be converted into Visa gift cards.
  • Bonus day just got a US$155 million shot in the arm for bankers at Goldman Sachs Group Inc, Robey Warshaw LLP and Bank of America Corp.
  • The only three investment banks to advise on Royal Dutch Shell Plc's 47 billion-pound acquisition of BG Group Plc may split a fee of that size for their work on the deal, according to estimates from New York-based researcher Freeman & Co. The deal is the largest takeover announced in 2015, and the oil and gas industry's biggest merger in at least a decade.
  • TBank of America could make as much as US$65 million for its role as sole adviser to Shell, while Robey Warshaw and Goldman Sachs will split as much as US$90 million, early estimates showed.
  • Credit card companies are in the business of making money, yet they often advertise incentives that feature rewards such as cash back on credit card purchases. For example, Chase (JPM) offers up to 5% cash back on its Chase Freedom Rewards Card, as does the Discover Card (DFS). How can these companies offer such seemingly generous deals for consumers and still make a profit? (For more, see: Credit Card Tutorial.)
  • Cash Rewards Programs: The Fine Print: First, it is important to read the fine print. Most cash rewards programs have an annual maximum limit, so that it may offer 5% cash back rewards, up to a maximum of $1,500 per year. Other cards only offer cash back for certain categories of purchases, such as at restaurants or gas stations. The fine print for the Discover card's latest cash back bonus program is revealing. It reads:
  • *Sign up to earn 5% Cashback Bonus on up to $1,500 in combined restaurant and movie purchases made from 4/1/15 (or the date on which you sign up, whichever is later) through 6/30/15. Restaurant purchases are those made at merchants classified as full-service restaurants, cafes, cafeterias and fast food locations.
  • On Monday, we published Larry Summers' latest op-ed in The Washington Post, which opened with the former Treasury Secretary and Harvard president writing, "This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system."
  • What Summers is referring to is the creation of the Asian Infrastructure Investment Bank, a new banking consortium led by China that will back investment in Asian and emerging-market economies. This bank serves as a direct challenge to the World Bank and the IMF, the traditional sources of international funding, and organizations in which US economic interests have a strong voice.
  • The AIIB's founding members include Russia, Brazil, and India, as well as major European economies like France, Germany, and the UK. Last week, Business Insider's Mike Bird outlined how the formation of the AIIB has been an embarrassment for the US government all along
  • Whether it’s getting cash back, airline miles or just boosting your credit, we all want to feel like we’re winning the credit card rewards game. With so many choices out there, it can be tough to know what kind of card is best for you.
  • Before opening any line of credit, of course, make sure you know what you’re getting into. What’s the interest rate, or APR? (APR is the annual rate percentage rate of interest you’ll be charged on all or a part of the credit card balance if the full amount isn't paid by the due date.) Does it have an annual fee? Do you have to spend a certain amount before you earn any rewards?
  • Cash back cards: The appeal of a cash-back rewards card is pretty straightforward: You earn “cash back” on your purchases, typically 1%, 2% or more of the amount charged each month. So, for instance, if you make $2,000 in credit card purchases this month, you’d get $40 from your issuer if you have a 2% cash back card. Also note that some cards give more cash back depending on the category of purchase – 5% back at supermarkets, 2% at gas stations, etc.