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News Scan June 2015

Credit Card News, Economy News, Banking Industry News - Apr 2014
  • The United States may benefit if Greece defaults when its latest loan payment is due on Tuesday, as this may set the stage for a permanent solution to the country’s debt crisis, some economists believe.
  • The White House on Monday signaled its support for European creditors, who demanded that Greece enact stricter austerity measures if it wants access to another tranche of its bailout fund. Without it, Greece cannot pay back the $1.73 billion owed on Tuesday to the International Monetary Fund. Greece now awaits a July 5 referendum on the new bailout measures.
  • But although a Greek default carries some near-term risks for the U.S., such a move may actually help Greece broker a deal that with time would lift its depressed economy.
  • U.S. banks are still taking on too much risk in providing funds for mergers and acquisitions even as leveraged lending declines from record levels, the Office of the Comptroller of the Currency said in a report Tuesday.
  • “The combination of higher initial leverage, weaker loan structures and riskier borrower profiles indicates increasing credit risk in this segment, which remains a significant supervisory concern,” the OCC said in releasing its Semiannual Risk Perspective, which looks at threats facing the national banks it oversees.
  • Into the first months of this year, “the market trends and the monitoring we’ve been doing have shown some positive signs,” said the OCC’s deputy comptroller for supervision risk management, in a call with reporters. Banks are showing progress in complying with earlier demands from regulators to dial back risk, the agency said.

5 Credit Cards With No Spending Limit

Source: Credit.com Category: Credit Card News
  • Life can be unpredictable, and you never know what you may need to spend money on tomorrow. For example, homeowners may be forced to make costly repairs, and business owners may have to take an expensive trip with very short notice. In these situations, you may suddenly need more spending power on your credit cards than you might have previously anticipated.
  • Fortunately, there are several credit and charge cards offered with no preset spending limits. Here are five cards that allow you to make the charges you need.
  • Chase Sapphire Preferred: Once approved for this card, Chase will designate a credit access line for your account. However, you are permitted to exceed the account on a case-by-case basis. And when you do exceed this amount, you will not be charged an over-limit fee. The decision to allow you to charge beyond your credit access line is based on your payment history, your income and other factors.

How To Crush Credit Card Debt, From An Ex-Banker

Source: Forbes Category: Credit Card News
  • We are a nation addicted to credit card debt. Americans have amassed $857 billion of it. As we begin to forget the 2008 financial crisis, banks have once again started aggressively marketing credit cards. I receive mail every week promising me bonus points, extra cash back and a lifetime of plastic-induced happiness. The marketing is working. In April, credit card debt grew at 11.5%, its fastest pace in years. The higher costs will take effect over the next two months, letters sent by the company indicate. Interest charged on balance transfers, and cheque and money transfers will also rise by the same percentage.
  • Credit cards can be remarkably useful and lucrative spending tools, when used responsibly. If you pay your balance in full and on time every month, you are receiving an interest free loan, often with some airline miles on top. However, over 40% of Americans are not able to pay their balance in full. Instead, they are borrowing money at interest rates that are usually well above 15%. That means the typical family is paying over $1,500 of interest every year. In a world where middle class families feel increasingly squeezed, this is too much money to be lost to interest
  • The U.S. economy is on the mend. Finally, the global economic crisis of 2008 and recession appear to be in the rearview mirror. The Federal Reserve's latest policy meeting revealed that Chair Janet Yellen and team remain on track to begin interest rate hikes this year. The Fed’s ultra-loose monetary policy stance, with near-zero percent interest rates, has served its purpose, and the central bank is signaling the economy is strong enough to handle a gradual move higher in interest rates.
  • There are several economic trends the Fed is monitoring in regards to the timing of the first interest rate hike, which many economists expect to come at the September 16-17 Fed policy meeting. Here is a quick look at economic trends the Fed is monitoring:.
  • 1. GDP growth rate. Overall total gross domestic product growth for 2015 will likely be 2.5 percent, according to The Haverford Trust Co., a Philadelphia-based wealth and advisory firm. The 2.5 percent forecast follows a 2.4 percent GDP rate in 2014, but it still remains below a more historically normal 3.5 percent growth rate. A key driver of this year's growth is the consumer – after all, consumer spending accounts for roughly 70 percent of U.S. economic growth.

Confidence in U.S. Banks Low but Rising

Source: Gallup, Jun Category: Banking Industry
  • Seven years after the worst financial crisis in the U.S. since the Great Depression, the percentage of Americans expressing "a great deal" or "quite a lot" of confidence in banks remains low (28%), but this is higher than their 21% confidence in 2012.
  • About half of Americans (45%) have "some" confidence in banks, while 26% have "very little" confidence or none at all.
  • These results are based on a June 2-7 Gallup poll that included Gallup's latest update on confidence in U.S. institutions. Like confidence in nearly every other major institution Gallup has tested, Americans' current confidence in banks is below the 1979-2015 average of 40%.
  • Since the worst of the financial crisis has passed, those watching the markets and the economy have been waiting for one thing: inflation . And at least one economist thinks inflation might already be here.
  • So far, of course, there's been no inflation to be found anywhere. "Core" inflation - which excludes the more volatile cost of food and gas - has been running at around 1.7% or so over the last couple years, below the Federal Reserve's 2% target.
  • But looking at consumer prices isn't enough. What really needs to be in place for prices to take off are wages, which have also been more or less flat compared to consumer prices over the last several years.

Should you use your credit card to tip?

Source: CBS News Category: Credit Card News
  • You have two options for tipping at a restaurant: Tipping in cash or including the tip on your credit card. (Notice that there is no third option to not tip at all. Don't be a cheapskate.) Is it better to tip with cash or with a card? That depends on the perspective involved.
  • From the viewpoint of the server or person being tipped, cash is generally preferred. That is not just because a less scrupulous server may skip reporting some cash tips as income and evade taxes. Merchants have to pay a small fee to the credit card company for each payment that is processed. Some restaurant owners deduct a portion of those fees from your server's tip, reducing the amount that you intended to leave for them.
  • There is also a time lag associated with the tips based on credit cards. The restaurant manager/owner must check the receipts and determine how much cash your server is owed for the tips on their shift. Servers may have to wait for some time after their shift is over to receive their tips, which can be troublesome if your server needs to be somewhere else quickly after work for a family obligation or second job. In other cases, the tips are added onto the paycheck, which can cause a cash-flow problem for your server.
  • The use of bank branches fell by 6% last year as customers channelled more transactions over phone networks and the internet, according to a report published on Sunday that predicts the use of smartphones and tablets will usurp branches this year.
  • It insists, however, that banks are not giving up on bricks and mortar altogether despite a wave of closures and job cuts in recent years.
  • The British Bankers’ Association (BBA) and the consultants EY point to a new wave of digital technology that banks are preparing to adopt. Among the ideas is one of Halifax to create a wristband that can check the wearer’s identity using their heartbeat. Royal Bank of Scotland has already introduced some fingerprint verification.
  • Job openings in the healthcare industry soared in April to a new record high in more than 14 years of data, while hiring barely budged. It's great news for industry professionals who are seeking work or a pay raise. Here's how much those help-wanted ads have been on a tear:
  • The 910,000 listings in the healthcare industry almost doubled the 513,000 who were added to payrolls, meaning there were about 1.8 jobs available for every person who was hired. Across all private employers, that ratio tilted in the job seeker's favor for the first time ever in April, as openings outpaced hires by a rate of 1.05. Take a look at the relative tightness in the health-care jobs market, compared to all industries, with a reading of 1 here showing the listings on par with new staff:
  • The further tightening in the health-care market that's empowering employees could bode well for pay increases, which have been sluggish to materialize in this expansion. Wages in the industry grew by 2.2 percent in the year through April after a 2.3 percent increase the prior month that was the strongest since the end of 2012, separate Labor Department figures showed last week. Average hourly earnings for all private employees rose 2.3 percent in May after 2.2 percent in the previous month.

Deutsche Bank headquarters raided in probe

Source: USA Today Category: Banking Industry
  • A Law enforcement officials raided Deutsche Bank's headquarters early Tuesday on suspicions of tax fraud related to customer securities transactions, bank officials confirmed.
  • "Today, offices of Deutsche Bank in Frankfurt are being searched on behalf of the Wiesbaden Public Prosecutor's Office. The search is related to an investigation into securities transactions by clients," the bank said in a statement. "Employees of the Bank are not accused of wrongdoing."
  • The bank, and at least three others in Germany, have come under suspicion for taking advantage of a tax loophole – now closed – in a practice known as "cum/ex" or "dividend-stripping." It occurs when a stock is bought then sold, and then used to obtain a rebate on capital gains tax withholding that was actually never paid, according to the Frankfurter Allgemeine Zeitung, a German business daily.
  • On Monday, June 8, 2015, CardHub released its latest credit card debt study that delivered good and bad news on the state of the U.S. economy.
  • CardHub’s analysis shows in the first fiscal quarter of 2015, U.S. consumers paid down $34.7 billion in amounts owed to credit companies – 7 percent more than in the past two years. However, those numbers could be inflated because Americans ended 2014 with more than $57 billion in new debt, raising the average household balance of credit card debt to $7,177, the largest amount in six years.
  • CardHub predicts 2015 will end in a similar pattern as 2014 – with American consumers more willing to spend money, debt being paid down and new debt being taken on. The analysis predicts Americans will hold approximately $55.8 billion in credit card debt at the end of the year – a slight decrease from last year.
  • A small private bank controlled by a reclusive Brazilian billionaire shows up more than two dozen times in U.S. prosecutors’ corruption charges against world soccer officials. It’s hardly the bank’s first brush with scandal.
  • Delta National Bank & Trust Co. has had at least three previous run-ins with authorities on two continents over the past 15 years, including when Brazilian lawmakers probed its role as the banker for a scandal-tinged head of national soccer. In 2003, Delta pleaded guilty in the U.S. to failing to report transactions linked to a Colombian drug cartel.
  • Even so, Delta, with U.S. assets of $467 million, continued operations from its offices in Manhattan, Miami and Geneva. Some of that business, U.S. prosecutors alleged last week, included processing millions of dollars in bribe payments from a Sao Paulo-based sports marketing business to soccer officials affiliated with FIFA. Delta wasn’t named as a defendant or accused of any wrongdoing in a 47-count indictment released by the Justice Department.

8 Credit Cards With No Annual Fee

Source: Credit.com Category: Credit Card News
  • Are you one of those people who refuse to pay an annual fee for a credit card? Although some of the best cards offered have steep annual fees, not all of them do. And while paying an annual fee can be a good value for big spenders, those with more modest spending requirements may not find the added costs to be justified.
  • Thankfully, there are no-fee credit cards that offer impressive interest rates, promotional financing and even reward travel opportunities, but you have to know where to look. Here are eight of the top credit cards with no annual fee and what they offer.
  • 1. Amex Everyday: This card offers double points for purchases at U.S. supermarkets, and one point per dollar spent elsewhere. The points are earned in the American Express Membership Rewards program, which can be redeemed for gift cards, merchandise or travel reservations. But in addition, this is the only no-fee card that allows you to transfer points to airline miles. Furthermore, cardholders receive a 20% points bonus each statement period when they make more than 20 transactions. Other benefits include purchase protection and travel insurance policies.