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News Scan Nov 2015

Credit Card News, Economy News, Banking Industry News - Nov 2014
  • Factory activity in the Midwest shrunk in November and contracts to buy previously owned U.S. homes rose marginally, the latest suggestions that economic growth will probably remain modest in the fourth quarter.
  • The raft of weak economic reports is not likely to stop the Federal Reserve from hiking interest rates next month provided job growth does not slow significantly in November, economists say.
  • "It suggests that there is no obvious uplift for growth in the near-term," said Millan Mulraine, deputy chief economist at TD Securities in New York.
  • topcreditcardprocessors.com, the independent authority on merchant services, has named National Bankcard Inc. the best online credit card processing service for November 2015. Each month the independent research team at topcreditcardprocessors.com evaluates thousands of services to decide which services produce the most impressive solutions. The rankings are updated on a monthly basis to account for the latest successes within the credit card processing industry.
  • These services are put through the topcreditcardprocessors.com proprietary evaluation process in order to establish which services offer the best overall solution. Services are identified based on their performance in a benchmarking and analysis of their core services. This process consists of the use of a set of evaluation criteria, interacting with customer references, and performing various market and industry research projects.
  • The ratings are revised each month based on the assumption that the payment processing industry changes over time. Services are evaluated based on the most recent trends and developments most important to customers. Often times the research team at topcreditcardprocessors.com spends time communicating with customers of competing services for a more thorough look.
  • The American economy turned in a better performance last quarter than first thought, expanding at a 2.1 percent rate, the government said on Tuesday.
  • Nearly all of the improvement was because of revised data on inventories, which showed businesses restocking shelves at a faster pace than the government first estimated. The improvement in inventory levels was offset by a slight downward revision in consumer spending last quarter.
  • Although well below the 3.9 percent pace of growth recorded in the spring, the economy’s advance was better than the initial 1.5 percent rate for the third quarter that the Commerce Department reported late last month.
  • Fixed-income revenue is unlikely to improve from a poor third quarter across Community banks’ revenue and income growth outpaced the rest of the industry nationwide, and loan portfolios at community banks grew at a faster rate than at larger institutions, according to the FDIC’s latest Quarterly Banking Profile released Tuesday.
  • The 5,812 insured institutions identified as community banks reported $5.2 billion in net income in the third quarter, an increase of 7.5 percent from third quarter 2014. Net operating revenue of $22.4 billion at community banks was $1.6 billion, or 7.5 percent higher than a year earlier, according to the report
  • Overall, commercial banks and savings institutions insured by the Federal Deposit Insurance Corp. reported aggregate net income of $40.4 billion in third quarter 2015, up $1.9 billion, or 5.1 percent compared with the previous year

Beware of deferred interest credit cards

Source: CNBC Category: Credit Card News
  • The holiday season is almost here, which means retailers are ready — not just with sparkly merchandise and doorbuster deals, but also with a certain kind of credit card offer.
  • These offers, promising no interest payments for months or even years, can be enticing, especially for shoppers making big ticket purchases for the holidays, and retailers are busily rolling them out.
  • "Deferred interest programs are a popular choice for consumers who need to purchase expensive items like refrigerators and dishwashers but don't have the money or savings," said Nessa Feddis of the American Bankers Association. "They allow them to make the purchase when they need to and spread the payments over time without having to pay any interest. The overwhelming majority repay within the deferred interest period and benefit from a free loan."
  • For anyone down on advertising, the Association of National Advertisers and The Advertising Coalition commissioned a study that highlights some of the industry's big economic benefits. Namely, advertising contributed $3.4 trillion to the U.S. GDP last year, a figure that accounts for 19 percent of the country's entire economic output.
  • The study, done in partnership with IHS Economics & Country Risk, was also designed to analyze the impact a recent tax proposal would have on the U.S. economy. The proposal would allow businesses to deduct 50 percent of their annual advertising spending.
  • "This new study underscores the essential nature of advertising in promoting both business and economic growth in this country. The very fact that this industry contributes nearly 20 percent to the nation's GDP sends a powerful reminder to policymakers that advertising is an essential stimulus to the U.S. economy that should be promoted and not subjected to tax," Bob Liodice, president and CEO of ANA, said in a press release.
  • A wave of regulation that targets Wall Street paychecks will drive more bankers to leave the industry, Promontory Consulting Group founder and CEO said.
  • The regulations could include so-called deferred-compensation requirements that would delay a full bonus payout for as much as 10 years, Ludwig expects. Regulators could announce these rules before the end of the year.
  • "We're in for five to 10 years of increasing rules," he told attendees of The Clearing House's annual conference in midtown Manhattan. "It can have a profound impact on the industry."
  • The employee perched on a stepstool by the checkout at Trader Joe’s in Union Square in Manhattan is like an air traffic controller: Register 6 for one customer. Register 9 for the next.
  • The routine helps move traffic quickly through the store, where the lines can often snake around the aisles of whole grain cereal, mixed nuts and Fair Trade coffee. Trader Joe’s, like many retailers around the country, recently upgraded its payment terminals around the Oct. 1 deadline to accept debit and credit cards with a new security chip.
  • The timing, retailers say, could not be worse. The new terminals are often slower, meaning that the long lines during the busy year-end holiday season will grow longer.
  • U.S. News & World Report, a nationally recognized publisher of consumer advice and information, has released a Best Credit Cards web portal to help the estimated 167 million American adults who have a credit card make smarter decisions about which ones to include in their wallet.
  • The new service lists options by category, issuer and credit score to make it easier for consumers to find cards that work for them. The Best Credit Cards service represents a step forward in bringing clarity and transparency to an area where historically consumers have lacked objective advice.
  • The Best Credit Cards rankings incorporate real-time data to ensure the latest information is available for each card. Top ranked credit cards have included the United MileagePlus® Club card in the Best Airline Credit Cards list and The Ritz-Carlton Rewards® Credit Card in the Best Hotel Credit Cards rankings.
  • Late last week, a consortium of financial regulators in the United States, including the Federal Reserve and the FDIC, issued an astonishing condemnation of the US banking system.
  • Most notably, they highlighted “continuing gaps between industry practices and the expectations for safe and sound banking.”.
  • This is part of an annual report they publish called the Shared National Credit (SNC) Review. And in this year’s report, they identified a huge jump in risky loans due to overexposure to weakening oil and gas industries.
  • Hiring at American companies shifted into higher gear in October, helping to lift wages and clearing the path for the Federal Reserve to raise interest rates next month.
  • The 271,000 jump in payrolls reported by the Labor Department on Friday was much more robust than expected and suggested that economic growth had enough momentum to allow the central bank to begin its move away from the ultralow, crisis-level interest-rate policy it has been following for seven years.
  • Along with altering the landscape for policy makers in Washington and traders on Wall Street, the strength in the labor market, if it persists, is expected to shift the political debate as the 2016 presidential campaign heats up.
  • Interest rates on new credit card offers held firm Wednesday, according to the CreditCards.com Weekly Credit Card Rate Report.
  • Once again, none of the issuers monitored by CreditCards.com advertised new interest rates. As a result, the national average annual percentage rate (APR) remained at 15.01 percent for the fourth consecutive week.
  • Most issuers also left promotional terms, including introductory APRs and balance transfer offers, unchanged as well. Pentagon Federal Credit Union introduced a new balance transfer offer to the PenFed Platinum Cash Rewards Visa card. Cardholders who transfer a balance are now charged an introductory APR of 2.99 percent. Previously, cardholders were offered a 0 percent rate on balance transfers.

Weekly Rate Report
  Avg. APR Last week 6 months ago
National average 15.01% 15.01% 14.92%
Low interest 11.62% 11.62% 11.62%
Balance transfer 14.12% 14.12% 14.04%
Business 12.85% 12.85% 12.85%
Student 13.14% 13.14% 13.14%
Cash back 15.27% 15.27% 15.28%
Airline 15.14% 15.14% 15.10%
Reward 15.15% 15.15% 15.04%
Instant approval 18.00% 18.00% 17.93%
Bad credit 22.73% 22.73% 22.73%

  • It’s Monday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down.
  • Don’t worry about catching every headline and every report throughout the week—I recap all of the most important news impacting your wealth right here every Monday.
  • Let’s take a look at the week’s big headlines: U.S. Economy Grew 1.5% Last Quarter: For the third quarter, U.S. GDP growth is estimated to have slowed down, increasing at a 1.5% annual pace. This is down dramatically from the 3.9% annual pace in the second quarter. U.S. consumer spending grew at a 3.2% annual pace, while business spending decelerated sharply as inventories plunged to only $56.8 billion. A widening trade deficit was also a drag on overall GDP growth in the third quarter.
  • We are a group of humble savers in traditional bank savings and money market accounts who are frustrated because, like millions of other Americans over the past six years, we are getting near zero interest. We want to know why the Federal Reserve, funded and heavily run by the banks, is keeping interest rates so low that we receive virtually no income for our hard-earned savings while the Fed lets the big banks borrow money for virtually no interest.
  • We follow the reporting on your tediously over-dramatic indecision as to when interest rates will be raised – and no one thinks that when you do, it will be any more than one quarter of one percent. We hear the Federal Reserve’s Board of Governors and the various regional board presidents regularly present their views of the proper inflation and unemployment rate, and on stock market expectations that influence their calculations for keeping interest rates near-zero.
  • But we never hear any mention of us – the savers of trillions of dollars who have been forced to make do with having the banks and mutual funds essentially provide a lock-box for our money while they use it to make a profit for their firms and, in the case of the giant banks and large mutual funds, pay their executives exorbitant salaries.