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Paying down credit-card debt appears to be on the upswing.
Consumers cut their outstanding revolving debt -– overwhelmingly credit cards -– by an annualized, seasonally adjusted rate of 10.5 percent in May, the Federal Reserve reported Thursday. That’s on the heels of an 11.8 percent drop in April. Revolving credit is a line of credit allowing consumers to pay all or part of an outstanding balance, and, as the balance is paid, it becomes available to spend again as credit. Get the full story »
From Bloomberg News | The U.S. government no longer has a stake in Riverwoods-based Discover Financial Services after the company bought back a warrant issued to the U.S. Treasury Department’s bank-bailout program for $172 million. The 10-year warrant conveyed the right to buy 20.5 million common shares and helped it gain access to $1.2 billion in federal rescue funds.
From CNN | Americans are not as far behind on their bills as a year ago. The number of consumers behind on their credit card payments fell to an eight-year low in the first quarter of 2010, the American Bankers Association said Wednesday. Overall, delinquencies across a wide-range of consumer debt categories have also fallen. Get the full story »
As legislators on Capitol Hill trumpet a final agreement on sweeping financial reform, consumers might be wondering, “What’s in it for me?”
They will benefit in a big-picture way from many of the provisions in the bill, likely to be passed by Congress next week. It is meant to provide a more stable financial system, prevent government bailouts of banks and protect investors. Get the full story »
A new credit card rule that limits late fees will reduce annual earnings of Discover Financial Services by $80 million to $90 million a year, Chief Executive David Nelms said Thursday.
Under new Federal Reserve rules that kick in on Aug. 22, credit card companies can’t charge a late fee of more than $25, or $35 if a consumer has been late on one of their last six payments.
On its flagship Discover More card, late fees are currently $19 on balances up to $250 and $39 on balances of more than $250. Get the full story »
FDIC Deputy Director Robert W. Mooney tells a conference of banking risk managers that U.S. consumers need federal protection from a financial services industry that has exposed them to inappropriate mortgages, credit cards and other practices.
Associated Press | The Federal Reserve adopted new rules Tuesday
aimed at protecting credit card customers from getting socked by lofty
late payment charges and other penalty fees.
The rules, which take effect Aug. 22, bar credit card companies from charging a penalty fee of more than
$25 for paying a bill late. They prohibit credit card companies from
charging penalty fees that are higher than the dollar amount associated
with the customer’s violation. They also ban so-called “inactivity”
fees when customers don’t use the account to make new purchases and
they prevent multiple penalty fees on a single late payment.
By The Problem Solver | Following a two-year investigation of a global credit card scam initiated in Spain, police in 14 countries have arrested 178 people who were suspected of cloning credit cards.
Get the full story: Global credit card scam leads to 178 arrests.
Dow Jones Newswires | Discover Financial Services was among the top gainers in a buoyant Standard & Poor’s 500 Thursday, outpacing the broader index as speculation swirled of a possible takeover, though there appeared to be little factual basis behind the reports.
The volume of trading in the credit-card company was higher than average as the stock rose 8% to $13.57 in recent action. Peers Visa Inc., MasterCard Inc. and Capital One Financial Corp. each rose around 5%, all on less than half of typical volume.
Dow Jones Newswires | Sam Zell’s Equity Group Investments LLC
offered to buy the remaining outstanding shares of Rewards Network Inc.
for $13.50 per share, a 36 percent premium to Tuesday’s closing price.
In a letter to the board, filed with the Securities and Exchange
Commission, Equity Group said it was prepared to “promptly negotiate”
the terms of the deal and would allow Rewards Network a 40-day “go
shop” period to search for better deals.
By Julie Wernau
| A bill that would prohibit employers from inquiring about or using a
person’s credit history as a basis for employment or discharge has
passed both legislative chambers in Springfield, and is awaiting the
governor’s signature.
The bill, House Bill 4658, introduced by Rep. Jack D. Franks
(D-Woodstock), creates the Employer Credit Privacy Act, and provides
exemptions for the banking and financial industry and state law
enforcement and investigation units. The bill passed the Senate on May 4, and the House of Representatives concurred on minor changes made to the
bill Thursday.
Associated Press | Consumers struggling to pay their bills in
the first few months of the year got an immediate benefit from credit
card reforms. Late credit card payments fell sharply in the first
quarter, and at least part of the drop can be attributed to the law
that kicked in Feb. 22 curbing interest rate hikes and various fees.
The rate of borrowers who fell 90 days or more behind on their cards
dropped to 1.11 percent for the first quarter, down from 1.32 percent
in the 2009 period, according to credit reporting agency TransUnion.
The delinquency rate was also down from the fourth-quarter of 2009,
when it stood at 1.21 percent.
Associated Press | Credit card company Visa Inc. fell $7.28 to $78.45, while Mastercard Inc. fell $17.10 to $215.21, in early trading Friday, after the Senate voted to curb fees on debit cards. The 64-33 vote inserted the fee requirement in a package
of new financial rules the Senate is considering to ward off a repeat of
the financial crisis.
Associated Press | Consumer borrowing posted an unexpected
increase in March, only the second gain in the last 14 months. It could
be a sign that households are feeling more confident about boosting
spending, a key development needed to support a sustained economic
recovery.
The Federal Reserve reported Friday that consumer borrowing rose by
$1.95 billion in March, better than the $3.85 billion drop that
economists had expected.
