This Week In Credit Card News: Record High Credit Card Debt; Millennials Don't Know How Cards Work

credit cards has hit a new high at just over $1 trillion, topping the previous mark set in April of 2008 just before the Great Recession. Not everyone carries credit card debt from month to month. But for those who do, the average figure per household is now $9,600. That equals about 17% of the average U.S. household income. And since the average interest rate on a credit card is 16%, and about 24% for those with subpar credit, that debt grows between $1,600 and $2,300 each year. [CBS News]

Credit card debt is at record highs in America. Photo credit: Shutterstock

Millennials Don’t Know How Credit Cards Work

A new survey found that "millennials’ knowledge of credit cards is lacking" and "very concerning." A few millennials (6%) actually believe that missing a card payment would "improve" their credit rating. 17% said missing a card payment would have no effect on their score. Some 36% have maxed out cards. Some 48% carry card balances on which they pay hefty interest charges from month to month. That doesn’t seem to make a difference to 45% of those questioned. They didn’t even know their credit card interest rate. [The New York Post]

BofA’s New Premium Rewards Card Comes With a Twist

Bank of America is preparing to join the premium rewards card fray, planning a new twist on hot products like the Sapphire Reserve card from JP Morgan Chase. Over the past year, rewards cards have become much sought-after among millennials and big spenders. The cards’ popularity has prompted new entrants and ever-higher rewards, and caused some concern among issuers, who fear an overheated market. Bank of America is the last of the four largest U.S. credit card issuers to enter the premium rewards card market. The Bank of America Premium Rewards credit card will have a $95 annual fee. It will distribute two points to cardholders for every dollar they spend on travel and dining and 1.5 points per dollar spent on everything else. But Bank of America cardholders who have at least $20,000 at the bank in checking, savings or investment accounts will earn more. [The Wall Street Journal]

New Texas Law Allows Merchants to Decline Card Purchases Without ID

A law that takes effect in January will allow Texas merchants to ask for photo identification for credit and debit card purchases, and turn down transactions if a buyer won’t show it. The aim of the law is to reduce debit and credit card fraud. Though merchants will sometimes pick up the tab for money lost to fraud, it often falls to banks to absorb the losses and replace compromised cards. Merchants can ask to see photo ID, but contracts they have with credit card companies often bar them from declining a transaction if a customer refuses to show it. [The Texas Tribune]

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America’s Credit Card Holders are $1 Trillion in Debt

The amount Americans owe on their credit cards has hit a new high at just over $1 trillion, topping the previous mark set in April of 2008 just before the Great Recession. Not everyone carries credit card debt from month to month. But for those who do, the average figure per household is now $9,600. That equals about 17% of the average U.S. household income. And since the average interest rate on a credit card is 16%, and about 24% for those with subpar credit, that debt grows between $1,600 and $2,300 each year. [CBS News]

Credit card debt is at record highs in America. Photo credit: Shutterstock

Millennials Don’t Know How Credit Cards Work

A new survey found that “millennials’ knowledge of credit cards is lacking” and “very concerning.” A few millennials (6%) actually believe that missing a card payment would “improve” their credit rating. 17% said missing a card payment would have no effect on their score. Some 36% have maxed out cards. Some 48% carry card balances on which they pay hefty interest charges from month to month. That doesn’t seem to make a difference to 45% of those questioned. They didn’t even know their credit card interest rate. [The New York Post]

BofA’s New Premium Rewards Card Comes With a Twist

Bank of America is preparing to join the premium rewards card fray, planning a new twist on hot products like the Sapphire Reserve card from JP Morgan Chase. Over the past year, rewards cards have become much sought-after among millennials and big spenders. The cards’ popularity has prompted new entrants and ever-higher rewards, and caused some concern among issuers, who fear an overheated market. Bank of America is the last of the four largest U.S. credit card issuers to enter the premium rewards card market. The Bank of America Premium Rewards credit card will have a $95 annual fee. It will distribute two points to cardholders for every dollar they spend on travel and dining and 1.5 points per dollar spent on everything else. But Bank of America cardholders who have at least $20,000 at the bank in checking, savings or investment accounts will earn more. [The Wall Street Journal]

New Texas Law Allows Merchants to Decline Card Purchases Without ID

A law that takes effect in January will allow Texas merchants to ask for photo identification for credit and debit card purchases, and turn down transactions if a buyer won’t show it. The aim of the law is to reduce debit and credit card fraud. Though merchants will sometimes pick up the tab for money lost to fraud, it often falls to banks to absorb the losses and replace compromised cards. Merchants can ask to see photo ID, but contracts they have with credit card companies often bar them from declining a transaction if a customer refuses to show it. [The Texas Tribune]

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