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  • JP Morgan Chase Aims to Boost Consumer Financial Security

    JP Morgan Chase Aims to Boost Consumer Financial Security

    Over the summer CardRatings.com issued a disturbing report that revealed the sorry state of financial literacy among the general population. Despite all of the news about data breaches at Target and Home Depot, fewer than half of those surveyed knew the proper steps to take to monitor and protect their credit – basic steps to maintaining financial security. This lack of understanding, unfortunately, extends beyond just credit issues to the basics of savings and investing and other straightforward elements of financial fitness. Add in the stressed finances of many American families and the predatory practices of payday loan and check cashing outfits and it all adds up to a major problem.

    Yet it is one the financial services industry seems increasingly focused on addressing. As part of that effort, JPMorgan Chase & Company announced on Sept. 19 a two-year, $35 million effort to assist individuals and families to save money, build credit and generally improve their financial security. The money will be disbursed in the forms of grants to non-profit organizations that help consumers boost their financial knowledge and that also develop financial products and tools that meet the needs of typically under-served communities.

    Indeed, according to JPMorgan Chase, its grants will be targeted to three distinct areas. For one thing, it will be seeking out non-profits that can provide innovative, technology-heavy financial solutions to help meet consumer needs in an affordable way. Understanding that innovative solutions that nobody knows about aren’t useful, grants will also be given to support efforts to expand the availability of these novel solutions. And grantees that seek to disseminate financial best practices will also be considered.

    For instance, JPMorgan Chase contributed $150,000 to MoneyThink to help that group develop and app and curriculum to boost the financial literacy of 11th and 12th graders. “Chase’s support will help serve an additional 2,000 youth through near-peer mentorship and game-based mobile technologies,” said Ted Gonder, the CEO of MoneyThink.

    This latest announcement is a follow-up to JP Morgan Chase’s establishment earlier this year of the Financial Solutions Lab. A five-year, $30 million program in collaboration with the Center for Financial Services Innovation, the lab is centered on developing and distributing innovative products that improve financial security.

  • Apple Pay No Slam Dunk

    Apple Pay No Slam Dunk

    Apple is not big on subtlety. Its announcement party unveiling the new iPhone 6 and Apple Watch included a mini-concert by none other than U2, whose new album was also given away for free on iTunes, as part of the big rollout. The company’s introduction of Apple Pay, the new digital wallet that will be available to millions of iPhone users, while not quite as flashy, was also significant.

    Apple Pay, which will use near field communication (NFC) to allow shoppers to utilize tap and pay technology to purchase items with their phones, was introduced with the news that American Express, Visa and MasterCard had all signed on in support, along with retailers representing 220,000 American stores. “Working with Apple, we’re excited to bring Apple Pay to tens of millions of Capital One customers,” said Frank LaPrade, the Capital One Chief Enterprise Services Officer, in the sort of enthusiastic vote of support that accompanied Apple Pay’s debut. “We are laser focused on the evolution of digital products and services.”

    Even though Apple Pay received a big embrace from banks, credit card companies and many retailers, it faces plenty of hurdles before it becomes a mainstream payment option. For one thing, consumers who have been barraged with news about data breaches and thefts could very well be leery of a new payment choice – even if, as Apple points out, it is more secure than debit or credit cards. Retail consultant, Cathy Hotka, was quoted in a recent Forbes story asserting that adoption of Apple Pay would be slow, largely due to uncertainty around security. “A lot of consumers will have to be convinced that their data will remain protected,” she said. “With the choice between shaving off a few seconds and having a safer transaction, consumers will choose safety.”

    Another issue is how quickly consumers will upgrade to Apple devices that are equipped with the NFC technology that allows Apple Pay to function. Larry Negrich, a vice president of marketing at nGage Labs was quoted in the Forbes article saying that he expects it to take four years for all iPhone users to have the technology required to utilize Apple Pay. Even when that happens, Negrich notes that will still only account for 50 percent of all consumers. “I think Apple has created a better total solution to the security issue. However what about the other 50 percent of consumer mobile transactions?” he said. “Retailers will surely be faced with supporting Apple Pay and multiple other mobile payment solutions all seamlessly-integrated into their years-old POS (Point of sale) software.”

    Ultimately, though, even many of the skeptics about Apple Pay’s immediate adoption think it has great long-term potential. Tom Redd of SAP Global told Forbes that it’s easy to see why Apple will succeed. “Hey, the Millennials live by Apple, and if Apple says, ‘Do it,’ consider it done.”

     

     

     

     

  • Credit Card Breach Doesn’t Compel Action

    Credit Card Breach Doesn’t Compel Action

    The past year has seen an unprecedented level of attention devoted to the many problems that result from data theft. Countless news articles and opinion pieces have followed in the wake of the high profile theft of customer information at big name retailers such as Target, Neiman Marcus and, more recently, Home Depot. So what is the response to a credit card breach on the individual level? Much of the time it is simply this: just hope for the best.

    That’s one of the main findings from a recent CardRatings.com survey of 2,000 Americans aged 25 and older. Among the Americans who were surveyed, only 25 percent believed they had fallen prey to a data breach. Of those who reported being a victim of data theft, the response was hardly uniform and often not the proper steps to take in order to protect their credit and finances. Here are the actions people took:

    • 51 percent checked their credit card statement
    • 45 percent checked their credit report
    • 54 percent checked their bank account
    • 38 percent stopped using their credit card
    • 33 percent stopped using their debit card
    • 24 percent signed up for credit monitoring
    • 24 percent put a credit freeze in place

    Actually reviewing one’s credit report – an essential step after a data breach – not only occurred less than half the time among survey respondents, younger and older people were least likely to do it. Only one-third of those between the ages of 25 and 34 and just 40 percent of those 65 and older checked their credit report.

    The survey also revealed widespread ignorance of card security basics. Just over half of respondents could correctly identify that a credit card is safer to use than a debit card. Furthermore, only 20 percent of those asked could say with certainty whether or not an EMV chip, a technology that boosts card protection significantly, currently protected their payment card. Although not asked in the survey, it’s unlikely many respondents would have been able to note that prepaid debit cards offer more protection than credit or debit cards in the event of a data breach – identity thieves can only steal the amount of money that has been loaded onto the card.

    “Given how widespread data breaches have become, every consumer in America is likely to be affected at some point. We simply can’t afford to stick our necks in the sand and hope the problem will go away,” says Curtis Arnold, editor-in-chief of CardRatings.com and founder of this site. “The bottom line is that we all need to get more involved and educated.”

     

     

     

     

     

     

     

     

  • Survey: Americans Need To Get More Financially Fit

    Survey: Americans Need To Get More Financially Fit

    It can often seem like there are a bewildering number of things to do in order to stay financially fit. Don’t borrow too much money. Create a budget and stick to it. Save for retirement. Squirrel away money for your children’s education.

    Now add this to the list of to do’s required in order to be financially fit: Be clear on what your credit status is. It may seem like something that can be easily relegated to the bottom of your pressing financial concerns, but that notion is misleading. Having good credit, after all, is a prerequisite for qualifying for a mortgage or a car loan or even a credit card. Furthermore, lenders look at your credit – usually your credit score – to determine how risky it is for them to hand money over to you. If you’re deemed a big risk, you either won’t qualify at all or you’ll have to pay a sky-high interest rate.

    Sadly, a new survey conducted by the financial services company Capital One found that when it comes to credit, Americans are not nearly as financially fit as they need to be. Indeed, the survey discovered that a great deal of education needs to take place for many of us to improve our financial IQ, at least as it relates to credit. Among Capital One’s findings were:

    • About one-third of Americans surveyed believe that a credit score only matters when they need to buy a house. This misconception is particularly pervasive among young Americans. Almost half of those under 35 who were polled believed this to be true.
    • The survey also pointed towards widespread confusion about the factors that go into determining a credit score. For example, over a quarter of respondents mistakenly believe that having one late payment on a bill will not damage their credit. Another 24 percent of those polled wrongly believe that age is a factor in a credit score, while 19 percent asserted that where they live is considered.
    • Although it’s free and a very smart thing to do only 30 percent of respondents had requested a copy of their credit report in that past year. Doing so allows consumers to check for and correct any errors that may be harming their credit. By contrast, 66 percent of respondents had their car’s oil changed and over half had been to the dentist.
    • Despite all of this, the survey also found that 81 percent of parents believed that their kids would have better credit than they do by the time they reach their age.
  • Smart Moves for Students: How to Build Credit as a College Student

    Smart Moves for Students: How to Build Credit as a College Student

    If you step back and think about it for a moment, college seems like a downright lousy time to start building good credit. For all too many students, the college years are a time to amass a mountain of student debt while not working. Building the solid credit history that allows you to get home and car loans at reasonable interest rates is something to put off until after graduation, right? Not necessarily. In fact, in the not too distant past, credit card companies tried to entice every student within a Frisbee’s throw of a college green to signup for entry-level cards by offering perks like free airline flights. While that practice was a way for lots of undergrads to demonstrate they were ready for the adult responsibility of repaying their debts – and hence establishing good credit – it also resulted in too many young people drowning in credit card debt. It was an unpopular enough marketing tactic that the Credit CARD Act of 2010 largely eliminated those campus credit card promotions. But the fact remains that it is better to get started building your credit sooner rather than later. And there are still ways to begin constructing the sort of stellar credit that lenders want to see while still in college. If you are asking the question about how to build credit as a college student, here are a few tried and true methods:

    • Obtain a secured card: Unlike standard credit cards, secured cards are easy to get because they require applicants to deposit money into their account before they spend a penny. That deposit amount becomes the card holder’s credit line, which makes it a risk-free proposition for the company offering the card – if you don’t pay your bill, they keep your deposit. But if you are smart and pay off all of your charges on-time it can be a great tool for burnishing your credit.
    • Open a gas or department store account: Like secured cards, department store or gas cards are a snap to get compared to traditional credit cards. And if you use it wisely – meaning you always pay your bills before they’re due – you’ll be sending a message that you reliably pay off your debts.
    • Get a credit card: True, the days of having multiple credit card offers stuffed in your campus mailbox are over. But if you have a part-time job and an existing relationship with a bank through a checking account and debit card, you just might be able to land a credit card. If you can swing it, do it. And this will sound like a broken record, but be sure to always pay your bill on-time and don’t get anywhere near your credit limit. Small, smart purchases that you pay off on a monthly basis will make a very good impression.
    • Hit up your parents: If you’re in college, your parents have clearly already done a lot for you. But if you think they’d be open to one more request, try to get them to add you as an authorized user of their credit card account. You won’t have complete control over the card, obviously, but it is a tool for building credit. If, that is, you use it wisely.

     

  • Insights Aplenty in Federal Reserve Payments Study

    Insights Aplenty in Federal Reserve Payments Study

    When most people think of the Federal Reserve – if they consider it at all – it’s when the Fed raises or lowers interest rates. But monetary policy is only one of the tasks the Fed engages in. It also conducts in-depth research in an effort to uncover trends and insights that can benefit consumers, industry and the economy as a whole.

    Recently, the Fed released the 2013 Federal Reserve Payments Study Detailed Report, which examines the use of credit, debit, prepaid debit cards and other forms of alternative payment. Although the information in the report was collected in 2012, it still provides an interesting glimpse into consumer and business use of various forms of plastic, checks and mobile devices.  Among the Federal Reserve Payment Study’s many findings are:

    • For purchases, Americans favor debit cards. On average, Americans made 23 monthly payments using a debit card, with credit cards utilized 11 times and prepaid cards close behind at 10 per month.
    • In total, Americans have 776 million general-purpose cards. Of that number, 334 million are credit cards, 283 million are debit cards and 159 million are prepaid cards.
    • At 305 million versus 28 million, consumers hold far more credit cards than do businesses.
    • ATMs were far more popular for getting cash than over the counter withdrawals. In total, there were 5.8 billion ATM withdrawals, compared to 2.1 billion over the counter.
    • Prepaid cards for public transport and other transportation payments exceeded all other prepaid card payments. In total, there were 9.9 billion payments using prepaid cards for auto tolls and public transport.
    • There were over 250 million mobile payments made utilizing mobile wallet applications.
    • PIN debit and ATM transactions had lower fraud rates than transactions using signature debit or credit cards.
Prepaid Debit Card Reviews, Complaints, Etc