More difficult to find or be approved for co-branded credit cards…

Private label credit cards are becoming a thing of the past with more and more retailers signing on to offer co-branded credit cards that are managed by a third party. Although covering only a small corner of the market, these cards tend to be held by riskier borrowers with less robust credit histories and fewer credit options. Private label and co-branded credit card debt in the U.S. is well over $100 billion, according to a Nilson report. Losses on these cards are rising faster than the general credit market, reaching a three-year high of more than 10% compared to general purpose card losses of 7.5%. And while some retailers continue to offer these cards at their registers in exchange for a same-day discount, lenders have made it even more difficult to qualify, similar to what’s happening in the traditional credit card market.   (More…)

Even more proposed restrictions on credit card issuers…

Ignoring threats by the banking industry that further legislation will stymie consumer credit, Senate Democrats moved to limit credit card interest rates with new restrictions that are broader than those adopted by the Federal Reserve in December. In addition to prohibiting interest charges on late payments or for exceeding credit limits, the Credit Card Accountability, Responsibility and Disclosure Act of 2009 would require card issuers to disclose how long it will take to pay off a balance if only the minimum monthly payment is made and that statements be mailed at least 21 days before the payment due date. The Senate legislation includes protections specifically for consumers under 21 years of age and now moves to the full Senate to be implemented within nine months of enactment. (More…)

Credit card protection programs are filled with loopholes…

If you’re thinking about signing up for a credit card protection plan, perhaps you should think again. Offered by credit card companies for a monthly fee, a credit card protection plan is offered as an alternative for people who might not be eligible for life or disability insurance. The idea behind the plans is to provide payment coverage if you lose your job, become disabled or die. The sales pitch for this service includes scare tactics about the damage that could occur if anything happens and you can’t pay your debt. But in many cases, the only protection being offered is to the card issuers, who line their pockets with your money. You may be better off using the cost to pay down your debt or save it for an emergency. (More…)

Numerous opportunites available to Mastercard customers…

MasterCard Worldwide is working to help consumers secure smarter methods of paying for their needs by providing innovative processing and consulting services. Whether you’re managing your personal finances or running a small business, MasterCard gives you flexibility and control over the way you manage and pay your bills. They’re also providing ways to encourage responsible management of their customer’s credit accounts. (More…)

Some new programs designed to help students with debt…

Student loan company Sallie Mae recently released a study that shows the prevalence of credit card debt on college campuses and reported record debt levels for students. A whopping 14% increase has been seen in the number of undergraduates who have a credit card - 84% in 2009; 76% in 2004; 67% in 1998, with half having four or more cards. The average credit card debt carried in 2008 was $3,173, the highest since the study began in 1998. (More…)

Charge-offs are on the rise and could slow the financial recovery…

Financial experts predict that even with recent indications that the U.S. economy may be turning around, people should brace for a bit more bad news. Fitch Ratings predicted that credit card charge-offs would increase significantly during the second quarter of 2009. And according to Standard & Poors, that’s just what is happening. U.S. credit card defaults have deteriorated to the worst level since the agency began tracking the figures in 1992. (More…)

Consumer debt continues to drop as spending declines…

A bit of good news to report in the drop in consumer debt in March. Falling by $11.1 billion to a total of $2.55 trillion, this is the second straight month of decreased debt accumulation for consumers and three times more than had been forecast. Outstanding revolving debt, such as credit cards, fell $5.4 billion or at a 6.8% annual rate in March, a slower pace than the 12.1% drop in February. It is the sixth decline in the past eight months, after years of steady climbing debt of nearly 7% per year. According to the Federal Reserve, if this pace continues the annual rate would be an impressive drop of 5.2%, the quickest decline since 1990. (More…)

New Senate bill may lift constraints imposed on merchants…

Consumers may see retailers offering discounts for purchases made with cash or check. Proposed changes included in the sweeping bill that is awaiting Senate approval would lift constraints imposed on merchants’ ability to offer discounts for paying with cash by Visa, MasterCard and other credit card networks. Many retailers will be happy for the opportunity to offer transparency to their customers about the fees that are paid to credit card companies - fees amounting to tens of billions of dollars each year. (More…)

The merger of Delta and Northwest has caused some changes…

Changes are coming for all Northwest WorldPerks Visa cardholders. With the merger of Delta and Northwest, both frequent flyer programs will be integreated into the SkyMiles airline loyalty program, now exclusively provided by American Express (previously managed by U.S. Bank). For Northwest WorldPerks cardholders, American Express says they will be allowed to keep the miles they’ve earned; however, to earn additional miles they will need to apply for a Delta SkyMiles credit card. (More…)

Credit bureas will be adopting a new scoring system this year…

Fair Isaac Corporation, developer of the formula that determines your FICO score, is presenting a new model with TransUnion, one of the three major credit agencies, dubbed FICO 08. The new formula comes almost a decade since Fair Isaac changed the formula and at a time when more lenders have criticized FICO’s ability to predict defaults as they continue to deal with falling housing prices and the subprime mortgage crisis. Equifax is expected to follow in the second quarter, while Experian is not commenting due to pending litigation. (More…)