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2014 Credit Card Debt Study

Card Hub 2014 Credit Card Debt StudyConsumer credit card debt statistics – an indicator of spending trends and household financial health – support the notion of a rapidly improving economy, which is further evidenced by the fact that an impressive 321,000 jobs were added in November while the unemployment rate hovers at 5.8%. The credit card charge-off rate, at 2.89%, is at the lowest point since 1985, you see, which indicates that consumers have the financial wherewithal to remain current on their obligations. That’s the good news.

The bad news is that while economic gains are making consumer spending habits sustainable for now, our attitudes toward debt have not improved since the Great Recession. Our credit card performance has deteriorated on a year-over-year basis for four straight quarters, punctuated by a $15.94 billion increase during Q3 2014. This represents a 35% increase over Q3 2013 and a 25% rise relative to Q3 2012. Furthermore, we now project that U.S. consumers will incur a total of more than $60 billion in new credit card debt by the end of 2014, which would be an increase of at least 55% over 2013.

CardHub’s Credit Predictions for 2015

CardHub Predictions 15B

A crystal ball is a valuable thing. After all, if any of us truly had one, we could make a killing in the stock market. But while 20-20 vision is ultimately reserved for hindsight and no one can actually predict the future, we can indeed make some educated guesses as to what the coming months will hold for our wallets.

Doing so is especially important as we prepare to celebrate the holidays, ring in the New Year, and turn the page on 2014 because it will enable us to chart a path toward financial success in 2015 and away from missteps and money loss. With that in mind, CardHub’s editors have consulted a number of prominent financial experts in making predictions for what 2015 has in store for the credit markets, from debt levels to interest rates.

2014’s Most Popular Gift Cards & 8 Gift Card Tips

8 Things To Know About Gift Cards

There are a few things we can count on every year during the holidays: time off from school; an overweight, bearded out-of-towner breaking into homes via chimney; tone-deaf neighbors singing at your doorstep; embarrassing antics at office holiday parties; eating a bit too much; and, of course, gift cards.

Gift cards are the most sought after type of present for the eighth straight holiday season, according to the National Retail Federation, with 62% of consumers hoping to receive one this year. But not all gift cards are created equal, and it’s important to understand which ones are the most popular as well as what industry trends you can take advantage of in order to both please the people on your gift giving list and save some money during this expensive time of the year. After all, holiday shoppers are expected to shell out an average of $804.42, with the average gift card buyer projected to spend $172.74 on plastic alone. We could all stand to lower those tabs.

Why We Are Going to Court for CardHub Users

Card Hub Fight

People often ask me what separates CardHub from the various other credit card comparison websites that exist in the marketplace.  One of the reasons, I say, has to be CardHub’s commitment to the consumer.  It truly is our mission to provide consumers with all of the tools and information they need to make the best possible decisions for their wallets.

Sure, you might be thinking, but any CEO would say that! While that might be true, CardHub really does go to the mat for the folks who use our website.  In fact, allow me to share a story that illustrates just how far we’ll go for you.

The Pros & Cons of the CFPB’s New Rules for Prepaid Cards

CFBP

Summary: The CFPB’s new rules for prepaid cards are altogether beneficial to consumers – improving transparency and bolstering rights – and there is nothing in them that will have unintended consequences for the public. However, the organization did miss a couple of important opportunities to truly make a major impact on the behalf of users. For example, the regulator did not take steps to limit the number of fees a prepaid card can charge, nor did it address the issue of inconsistent FDIC insurance for prepaid card funds.

The Consumer Financial Protection Bureau on Nov. 13 announced a sweeping new set of rules for the prepaid card market, setting this increasingly popular form of payment up for some big changes once a mandatory 90-day public comment period concludes. These proposed rules – which we’ll examine in detail below – have been a long time coming, as the CFPB first announced an advance notice of rulemaking two years ago in response to the rising rate of usage among consumers.

Credit Card Extended Warranty Study: What Type of Credit Card is Best?

Extended WarrantyUnbeknownst to many consumers, credit cards provide a number of ancillary benefits, including rental car insurance and extended product warranties. These benefits generally do not come from credit card issuers, but rather from the card networks that each card is linked to. In this study, we will explore the extended warranty programs offered by the four major card networks: Visa, MasterCard, Discover, and American Express.

Thirty-one percent of consumers purchase extended warranties each year, according to a study from the University of Maryland’s Robert H. Smith School of Business, at a cost of $1.6 billion. And while these warranties generally account for 3-4% of a company’s revenue, according to Business Week, they often represent as much as 50% of its profit, thanks to margins between 50% and 60% . As a result, extended warranties are generally regarded as being among the biggest money wasters for consumers and the ability to garner necessary coverage at no cost through one’s credit card can provide a valuable source of savings.

All You Need to Know About Apple Pay

Apple Pay
The latest innovation out of Cupertino, California is here: Apple Pay. Apple Pay is the technology giant’s entrant into the emerging world of virtual wallets and is now available on the iPhone 6, iPhone 6 Plus, iPad Air 2, iPad mini 3 as well as the forthcoming Apple Watch. With it, users can enter their credit card information into their devices or iTunes accounts and then use the devices to securely make purchases either online or at the point of sale.

As things currently stand, Apple Pay is accepted at 220,000 brick-and-mortar stores across the United States, including locations of mega-retailers like Whole Foods, Macy’s, McDonald’s, Chevron and Subway. All in all, it can be used with 35 retail brands in person and 23 store brands online. Apple Pay can also be used to make purchases through 18 apps, including Uber, Lyft, OpenTable and Airbnb.

Prepaid Cards Create Confusion in the Checkout Lane

Prepaid Card Gift Card Confusion

The rise of prepaid cards has been well-documented.  The fastest growing form of electronic payment from 2006 to 2009, according to the Federal Reserve, prepaid cards truly burst into the mainstream after the Durbin Amendment to the Wall Street Reform and Consumer Protection Act decreased debit card interchange fees and thereby reduced the profitability of traditional checking accounts.  And while prepaid cards have proven apt to serve a number of important functions – from financial literacy teaching tool to replacement checking account – the combination of their newfound popularity and the manner in which they’re marketed has also created a great deal of confusion.

Not only are prepaid cards often erroneously referred to as “prepaid credit cards,” giving consumers the mistaken belief that they provide a line of credit or credit building capabilities, but they’re also increasingly being stocked right next to gift cards in grocery and convenience stores. While they may look similar, prepaid cards are not gift cards, nor should they be viewed as last-minute pick-ups to be grabbed as you make your way to the register with your groceries.  Here’s why.

2014 Credit Card Application Study

CardHub 2014 Credit Card Application Study Picking a credit card can be a difficult task. Not only are there more than 1,000 different offers on the market, but the inconsistent manner in which their terms are advertised can also make direct product comparison seemingly impossible. As a result, even if you know what your credit standing is and therefore what category of card you may qualify for, identifying the best offer for your particular needs and spending habits can feel like searching for a needle in a haystack. That is why CardHub – in an effort to aid consumers, praise straightforward issuers, and draw attention to those that obfuscate card terms – conducts an annual Credit Card Application Study. In this, the fifth iteration of the Study, we strived to evaluate the clarity with which the 10 largest credit card issuers disclose information about their products on their websites. More specifically, we sought to answer the following questions:

1) Rewards Clarity – Can a consumer easily determine how rewards are earned as well as what they are worth, without being forced to read any fine print?

Ask The Experts: Can Employers Screen Job Applicants Based on Criminal Records?

Criminal Records And Employment

An employer’s use of a job applicant’s criminal history in making employment decisions may, in some instances, violate the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964.

The U.S. Equal Employment Opportunity Commission (EEOC) has issued new guidance, urging employers to review their hiring policies to make sure they are not engaging in racial discrimination when they screen applicants based on any previous criminal history.

Ask The Experts: What Should We Do with the Charitable Giving Tax Deduction?

Experts Discuss Changes To Charitable Giving Tax Deduction

Just picture all of the starving children and imprisoned puppies.  That’s exactly what opponents of proposed changes to the 96-year-old charitable giving tax exemption want public opinion to center on.  But those who do support some sort of fundamental change will counter with images of a bedraggled, homeless Uncle Sam begging for food money on a street corner somewhere.  The question is, who’s right?

It’s hard to decipher right from wrong when you’re ostensibly choosing between the lifeblood of philanthropy and the federal government’s long-term financial security, especially since both sides will quote their fair share of supporting research.  Further complicating matters is the notion that this needn’t really be a disparate, cause-and-effect type of decision.  In other words, changing the way people approach charitable giving with tax implications in mind isn’t the only way to skin the budget cat.

Ask The Experts: Tips for Turning Summer Break Into A Brighter Future

Best Summer Jobs Internships For Young People

Whether you’re prone to believing that kids should just be kids for as long as possible or that they should get off their spoiled butts and start pulling their own weight, the financial tumult we’ve endured in recent years has made clear how important it is to start sowing the seeds of a successful financial future early.

We saw a 23-year-high unemployment rate in October 2009 (10.0%), at which time 15.7 million people were out of work in the United States.  We saw more than 1 out of 10 credit card users fall so far behind on their bills during the first half of 2010, that banks legally had to write their debt off the books (the consumers still owed it, however).  And we’ve also seen U.S. consumers rack up more than $73 billion in new credit card debt in the last two years alone.

Prepaid Cards Report – 2014

CardHub 2014 Prepaid Card ReportIncreasingly consumers are turning away from traditional checking accounts towards alternative cash management tools including prepaid cards. According to the Nilson Report, “the top 50 largest US Banks and credit union issuers of general purpose prepaid cards accounted for $118.09 billion in spending at merchants in 2013, up 6.1% from 2012”. And according to Mercator Advisory Group Inc., the amount of money loaded on general purpose reloadable prepaid debit cards almost tripled from 2008 to 2012, rising to $76.7 billion. Mercator predicts that number will rise to $168.4 billion by 2015.

Prepaid cards can be a great tool for a lot of people as they are safer than cash and offer no overdraft fees, no bounced checks and guaranteed approval. However, the cost of prepaid cards varies greatly, depending on a customer’s usage and unfortunately, according to a 2014 Pew study, only 32% of consumers compared the terms and fees before choosing a card, while most simply selected a card while in a store. In light of prepaid cards ever-growing role in the personal finance landscape, at CardHub.com we conducted our annual report evaluating the monthly cost of 26 popular prepaid cards based on their fees and features.

2014 Credit Card Landscape Report

Card Hub Study 2014 Credit Card Landscape  
CardHub’s quarterly credit card landscape reports take the pulse of interest rates, rewards and fees across the credit card market. This analysis unearths market trends of great significance to consumer sentiment, banking industry operations, and our overall economic stability and can be leveraged by consumers and industry professionals alike.

 
 

2014 Credit Card Travel Insurance Report

CardHub 2014 Credit Card Travel Benefits Study Leisure travel represents a significant investment for consumers in terms of both time and money, so it’s no surprise that folks are interested in protecting their precious resources. But given that travel insurance packages typically cost 4% to 8% of the price of a trip, most of us seem content rolling the dice.

While illness and natural disasters interfere with the travel plans of 1 in 6 Americans, according to the U.S. Travel Insurance Association, only 22% of those affected have travel insurance. Whether you believe this reflects a lack of financial literacy, the idea that travel insurance is a scam or some sort of post-recession frugality, it’s clear that we’re not sufficiently shielded from the distinct possibility of wasted time and money when we put our hard-won vacation days to good use.

2014 Credit Card Auto Rental Insurance Report

CardHub 2014 Credit Card Auto Rental Insurance Study

When most people think of credit card perks, their minds turn to rewards, low interest rates and the like. However, credit cards naturally provide a number of far-reaching standard benefits that help protect cardholders from both monetary loss and unnecessary hassle. One of these benefits is car rental collision protection, which is primarily driven by the card network and not the card issuer.

To provide context, roughly 20% of consumers always purchase supplemental insurance coverage when renting a car, according to a study from Progressive Insurance, and another 20% do so on occasion. Sitting atop the list of reasons for such purchases is confusion as to whether personal auto insurance extends to rental cars. Indeed, 62% of consumers do not believe their personal auto insurance automatically covers rental cars, according to a survey conducted by the National Association of Insurance Commissioners. Similarly, 24% aren’t sure whether their credit cards provide any sort of coverage either.

Warning: Payday Loans May Cause Excessive Money Loss, But Don’t Throw the Baby Out With the Bathwater

Pros Cons Of Payday Loans

Brenda Procter has been fighting the good fight against payday lenders for 20 years, and boy does she have some stories to tell.

For starters, Procter — a Missouri state extension specialist and professor of personal financial planning at the University of Missouri — can recount how a local payday lender actually propositioned an obviously cognitively impaired member of her financial counseling group while he was in the drive-through line at Taco Bell, only to be rebuffed by the caseworker sitting in the driver’s seat beside him. 

Ask the Experts: How Can We Improve Financial Literacy in the U.S.?

Experts Financial Literacy

Despite signs of economic recovery, it seems like the list of problems standing in the way of a secure financial future for the U.S. is getting longer by the day. From out-of-control student loan debt and habitual consumer overleveraging to Medicare insolvency and an overcomplicated tax code, we clearly have a lot to figure out in a political landscape that’s far from conducive to progress.

Underpinning, and perhaps exacerbating, all of these problems is the disturbing lack of financial literacy in this country. Far too many people know far too little about personal finance, and our poor overall performance in that area simply puts undue pressure on already flawed programs.

Ask the Experts: If I Could Make One Change to the Tax Code, I Would…

Experts Share Ideal Tax Code Changes

In this edition of our “Ask the Experts” series, we at Card Hub surveyed authorities on tax policy from around the country about how they would choose to alter the tax code in an ideal world.

With tax season in full swing, the economy still floundering, and the federal government’s budget mess yet unresolved, it seems that no one is immune to money woes these days.  That’s not likely to change anytime soon either, what with Congress acting like kids on a cross-country road trip and the economic recovery doing its best impression of the University of Maryland mascot.

2014 Currency Exchange Study

CardHub-Currency-Exchange-StudyAs we all know, exchanging currency is necessary for most trips outside the United States, and there are a variety of ways to convert U.S. dollars into the currency used in your destination. Banks, credit card companies, credit unions and the currency-exchange companies that typically operate out of airports and train stations all offer currency conversion services at varying rates and with different fees. But which one offers the best deal? It’s commonly said that credit cards are the best way to save on currency conversion, but is that true? And if it is, how much can consumers expect to save using a no foreign transaction fee card?

In order to find out, CardHub conducted a study whereby we analyzed online rates and anonymously called the nation’s largest consumer banks as well as Visa, MasterCard and one of the Travelex locations in the John F. Kennedy Airport (Visa and MasterCard are the most widely accepted card networks around the world, and Travelex is the world’s largest currency exchange operator). Both for uniformity’s sake and because the Euro is the most prevalent foreign currency, we gathered information about the U.S. Dollar-to-Euro exchange rate as of May 8, 2014. In other words, we determined the dollar amount needed to buy one Euro from each of the companies polled. Please find the results of this study, as well as our findings from previous years, below:

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Our content is intended for general educational purposes and should not be relied upon as the sole basis for managing your finances. Furthermore, the materials on this website do not constitute legal advice and should not be relied upon as such. If you have any legal questions, please consult an attorney. Please let us know if you have any questions or suggestions.