2014 Credit Card Application Study

CardHub 2014 Credit Card Application Study How easy is shopping for a credit card online? From one website to the next, how easily can you discern what your interest rate will be on purchase transactions? How about balance transfers? And how much will those rewards points get you in cash, travel or merchandise? Can you readily find this information on the issuers’ websites, or must you read the fine print to find out the real cost and benefit of the card? In our fifth annual Credit Card Application study, CardHub set out once again to find the answers to these questions.
In our analysis, we examined and scored the credit card product websites of the top 10 issuers on several key components related to the costs and benefits of each credit card, including:

1.) Clarity on Rewards: Do the product pages clearly define — without reading the fine print — how to earn rewards and how much these are worth to the customer (e.g., Are 10,000 miles worth a trip to Chicago or Greece?)?

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

EEOC HiringAn 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?

Charitable Giving Tax ExemptionJust 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

Summer JobsWhether 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 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.

2014 Credit Card Debt Study

Card Hub 2014 Credit Card Debt StudyThe economy is doing better, but not as great as the numbers initially make it seem.  That is the clear common theme between the Department of Labor’s May jobs report and the newest figures regarding consumer credit card debt – an indicator of consumer spending habits and household financial health.

While the labor report revealed an addition of 217,000 jobs to the U.S. economy in May, ostensibly bringing employment back above pre-recession record levels, an estimated seven million more positions are actually needed to account for population growth and complete the turnaround.  And while U.S. consumers paid down roughly $32.5 billion in outstanding credit card debt during the first quarter of 2014, that actually represents a 1% decline relative to Q1 2013 and the continued deterioration of credit card habits as Great Recession lessons fade with time.

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

Brenda Proctor - University of Missouri

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.?

Financial Literacy EducationDespite 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 Ideal Tax Code ChangesIn 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:

2014 Credit Card Rewards Study: Issuer Limitations & Transparency

CH 2014 Credit Card Rewards Study

The value of credit card rewards has increased to record levels in recent years. Issuers are now using initial rewards bonuses worth hundreds of dollars to lure the business of consumers who maintained above-average credit standing through the Great Recession.

But while roughly $48 billion in loyalty rewards are dispensed each year, one-third of that amount is never redeemed. Why?

2014 Small Business Credit Card Study

CH 2014 Small Business Credit Card Study Small business owners aren’t people. Well, at least that’s how the current regulatory environment makes it seem. Congress pretty much left the small business community out in the cold by not including credit cards branded for business use within the scope of the Credit CARD Act of 2009. That might not seem like too big of a deal at first, but consider all the CARD Act has done for consumers in recent years.

The law’s bans on bait-and-switch pricing, exorbitant fees and shady accounting practices have resulted in not only a more transparent credit card marketplace, but also a two percentage-point reduction in the cost of credit between 2008 and 2012 as well as a $6 decrease in the average late fee and a near elimination of over-limit fees, according to the Consumer Financial Protection Bureau.

Ask The Experts: Evaluating the CFPB’s Final Rule for Stay-at-Home Parents & Credit Cards

CFPBSay what you will about the NRA and the AARP, the most powerful lobby around might be that of motherhood.  Just think:  public pressure from women’s groups in the interest of stay-at-home mothers actually led the Consumer Financial Protection Bureau to go back and tweak the landmark CARD Act of 2009 – legislation enacted to reform the personal finance landscape.

The Change That Sparked a Movement

You see, the CARD Act contained a so-called “ability-to-pay” clause which required banks to abandon the long-held practice of evaluating household income and personal debts in making credit card approval decisions.  In order to help issuers better gauge applicants’ disposable income, issuers were to start considering both debts and liabilities on the individual level.

CardHub Review: Hawaiian Airlines World Elite MasterCard

Hawaiian Airlines World Elite MasterCardTalk of the “islands” has a definitively affluent connotation to us mainlanders.  And it makes sense when you think about it, given all that money and islands – particularly the Hawaiian ones – have in common. 

For example, Larry Ellison, CEO of the $175 billion cloud computing company Oracle actually owns 98% of Lana’i, Hawaii.  Thinking about your financial needs as a chain of islands also enables you to tailor financial products to specific types of transactions and thereby gather a collection of account terms vastly superior to what any one product could provide.  It’s called the Island Approach.

Ask The Experts: Will New Mortgage Lending Rules Help Prevent Foreclosures?

Will-New-Mortgage-Lending-Rules-Help-Prevent-Foreclosures

The Consumer Financial Protection Bureau (CFPB) has adopted a final rule giving lenders more guidance about making mortgage loans and giving consumers – especially lower income consumers – additional protection against predatory lending.

At least, that’s the objective. The new regulation, which took effect in January, bars lenders from offering those low “teaser” rates that prompted a lot of buyers to purchase homes they couldn’t afford. When the rates on these subprime mortgages reset to double-digit levels in some cases, the monthly payments were unaffordable.

Tale of the Taper: What Reduced Fed Bond Buying Means for the Economy & Consumer Interest Rates

Bernanke-YellenLast May, former Federal Reserve Chairman Ben Bernanke told Congress that the Fed might, in the future, begin to reduce its massive bond purchases under its Quantitative Easing (QE) program. Almost immediately, the financial markets became obsessed with when this “taper” of bond purchases, which was seen as holding down interest rates, would happen.

It finally happened in December when the Fed announced it would reduce its monthly bond purchases from $85 billion to $75 billion beginning in January 2014. But by then the financial markets had almost no reaction. The stock market hit a series of record highs during the month of December and has been erratic thus far through 2014.

Ask The Experts: If I Could Make One Policy Change to Fix the Federal Deficit, I Would…

DeficitOne of the most pressing issues facing our nation these days is the federal government’s massive budget deficit.  The deficit and its implications for the already prodigious national debt have been front and center in the national discourse as a $315 billion surplus in 2001 has gradually transformed into an $885 billion deficit in 2013 under the weight of tax cuts, healthcare policy changes, and spending tied to the War on Terror, Wall Street “bailouts,” the 2009 economic stimulus, and the oft-forgotten interest continuing to accrue on amounts already owed.  With each looming debt ceiling, fiscal cliff, and sequester, the unfortunately partisan debate gains vigor, begging the question of whether we’ll find a solution before we run out of nifty nicknames for the various kick-the-can crises encouraged by our infighting and indecision.

There are plenty of proposed solutions out there – both practical and inane – coming from a variety of sources – from the Brookings Institute to Esquire Magazine’s Commission to Balance the Federal Budget.  But evaluating the efficacy of a potential remedy, of course, necessitates making a proper diagnosis first.

The CARD Act: What It Is, New Rules & More

The CARD ActThe credit card market once resembled the Wild West. Not only were banks basically allowed to advertise one thing and charge another, but a host of other predatory policies designed to maximize profits regardless of the negative impact on cardholders were all too common as well. Then came the CARD Act.

While controversial at the time of its passage in May 2009, the CARD Act quickly gained esteem after its February 2010 enactment.  In short, the law overhauled consumer rights in the credit card space and implemented a new code of conduct for issuers, particularly in terms of their account communications, fees, and rate changes. Credit cards weren’t the only plastic affected by the new law, however, as it also made gift cards more user-friendly by extending expiration dates and cracking down on fees.

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