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Consumers Overspent During Holidays; Who Really Owns Crypto?

Consumers Overspent During Holidays; Who Really Owns Crypto?
Written by publishing team

1 in 3 Americans spend too much during vacations, which leads to increased credit card balances

Holiday sales are on track to grow as much as 11.5% through 2020, according to estimates by the National Retail Federation. About 30% of Americans said they overspend during gift-giving season, according to a WalletHub post-holiday survey. Although Omicron led to a new wave of infections, 56% said that Covid had not affected their plans. For most shoppers, increasing their spending also means relying more on credit cards or buying now, and paying later in finance to spread their expenses. As a result, nearly 36% of consumers went into debt, due to an average of $1,249, according to a survey by LendingTree. [CNBC]

Crypto usage is rising, most of them will use it for mobile purchases

More than a third of 18-54 year old consumers own cryptocurrency according to a recent Cantaloupe study, with 18-34 year olds (37%) and 35-54 (33%) more likely to own cryptocurrency Only slight. Moreover, 67% of those who own cryptocurrency are willing to consider using it for purchases if it is tied to a mobile wallet, with an additional 19% saying they would consider using a crypto tied to a mobile wallet if that was easy. [Vending Times]

User experience dominates credit card decisions

The ultra-low interest rate may seem like the most interesting feature to hold for potential credit card holders, but research shows that there are a myriad of other factors that consumers take into account when deciding whether to use one card over another. According to new research, 75% of consumers consider user experience benefits such as cashback rewards, data privacy, and credit building tools. The research indicated that 70% of card seekers consider data security a top priority, and 75% of active users who are also parents look for credit building tools when considering a card. [PYMNTS]

Data about US credit card line usage

American credit card lines, the amount that issuers guarantee per account opened, have reached a historically high level. In the latest figures released by the Federal Reserve, lines of credit totaled $3.9 trillion. However, only 27% of these lines of credit are in use, and $3 trillion is available in the form of open credit. Note that the line usage is in a bearish swing, based on an usage rate of 20.3%. In contrast, the utilization rate in 2009 was 27.7% after credit card issuers began contracting lines of credit during the Great Recession. [Payments Journal]

JPMorgan Chase Unleashes Lawsuit Against Credit Card Customers

After a hiatus of nearly a decade, Chase has resumed suing indebted clients. Consumer lawyers say the bank is back to its old ways. From early 2020 until today, Chase has filed thousands of lawsuits against credit card customers who have defaulted on their payments. Chase stopped pursuing credit card lawsuits in 2011, in the wake of the last major economic downturn, after regulators discovered the company had filed tens of thousands of flimsy lawsuits, at times overestimating what customers owed. Today, just as she did before she ran afoul of the CFPB, Chase is producing affidavits from the same San Antonio office where low-ranking employees have given hundreds of thousands of affidavits in the past, according to defense attorneys and court documents. [ProPublica]

Bank Tech trends to watch in 2022

The bank’s technology initiatives this year will be driven by the need to make financing inconvenient for consumers and businesses. One manifestation of this is consolidated banking, a version of the open banking movement that began in Europe, where banks provide their services through all kinds of companies that are not banks. Another is the efforts of banks to personalize, trying to provide timely advice to consumers to help them avoid financial problems and take advantage of opportunities. Allowing customers to authorize themselves using a selfie and facial recognition is the perfect way to provide security for the sofa. Banks and financial companies will also continue to try to become a trusted place for consumers and businesses to go for cryptocurrency services as digital assets continue to grow in popularity. [American Banker]

The explosive growth of mobile payments for cross-border transactions

The amount of money traveling around the world each year is staggering, with $156 trillion expected to cross international borders annually by 2022. These payments include everything from multibillion-dollar corporate acquisitions to small-value remittances sent by migrant workers, but they are one of the fastest Growing market segments are individual consumer transactions of goods and services. A major contributor to this growth is the growing popularity of mobile commerce, as consumers use their smartphones to purchase items ranging from toilet paper to computers to cars. Mobile commerce is expected to grow by 70% in the next five years. [PYMNTS]

Washington puts the “buy now, pay later” industry under notice

The buy now, pay later industry, an increasingly important driver of retail sales, may face new rules as capital scrutiny increases. The Consumer Financial Protection Bureau is looking into the policies of Affirm, Afterpay, Klarna, PayPal and Zip, a few of the most prominent players in the BNPL industry. The French central bank fears that these platforms may encourage excess spending and bypass existing regulations on credit and lending. It also plans to examine data collection practices. [Axios]

Petal credit card startup reaches $800 million

Petal, a credit card startup, has raised $140 million in a funding round led by Tarsadia Investments. The funding round values ​​the company at $800 million. The startup offers a solution for consumers who don’t qualify for traditional credit cards, or who don’t have a credit history. Its technology measures creditworthiness on income, spending and savings in a process it refers to as “CashScoring,” and it has approved nearly 300,000 credit cards so far. The company says its members with no prior credit history have achieved an average credit score of 676, which then qualifies them for loans and other mortgages that were previously unavailable. [Bloomberg]

Visa and Mastercard Recruit Fintechs to Unbanked in Latin America

Visa and Mastercard are courting fintech companies to help them reach more consumers in Latin America, as a large unbanked population has turned to unbanked institutions for financial services. As tech companies gain access to a market that banks haven’t adequately served, tech partnerships have become vital to U.S. card networks’ efforts to expand across borders. [American Banker]

Bank of America CEO: Consumers are spending as fast as he can see

The head of the country’s second-largest bank said consumers are spending “at a faster rate” than he’s ever seen, but he remains concerned about how inflation and supply chain issues will affect the economy in the winter. Bank of America Chairman and CEO Brian Moynihan said spending on the bank’s debit and credit cards has risen as the economy has recovered from the recession. But Moynihan also said the recent dip in consumer confidence — by one measure to the lowest point in a decade — may indicate that higher costs are adding to Americans’ frustration with the ongoing pandemic. [Associated Press]

Citi Prestige has made its $250 annual travel credit more flexible for another year

In the wake of the coronavirus, Citi has attempted to prevent Citi Prestige cardholders from canceling by adjusting its benefits. It’s a travel credit card, after all, and its $495 price tag is hard to justify for a basic card member if you’re not traveling. For the third year in a row, Citi is expanding its annual travel credit by up to $250 to include spending on supermarkets and restaurants. [Business Insider]

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