A Free $30 Costco Gift Card; Troubling Signs For The Economy

Troubling Signs Emerge as Credit Card Debt Hits Record High

As credit card debt hit an all-time high, just shy of $1 trillion, in the final three months of 2022, delinquencies among borrowers accelerated. Balances grew $61 billion in the fourth quarter from the previous one to $986 billion, the Federal Reserve Bank of New York found. That marked the largest quarterly increase and the highest total since the series began in 1999. At the same time, the rate at which credit card holders missed payments and became more than 90 days behind was higher than before the pandemic, especially among younger borrowers, a potentially worrying sign when the student loan pause lifts later this year. [Yahoo Finance]

You Can Get a $30 Gift Card for Joining Costco Right Now

We’ve already done the math and determined a $60 Costco Gold Star membership is worth the cash, but it’s an even better deal when you get money back for joining. For a limited time, when you sign up for Costco’s basic membership, you’ll receive a $30 “Digital Costco Shop Card,” which is a fancier way of saying $30 to spend on whatever you want at Costco. [LifeHacker]

Bank of America and JPMorgan Chase Report Rising Delinquencies

The two largest banks in the U.S. have reported rising delinquency rates on their credit cards. Both Bank of America and JPMorgan Chase said in filings with the Securities and Exchange Commission that their delinquency rates rose in January. This news came two days after Discover Financial reported that its credit card delinquency rate has been rising each month since May 2022, reaching 2.67% in January, and its net charge-off rate was the highest it had seen since February 2021 as it hit 2.81% in January. Other organizations recently reported that they’re seeing rising delinquencies among subprime and near-prime borrowers. [PYMNTS]

Visa and Mastercard Have Embraced Blockchain Technology. It’s a Smart Long-Term Strategy

Considering the disruptive nature of blockchain technology, one could be forgiven for thinking that traditional payment players would be very worried, and perhaps even combative towards, the new payment method. But rather, Visa and Mastercard, the two largest payment rails in the world, have embraced blockchain technology, implementing it into several of their products and services. They’ve also vowed to keep innovating around the technology as well. Mastercard, for instance, has at least 89 blockchain patents. In many ways, blockchain technology heightens the competition for these large, traditional payment players. But that’s a key reason why embracing the technology is a smart long-term strategy for both Visa and Mastercard. [The Motley Fool]

Wells Fargo, Eyeing Growth in Credit Cards, Lands Hotel Chain as Partner

Wells Fargo has nabbed a co-branded hotel card partnership that was previously held by Barclays, notching a win in the megabank’s efforts to revitalize its credit card business. The bank’s new multi-year partnership is with Choice Hotels International, which operates brands such as Radisson Hotels, Comfort, Quality, Clarion, Econo Lodge and Cambria. Choice Hotels has nearly 7,500 properties across the globe. The announcement comes as Wells retools its credit card portfolio. In recent years, the bank has launched a new suite of Wells Fargo-branded cards aimed at growing its customer base after years of underperformance. [American Banker]

Apple to Scrutinize Customer History for New ‘Buy Now, Pay Later’ Service

With Apple pushing into the lending business with a “buy now, pay later” service, the company is laying out rules for how it will approve transactions. One key factor: whether you’ve been a good customer in the past. The Apple Pay Later service, announced last year but still in the testing phase, will evaluate borrowers based on their spending history and even which of the company’s devices they own. The program, which lets shoppers make purchases and then pay over installments, also will look at whether customers have applied for an Apple Card credit card and the other cards they have linked to their Apple Pay accounts. [Bloomberg]

Number of Credit Cards Issued Via Digital Card Platforms Projected to Surge

A new study from Juniper Research is forecasting the number of credit cards issued via digital card issuance platforms will exceed 321 million globally by 2027, up from 120 million in 2023. Digital card issuance platforms allow card issuers to create cards using an API-driven approach; enabling cards to be delivered instantly to digital wallets, with the option for a physical card; boosting flexibility. [CU Today]

Retailers Oppose Banks Seeking More Time on Debit Routing Rule

A group of banks asked the Federal Reserve Board to give them another year and a half to implement a debit routing rule, but a merchant and retail trade group argues they’ve had plenty of time to comply. The bank groups, including the American Bankers Association, the Consumer Bankers Association and the Credit Union National Association, waved a host of reasons in their letter as to why they shouldn’t have to meet a July 1 deadline to satisfy the rule. The rule would force card issuers, most of which are banks, to offer merchants more than one debit routing option. It’s a regulation that went into effect as part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, but there’s been more than a decade of haggling over whether the requirement should apply to online transactions as well. [Payments Dive]

Goldman Sachs Scraps Idea for Direct-to-Consumer Credit Card after Strategy Shift

Goldman Sachs has dropped plans to develop a Goldman-branded credit card for retail customers, another casualty of the firm’s strategic pivot. Not long ago, CEO David Solomon told analysts that the bank was developing its own card, which would’ve made use of the platform Goldman created for its Apple Card partnership. A Goldman card would’ve been part of a suite of products, including a digital checking account, to help enhance the profit margins and loyalty of its retail efforts, according to people with knowledge of the matter. That vision unraveled after Solomon bowed to pressure to stem losses from its consumer businesses as storm clouds gathered on the U.S. economy last year. [CNBC]

Venezuelans Say Credit Cards That Were Once Lifeline Now ‘Useless’

Credit cards are becoming increasingly useless in Venezuela because of high inflation and government restrictions, hurting people already struggling to meet daily needs on low salaries, banking industry sources, analysts and consumers said. As incomes have fallen and living costs have grown, credit cards have become vital for many people to make everyday purchases in supermarkets and pharmacies, even as credit limits stagnate and some banks eliminate the cards altogether. [Reuters]

Thousands of UK Parents Swap Piggy Banks for Plastic

Debit card providers in the UK have revealed the trend in under-16s using pre-paid debit cards has filtered down to primary aged children as young as six. There has been a boom in under-16s using prepaid debit cards to spend their pocket money. Online bank Revolut has seen the number of under-18s using one of its cards rise from 250,000 to 1.15 million in just two years, including more than 10,000 six-year-olds. [Daily Mail]

Most Consumers Can’t Live Without Their Mobile Banking App, Study Shows

About 87% of consumers are using their digital banking app at least once a month, which is 2% more than last year. Demand for a single bank app that helps consumers handle all their banking needs isn’t going anywhere; unified banking experiences are here to stay. The convenience of paying digitally is turning doubters into believers. 82% of all consumers pay digitally once a month or more, and 47% are doing so at least once a week, representing a 5% YoY growth from 2021. The majority of consumers (56%) report paying regular attention to their credit, as well as undertaking efforts to maintain a good score. [Tear Sheet]