Could Your Credit or Debit Card Be Making You Fat?
The authors conclude swiping plastic for payment encourages us to eat junk food. The link between debt and overweight is impulse. People are more likely to grab unhealthy foods on impulse and are then more likely to go ahead and make the purchase if they’re using plastic instead of cash. Research suggests using debit or credit cards feels less uncomfortable than using cash. As a result, using plastic payment methods increases the likelihood of impulsive purchases, including junk food. When paying with plastic, we’re more apt to go ahead and supersize that combo meal—oh, and how about throwing in an apple turnover, too? After all, you don’t have to worry about the total as it magically disappears into the whole process of paying with plastic. [Syracuse.com]
Credit and debit card usage may lead you to supersize your food order and buy extra items
Americans’ Credit Card Fees Have Surged 50% Since Biden Became President
Americans paid nearly 50% more in credit card expenses last year compared to the year before President Joe Biden took office, adding fuel to cries by Republican over the cost of living crisis facing voters ahead of November’s election. In 2023, U.S. credit card holders shelled out $157 billion in interest and fees on their credit cards, an increase of $51 billion compared to 2020, according to information provided by banks to the FDIC. Meanwhile, credit card delinquencies are the highest in 13 years, according to Moody’s Analytics, as inflation-battered shoppers have charged up a record $1.13 trillion as of the final quarter of 2023. [New York Post]
Why Credit Card Debt Is So High Right Now
The higher cost of everything from housing to high-tops to haircuts are a major culprit. Although inflation has moderated since it peaked in June 2022, Americans, particularly lower-income families, are relying more on credit cards to cope with the sticker shock. To fight inflation, the Federal Reserve hiked its benchmark interest rate a total of 11 times between March 2022 and July 2023, raising it from around zero to a range of 5.25% and 5.5%. That rate influences a host of other borrowing costs, including those for credit cards, car loans and mortgages. Paying off credit card debt over time has become considerably more expensive for the roughly half of borrowers that revolve a balance from month to month, as opposed to paying off each month’s bill in full. [Time]
A Capital One-Discover Merger Could Raise Credit Card Interest Rates
After a merger, Capital One would have the option of raising existing Discover customers’ interest rates to match the Capital One rates. Industry experts call this kind of move forward repricing because those higher interest rates would only apply to new purchases the cardholder makes, the FDIC explains. Capital One would not be able to change the interest rate the cardholder is paying on the balance that has already accrued. [Forbes]
60% of US Shoppers Used Split-Payment Options in the Past Year
Split-payment or installment plans such as buy now, pay later enable consumers to spread the costs of purchases over multiple installments. Consumers appear to prefer these options. PYMNTS Intelligence data revealed that in the 12 months before being surveyed, about 3 in 5 shoppers opted for installment plans when shopping. This growing popularity has captured the attention of merchants. 78% of them told PYMNTS Intelligence that they plan to enhance their use of installment plans, while 39% of acquirers, the entities that enable merchants to offer these plans, said they plan to do the same. [PYMNTS]
Mastercard Expands Remittances Reach in New Pact with Alipay
Mastercard is broadening its reach in cross-border remittances through its partnership with Alipay, the mobile-payments super-app backed by Ant Group Co. The agreement, which expands Mastercard’s existing relationship with Alipay, allows consumers to receive money in their digital wallets “in near real-time,” according to a statement. Alipay caters to more than a billion consumers in China. [Bloomberg]
BT Group and Adyen Introduce Tap to Pay on iPhone for Small Businesses
BT Group has announced a significant collaboration today. Its digital and startup incubation arm, Etc., has partnered with Adyen, the global financial technology platform, to introduce an innovative solution for small businesses. The partnership aims to enable small business customers to accept in-person contactless payments with Tap to Pay on iPhone. Tap to Pay on iPhone transforms the payment process for small businesses, eliminating the need for card readers or additional hardware. With this technology, merchants can accept physical debit and credit cards, Apple Pay, and other digital wallets. [Trading View]
HealthLock and Mastercard Team to Prevent Medical Fraud
Medical fraud and overbilling prevention solution HealthLock has expanded its year-old partnership with Mastercard. Beginning April 1, the HealthLock platform will be available to commercial, small business and consumer Mastercard cardholders in the U.S. Through the partnership, eligible cardholders can link their health insurance accounts to HealthLock, which can protect a user’s medical data from data breaches. The platform organizes deductibles, claims and provider information in a secure, digital space. As new claims are entered, the platform is able to analyze and flag each one for potential errors, fraud or overbilling. [PYMNTS]
What Are Credit Card Surcharges and Where Are They Legal?
A surcharge is an extra fee that a business or merchant adds to the price of a purchase when payment is made using a credit card instead of cash. The surcharge is often a percentage of the overall purchase cost and can range from 1% to 4%. These fees began to be passed on to consumers in 2013, following a class-action lawsuit that businesses and merchants brought against Visa and Mastercard in response to such costs. As part of the lawsuit settlement, the surcharge fees merchants had historically been charged by credit card companies and payment processors could be passed to consumers. That surcharge structure allows merchants to add fees as high as 4% to consumer transactions, though the exact amount charged varies from business to business and based on the specific type of card being used to make the purchase. [Fortune]
