Hike Effect Rates on Credit Cards; Capital One’s big Taylor Swift promotion

Fed makes history with fourth consecutive three-quarter point rate hike

The Federal Reserve on Wednesday approved a fourth consecutive three-quarter percentage point rate hike as part of its aggressive battle to bring down the white-hot inflation plaguing the US economy. The oversized hike takes the central bank’s benchmark benchmark rate to a new target range of 3.75% to 4%. It is the highest federal funds rate since January 2008. Wednesday’s decision marks the Fed’s toughest policy decision since the 1980s and will likely add to the economic pain of millions of American businesses and households by increasing the cost of borrowing again. [CNN]

How the Fed’s rate hike may impact your credit cards and debt

With the latest Fed increase and another potentially on the way before the end of 2022, here’s how your credit cards could be affected. Your APR will increase. Most credit cards have variable APRs, which means they fluctuate and are sensitive to changes in the market and the fed funds rate. For those with a high balance, carrying over that balance from month to month will start to cost them dearly. For your information, your issuer is not required to notify you when rates increase due to a federal rate increase. Since your current balance will be affected by a higher rate, your minimum payment will likely increase. [Fortune]

Some Taylor Swift fans are signing up for Capital One credit cards in hopes of securing tickets for her first tour since 2018

Taylor Swift just announced the US leg of the Eras Tour for 2023, and superfans are taking extra steps to try and score tickets. In addition to hours of waiting in virtual lines to register for verified fan presales with Ticketmaster, some Swifties have noticed that Capital One credit and debit cardholders are getting early access to tickets days before they go live. for sale to the general public. Hundreds of fans posted on social media that they were applying for Capital One cards. [Business Insider]

Credit card debt returns to pre-Covid-19 pandemic levels

Credit card debt has recently taken another step: it’s back to where it was before the pandemic. Total card balances in the United States hit $916 billion in September, nearly identical to December 2019 levels, according to Equifax. Clearances are up 9% from January and about 23% above their April 2021 pandemic low. Americans are spending and borrowing, despite fears that a recession is looming. Rising card balances could be a harbinger of financial difficulties. Consumers are still paying a higher share of their balances than they were before Covid-19 hit, according to card issuers, but that figure at some lenders is starting to drop. [The Wall Street Journal]

JP Morgan Chase will create a rental payment platform for tenants and landlords

JP Morgan Chase is piloting a platform to facilitate rent payments for tenants living in multi-family dwellings. The new technology, called Story, is a rental management tool for owners of multi-family buildings. As a core feature, Story will allow landlords to automate rent bills and receive rent payments. Since not all tenants pay their rent on time or in full, Story serves as a platform to help landlords learn which tenants have paid and which still owe. Additionally, the new offering will provide landlords with analytics, help them determine rental prices and even offer a tool to screen potential new tenants. [Finovate]

‘It ruined everything’: Gen Z’s debt problem ‘Buy now, pay later’

BNPL businesses have been plagued by delinquency this year as inflation bites. The CFPB found that younger borrowers are more likely to have loans in “derogatory status”, meaning they are either in default or sent to a third-party debt collector. About 11% of borrowers paid at least one late fee in 2021, an increase from the previous year. And 18% of consumers aged 18-29 fell behind with their payments in 2021. [Bloomberg Law]

Interest rates on personal loans at near-record spread with credit cards, increasing savings opportunities

As the Federal Reserve raises interest rates to reduce inflation, the impact of rate hikes can vary across different forms of debt. The average interest rate on credit cards was 16.27% in August, while the average interest rate on personal loans was 10.16%, according to the latest data. This is one of the largest spreads between commercial bank interest rates on credit card plans and 24-month personal loans in the St. Louis Fed’s recorded history. According to a survey, half of Americans have fallen behind on their credit card debt amid high inflation. If you have high-interest credit card debt, you can consider paying it off with a personal loan at a lower interest rate, which will save you money each month. [Fox Business]

54% of Americans want holiday gift cards

This holiday season, most Americans would like some gift cards please. According to the National Retail Federation, 54% of Americans surveyed said gift cards are the most sought-after gift this holiday season. It’s hardly surprising that so many people are looking for gift cards in 2022. Just about everything you can think of, from gas to groceries, has gone up in price this year. Giving someone a gift card is now an immediate form of financial relief. You can use the card for something you need or something you would like to have. [GO Banking Rates]

Goldman Sachs seeks to impose order on the expansion of the crypto universe with a classification system

Goldman Sachs is making a bid to normalize how the financial industry talks about, tracks and invests in the burgeoning universe of digital assets. According to the leaders of the three companies. [CNBC]

Mastercard CEO: Crypto has ‘a long way to go’ before going mainstream

Crypto’s poor year could mean it will take a little longer for digital currencies to gain widespread adoption, according to Mastercard CEO Michael Miebach. “I think there’s a long way to go before crypto becomes mainstream,” Miebach said. It has been a very volatile year so far for the entire crypto complex, which in turn has held back its broader development. Rising interest rates have sent down the share prices of upstart crypto trading platforms such as Coinbase and Robinhood. At the same time, mass layoffs in the space are well underway and the higher rate backdrop has also weighed heavily on the pure prices of digital assets, from bitcoin to dogecoin. Miebach added that the industry needs to sort out regulatory and compliance considerations before mass adoption of crypto. [Yahoo Finance]

Mobile banking is now the channel of choice for consumers

American consumers prefer banking through mobile apps over any other method, according to new research from the American Bankers Association. A consumer survey found that 45% of respondents said they most often use mobile apps on smartphones or tablets to manage their bank accounts. This was followed by 27% who said they most often use online banking via their laptop or PC. [Banking Exchange]

We consume up to the equivalent of a plastic credit card every week

Here’s something that will haunt you: You probably consume the approximate plastic equivalent of a credit card every week, according to a study by the World Wide Fund for Nature. The plastic you involuntarily eat and breathe comes in the form of microplastics, tiny amounts of the stuff that leaches out of our everyday objects. [CNN]