High-Cost Medical Credit Cards a Growing Problem for Patients
How do you deal with the ballooning cost of medical care? The answer for a growing number of Americans: pay it with plastic. Medical credit cards, once limited to esoteric procedures that weren’t covered by insurance, have grown in popularity in the past decade as health care costs have continued to rise and Americans are spending more out-of-pocket for even routine procedures. But these products can cause trouble for patients, with many of them overpaying for specialized medical finance products, signing up for contracts they don’t understand or, in the worst-case scenario, piling on debt they can’t get out of, according to a recent report from the CFPB. [CBS News]
Medical credit cards have grown as health care costs have risen but can present problems
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Credit Card Debt Surges Again in March Despite High Interest Rates
After pulling back slightly in February, Americans went back to borrowing on credit cards in March, despite record-high interest rates. This indicates that consumers continue to struggle to make ends meet in this deteriorating economy. It also reveals that the Fed’s monetary tightening is not cooling spending as promised. Consumer debt spiked by another $26.5 billion in March, a 6.6% increase year on year, according to the latest data from the Federal Reserve. It was the biggest jump in total consumer debt in four months. [Schiff Gold]
Consumers Relying on Credit Cards to Pay Bills
Consumers are relying on their credit cards and installment loans again to pay bills each month as balances for both types of debt reached record- or near-record high. Balances for credit cards in the U.S. reached $917 billion in the first quarter, almost a 20% increase year-over-year as consumers struggle to pay their bills with higher inflation rates and interest rates, according to TransUnion’s latest report examining consumer spending during the first quarter. The average credit card balance is $5,733 in the first quarter, rising by 14.4% year-over-year. [The Street]
Some Buy Now Pay Later Users Face Rejection
Some users of buy now, pay later apps might face something new when they try to use the payment method: rejection. Higher interest rates and recession concerns are challenging the business model behind services such as Affirm, Klarna and Sezzle, which say they are tightening credit standards to focus on making a profit, rather than growth. Some customers say they have been caught off guard by unexpected denials or lower spending limits when they try to make purchases. [The Wall Street Journal]
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83% of Consumers Still Prefer Going to a Traditional Bank over Digital Transactions
A new UserTesting study revealed that when it comes to finances and banking, people across all generations prefer a human touch: 83% said they prefer using a traditional bank for their financial needs. A third of people (36%) said they “strictly” use traditional banks, ditching digital completely, including 40% of Gen Z and 34% of baby boomers. In comparison, only 10% overall said they rather just use a digital bank with no physical presence. People who prefer traditional banks said they like having the confidence their transactions are being handled correctly (60%) and being able to talk to a human (51%). [Study Finds]
Amazon Prime Members: Buy a Gift Card for $50 and Get a $5 Credit
If you’re an Amazon Prime member, there’s an offer right now that allows you to buy a $50 Amazon gift card, but it really only costs you $45. From now until May 14, 2023, you can buy an Amazon e-gift card for $50 and you get a $5 Amazon credit to use later. You can send the card by email or by text. Once you buy the e-gift card, you’ll get a confirmation email that tells you your $5 credit will automatically be applied to your next purchase. You have to use your promotional credit by June 29, 2023. [WFMY]
Mastercard Taps Open Banking for Digital Account Opening
Mastercard has unveiled a digital account opening tool that uses open banking to integrate customer verification with identity insights into a single API. Open Banking for Account Opening verifies a consumer’s account ownership and their identity in real-time. It also prefills account and routing data to minimize errors. The result, says Mastercard, is a simpler, faster, and safer way to open a new account for the 93% of consumers likely to use digital payments this year. [Finextra]
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Mastercard, PayPal and Robinhood Dive Deeper into Crypto as Industry Shows Promise
In recent weeks, a number of brand-name mainstream financial institutions have been rolling out new crypto products and services in an attempt to make the space more accessible. At the end of April, Mastercard, PayPal and Robinhood all independently talked about the measures they’re taking to do so at Consensus 2023 and how they are furthering their moves into the crypto ecosystem. [Tech Crunch]
Warren, Other Senators Call Out Banks over Card Late Fee Practices
A group of seven senators sent letters Tuesday to the CEOs of 10 of the largest U.S. credit card issuers, demanding details about their companies’ late fee practices and citing a CFPB effort to curtail those fees. They demanded responses by May 23. The Democratic Senators, along with Independent Bernie Sanders, sent letters to the CEOs of JPMorgan Chase, Bank of America, Citi, Wells Fargo, U.S. Bank, PNC, Capital One, American Express, Discover and USAA, asking about the companies’ efforts “to quash that rule.” Banks and banking trade groups have pushed back on the CFPB’s February proposal to limit credit card late fees to $8 per payment and ban those fees from being more than 25% of the minimum payment. [Banking Dive]
Senate Holds First Hearing on Bill to Help Marijuana Businesses Access Financing
The Senate Banking Committee is holding its first-ever hearing Thursday on a bipartisan bill that would allow the cannabis industry to access traditional banking services, which marijuana businesses see as critical to their survival. Under federal law, banks and credit unions face federal prosecution and penalties if they provide services to legal cannabis businesses since it is still a Schedule I substance, along with heroin and LSD. Without access to traditional banks, legal marijuana businesses can’t access loans and capital, or even use basic bank accounts. As such, businesses are forced to operate in a cash-only model, which can result in robbery, money laundering, and organized crime. Key components of the bill protect banks that work with state-legal cannabis businesses. The legislation would shield them from being penalized by federal regulators, creating a safe harbor from criminal prosecution, liability and asset forfeiture for banks, their officers or employees. [CNBC]
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Walmart Gift Card $4 Million Settlement: Who Qualifies and How Do You Apply?
Walmart will pay $4 million in connection to gift card scams. Walmart gift scams started in 2015 when fraudsters instructed victims to purchase and send cards ranging from $500 to $1,000. Between 2016 and 2017, Walmart reportedly froze the balance of gift cards suspected to be part of these schemes, money that was later sought by the Department of Justice. To qualify, a person must have purchased a gift card from April 1, 2016, and July 31, 2017 as a result of fraud. The amount consumers can receive is based on the amount loaded on to the Walmart gift cards they purchased. Deadline to apply is July 14. Documentation of gift card purchase is required. [AL.com]