CFPB Report Finds Large Banks Charge Higher Credit Card Interest Rates than Small Banks and Credit Unions: CFPB

Switching to a lower rate could save the average borrower hundreds of dollars per year

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today reported on the first set of results from the newly updated Terms of Credit Card Plans survey. The survey data reveal that large banks are offering worse credit card terms and interest rates than small banks and credit unions, regardless of credit risk. In fact, the 25 largest credit card issuers charged customers interest rates of 8 to 10 points higher than small- and medium-sized banks and credit unions. This difference can translate to $400 to $500 in additional annual interest for the average cardholder.

“Our analysis found that the largest credit card companies are charging substantially higher interest rates than smaller banks and credit unions,” said CFPB Director Rohit Chopra. “With over $1 trillion in credit card debt outstanding, the CFPB will be accelerating its efforts to ensure that consumers can access better rates that can save families billions of dollars per year.”

Today’s survey data include information on all general-purpose credit cards of the largest 25 credit card issuers in the United States. The data also include a representative sample of products from small- and medium-sized banks and credit unions across the country. Among some the survey’s key findings:

Read more at The Consumer Financial Protection Bureau (CFPB)

Have a tax law question?

Our #IRS Interactive Tax Assistant has answers.

Watch this short video to learn more:

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Several #IRS 'Taxpayer Assistance Centers' will provide in-person help

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Remember: The IRS is here to help you understand and meet your tax obligations. Take advantage of these resources and have a stress-free tax season!

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Public Affairs Specialist

Tax Outreach, Partnership and Education

Email: jose.l.santiago@irs.gov

27% of Americans Plan to Open a New Credit Card This Year & Most Want Cash Back

Nearly 600 million credit card accounts recorded in the US as 2023 closed, and the average consumer has nearly four credit cards each. But every person has preferences for the types of accounts they carry, though some are restricted to what their credit score determines they qualify for.

We commissioned a survey of more than 1,000 U.S. adults to learn more about the types of credit accounts Americans are opening and how those interests vary by age. The survey found that more than one-quarter of Americans (27%) plan to open a new credit card this year, and that number increases to 34% of Gen Z and 42% of millennials surveyed planning to open a new account in 2024. 

58% Favor Accounts With Cash Back Rewards

Of those who said they’ll look to get a new card this year, 58% of respondents favor credit cards offering cash back, 52% want a card to help them build their credit, 44% will seek a retail card such as an Amazon or Target account, and 30% will seek a travel card.

76% Say an Annual Fee is a Dealbreaker

Read more at CARDRATES

Emergency Loans: Your Lifeline During Financial Crisis

In times of financial crisis, it’s easy to feel overwhelmed and helpless. But there is a lifeline that can provide immediate relief – emergency loans. These loans are designed to help individuals facing unexpected expenses or urgent financial needs, providing them with the funds they need to bridge the gap and regain financial stability.

Whether it’s a medical emergency, car repairs, or a sudden job loss, emergency loans can be a savior in times of desperation. Unlike traditional loans, emergency loans have a quick approval process, with minimal paperwork and hassle. They offer flexible repayment options, making it easier for borrowers to manage their financial commitments during tough times.

With the rise of online lending platforms, accessing emergency loans has become even more convenient. In just a few clicks, individuals can apply for a loan and receive funds directly into their bank account. These quick and accessible solutions can make all the difference when it comes to managing unexpected financial emergencies.

Read more at FINTECH ZOOM

Community Financial Institutions: Going Beyond Being Friendly

Community banks, deeply rooted in their local domains, have played a pivotal role in supporting the financial needs of individuals, small businesses, and local economies. But the digitalization of the industry has altered the playing field.

Looking forward, what are the unique advantages local financial institutions can bring to the table beyond ‘being friendly’? What are the challenges they face in competing with larger marketplace leaders? And what are the strategies management must adopt to ensure they remain future-ready.

I am excited to have Jim Perry, Senior Strategist at Market Insights, Inc. on the Banking Transformed podcast. We will be discussing how community banks and credit unions can best co-exist in a marketplace that includes regional and national banks, tech companies, fintech firms and even non-financial players.

Read more at The Financial Brand

Two-thirds of Americans think they’ll be better off financially in 2024: survey

(The Hill) — Most Americans are optimistic about what the next year will bring for them financially, with two-thirds saying they believe they’ll be better off in 2024, according to a new survey from Fidelity Investments.

Younger generations were more likely to say they’ll be better off financially next year. Just over three-quarters of Generation Z respondents and 79 percent Millennials said as much, compared to 64 percent of Generation X and 52 percent of Baby Boomers.

However, over one-third of Americans in the survey said they are currently in a worse financial situation compared to the same time last year, with the majority attributing the decline to inflation and cost of living increases.

Inflation was the top reason that Americans said they were not able to meet their financial goals this year, and it remains one of their top financial concerns for 2024, the Fidelity survey found.

Some 40 percent said that inflation’s impact on their day-to-day expenses and saving was their primary concern for next year, followed by unexpected expenses at 37 percent and economic uncertainty at 33 percent.

Read more at MSN.COM

BBB details what you should know about debt relief

Dale Dixon with Better Business Bureau joined Wake Up 2Day Wednesday morning to offer some tips on what to look out for.

“BBB has received reports of predatory debt relief, consolidation and credit repair companies that advertise quick and extensive fixes for low credit scores and defaulted debt, but their ability to enact change is often much more limited than they say,” Dixon said. “In some cases, consumers report that big fees in debt relief programs and lackluster results from credit repair businesses have lost them thousands of dollars and left them worse off than before.”

A lot of people trying to pay down debt may be overwhelmed with what they should look for in a company that claims to help with these things. Dixon advises to know the difference between a debt consolidation program, or turning your debt into single loan, and debt settlement programs, where we see the most complaints from.

Read more at KHON2

Mobile Payment Security Guideline

Worldwide mobile payment revenue will grow to $18.84 trillion by 2030. In other words, it’s here to stay. But, despite its convenience, it’s not immune to bad actors. Estimated mobile app finance fraud was over $2.64 billion between 2022 and 2023 alone.

Naturally, mobile-based phishing attacks and payment app fraud prompt business owners to ask, “Are mobile payments secure?” Luckily, there are secure Mobile Payment Solutions like E-Complish that offer robust security measures.

Additionally, if you are adopting mobile payments to future-proof your company, then adhering to the mobile payment acceptance security guidelines below will safeguard your business and customers’ cardholder data from associated security challenges.

How Mobile Payments Work

Read more at e-complish

ATTENTION:

a 'Consumer Financial Education' newsletter

We are excited to announce that starting in the 2nd quarter we will be producing a new newsletter dedicated to providing financial education to unbanked and underbanked consumers. Our goal with this product is to empower individuals to take control of their financial future by providing them with the knowledge and tools they need to make informed decisions. The newsletter will cover a range of topics, including budgeting, saving, investing, and more. We believe that presenting this product to your customers will demonstrate your commitment to their financial success. We'll keep you apprised of our progress. We invite you to contact us with any questions.

dan@afspassociation.com

Biden Administration Releases Major Details On New Student Loan Forgiveness Plan Tied To Hardship

The Biden administration on Thursday released the first major details on a proposed new student loan forgiveness plan based on financial hardship. The Education Department released regulatory text in advance of public hearings scheduled for next week.

Student loan borrower advocates had been pushing the administration to consider hardship-based student loan forgiveness and to allow the public and key stakeholders to weigh in. Advocacy groups praised the release of the draft regulations.

“For tens of millions of working people, the pursuit of a college degree leads to a lifelong debt trap — but this proposal shows that the Biden Administration is working to change that,” said Persis Yu, Deputy Executive Director at Student Borrower Protection Center in a statement. “The new rule’s expansive definition of hardship proposed today will drive debt relief to anyone who had to borrow for college and still struggles to stay afloat.”

Read more at FORBES