May 29, 2008 By Liz Morris

HSBC launched a new MasterCard into the growing “green” credit card field yesterday, with the introduction of the Ecosmart MasterCard.

Ecosmart MasterCard holders will receive one point for every dollar in purchases with the card, and can use those points to donate to environmental organizations including The Climate Group, Earthwatch Institute, Smithsonian Tropical Research Institute, Arbor Day Foundation, Wind Power Renewable Choice, and Our Energy.

If they lose their environmental zeal in the future, cardholders can instead use the points for cash back, travel rewards, gift cards or other traditional credit card rewards.

HSBC’s Ecosmart MasterCard joins several other “green” credit cards introduced in the past year or so, including the Brighter Planet credit card from Bank of America, and the Earth Rewards credit card from GE Money.

Click here to apply for the HSBC Ecosmart MasterCard.

May 27, 2008 

Using government debt data and census data, IndexCreditCards.com has determined that the average American adult is carrying $4,246 in revolving debt and the average American household is carrying $8,218 in revolving debt.

These numbers represent a 19% and 13% increase, respectively, over the averages calculated by IndexCreditCards.com in January of 2006. At that time, the average debt per adult was $3,560 and the average revolving debt per household was $7,271.

Data released earlier this month from the Federal Reserve Board estimates that revolving consumer debt in the United States totals $975.2 billion. Using census data from 2006 to the present, IndexCreditCards.com estimates the adult (18 and over) population of the U.S. at 229,655,039 and the total number of households at 116,462,357. Dividing the total revolving debt by the population/household figures gives the resulting debt averages.

Revolving debt is mainly debt from credit cards, although related revolving consumer debt such as home equity lines of credit are included as well. Note that not all revolving debt is long-term debt accruing interest — some of this debt is paid off each month (although pinpointing how much is difficult). However, the trend shows that more and more purchases are being put on credit cards, and undoubtedly the amount that sits unpaid grows as well.

“A 19 percent jump in revolving debt in two-and-a-half years is difficult to believe,” says Justin McHenry, Research Director at IndexCreditCards.com, “but that’s what the numbers tell us. Part of this jump can be explained by the increased use of credit cards in general, including by those who pay off their balances each month. But the jump is too drastic to be explained so easily. Americans are taking on more debt, and there’s every reason to believe they’re having a harder time paying it off.”

May 21, 2008

The average credit card late fee is now $35.20, while the average over-the-limit fees checks in at $36.10. Using data from a cross-section of major and minor card issuers, IndexCreditCards.com found that late and over-the-limit fees ranged from $0 to $39. However, most nationwide issuers charged between $29 and $39 in both categories.

As a frame of reference, a $35 average late fee is roughly equivalent to the monthly finance charge you’d pay if you carried a $2,100 balance at 14% interest.

Over-the-limit fees are even higher, and many cardholders find them even more galling, as logic would suggest that a card would simply be rejected if it hits the limit. Instead, most card issuers allow you to go over your limit, but then charge you a fee for doing so.

Many credit issuers use a “tier” system in assessing fees. For example, your late fee may be $15 if you have a balance of less than $100, $29 if the balance is less than $250, and $39 for balances beyond that. IndexCreditCards.com attempts to take into consideration these fee tiers when calculating the average fees listed here.

IndexCreditCards.com surveys the terms and conditions of a cross-section of cards every six months to determine these average fees.

May 20, 2008, By Seth Harbison

Supermarket chain Meijer announced today that it will offer users of its Meijer credit card a 10-cent-per-gallon discount on gas purchases at Meijer gas stations, beginning June 1 and running through Labor Day. Meijer credit card holders previously got a 5-cent discount on gas when buying with the Meijer MasterCard.

Meijer is a retail chain with almost 200 stores in Michigan, Indiana, Illinois, Ohio and Kentucky. If you’re in one of those states, go here to find the Meijer locations near you.

May 19, 2008

On the heels of the latest Federal Reserve interest rate cut in late April, credit card rate averages are continuing to fall across the board, according to our Credit Card Monitor survey.

The average credit card rate for non-reward consumer credit cards is now 12.41%, down from 12.59% on May 2nd and 13.01% in early April. The average rate on credit cards with rewards fell to 14.27%, down from 14.38% in early May and 14.97% last month.

The averages listed above attempt to take into account the multiple tiers that many credit card issuers offer, instead of accounting for only the lowest listed rates. However, IndexCreditCards.com also tracks the very lowest listed rates, those reserved for customers with the very best credit. This week those averages are at 9.24% for non-reward consumer cards and 11.88% for consumer cards with rewards.

Small business credit card rates also continue to fall. The average rate for non-reward business credit cards is 10.52%, down from 10.80% on May 2, while the average rate for reward business credit cards stands at 11.79%, down from 12.14% previously.

While credit card companies continue to offer students much higher rates than the general consumer market, the average student card rate is a bit less painful than usual, having fallen to 14.44% this week, down from 14.57% on May 2, and 14.84% last month.

Financial institutions represented in the survey include Advanta, American Express, Bank of America, Capital One, Chase, Citi, Discover, National City, Pulaski Bank, U.S. Bank, Washington Mutual, Wells Fargo and more.

May 15, 2008 By Seth Harbison

Toyota will launch a rewards credit card this October, reports The Detroit News, giving fans of their vehicles their first opportunity to earn points that lead to discounts on Toyota cars, trucks and SUVs.

According to the News article, the card’s reward formula will likely be similar to that of the card offered by Toyota’s Lexus division, which offers 1.5 points on most purchases and 5 points on purchases at Lexus dealerships. Holders of the Lexus credit card can use their points to pay for up to 10% of a new Lexus vehicle.

Automotive affinity cards are fairly common, with the GM Card probably the best known of the bunch. However, credit cards from Chrysler, Volkswagen, Subaru, Audi, BMW, MINI, Jeep, Dodge and Mercedes-Benz are also available, and some major credit card companies offer rewards programs that give points redeemable toward new and used vehicles across all manufacturers. For a complete list of these credit cards, see our Automotive Credit Cards list.

May 12, 2008 By Liz Morris

Universal Studios Theme Parks this morning announced the launch of the Universal American Express Card, which will allow cardholders to earn points toward Universal theme park tickets, annual park passes, vacation packages and other travel or cash / merchandise rewards.

Universal American Express Card holders will earn 2 points per dollar on gas and grocery purchases, as well as purchases at Universal theme parks. Cardholders will get 1 point per dollar on all other card purchases; the card can be used everywhere American Express is accepted.

The Universal American Express Card is being issued by GE Money. Universal previously had a card-issuing relationship with Chase, but chose to go elsewhere when that contract ended.

Applications for the Universal American Express Card are available at Universal Orlando or Universal Studios Hollywood, or you can apply online for the Universal American Express Card here.

May 5, 2008 By Justin McHenry

The Federal Reserve Board closed out last week by announcing a set of regulations that would end some of the most controversial practices used by credit card companies. The regulations, which could go into effect by the end of 2008, would:

• Prohibit credit card companies from raising rates on existing credit card balances, unless a payment is at least 30 days overdue
• Force card companies to give at least a 21-day “grace period” before payments are due
• Have customer payments allocated to higher-interest balances first
• Stop subprime credit cards from offering extremely small credit lines that are then mostly used up by the initial fees the card requires
• Make credit card companies disclose what credit factors influence their decisions when offers are made that include differing tiers for interest rates and credit lines
• Make customer payments received by 5PM on the due date considered to be “on time”, and/or, if card companies set due dates when mail is not delivered or business is not conducted, payments would be considered on time if received the next standard business day.

Predictably, consumer advocates generally applauded the proposals while credit card companies and industry associations equated them with price fixing. While the final regulations may differ somewhat from what was proposed Friday—more likely to be watered down than made stronger—it is likely that at least some of these consumer-friendly proposals will be in effect come 2009.

May 2, 2008

Credit card rate averages have again set a new two-year low, according to our IndexCreditCards.com Credit Card Monitor survey, falling even further than we had predicted last month. And, with the Federal Reserve cutting interest rates by a quarter-point this week, these averages figure to go down even a bit more in the coming weeks. (This week’s Fed cut is not factored into the averages listed here, as it takes some time for these cuts to be felt by credit card consumers.)

The average credit card rate for non-reward consumer credit cards fell to 12.59%, compared to 13.01% in early April. The average rate on credit cards with rewards fell to 14.38%, down from 14.97% last month.

The averages listed above attempt to take into account the multiple tiers that many credit card issuers offer, instead of accounting for only the lowest listed rates. However, IndexCreditCards.com also tracks the very lowest listed rates, those reserved for customers with the very best credit. This week those averages are at 9.43% for non-reward consumer cards and 11.98% for consumer cards with rewards.

Even students, who usually get the worst rates, don’t have it so bad right now. The average student credit card rate has fallen to 14.57%, down from 14.84% last month.

Business credit card rates are also falling, although more modestly. (On the other hand, business credit card rates aregenerally significantly lower than consumer card rates.) The average rate for non-reward business credit cards is 10.80%, down from 10.83%, and the average rate for reward business credit cards stands at 12.14%, down slightly from the 12.16% average of last month.

Financial institutions represented in the survey include Advanta, American Express, Bank of America, Capital One, Chase, Citi, Discover, National City, Pulaski Bank, U.S. Bank, Washington Mutual, Wells Fargo and more.