Credit card news digest — mid-February edition
Here’s a roundup of four of the most important recent stories concerning credit cards.
1. Citi dips toe in Chinese waters
Citi has become the first among all U.S. credit card companies to be authorized by Chinese banking authorities to issue its own plastic in the Asian nation, according to CNN Money. In the past, some American banks were allowed to issue cards, but only through joint ventures with local financial institutions.
Obviously, the Chinese credit card market is potentially enormous and already growing fast. And there could be enormous gains for those American companies that are among the first to exploit it. So it was with masterly understatement that Stephen Bird, CEO of Citi’s Asia Pacific unit, observed: “This approval represents a significant milestone in the continued expansion of Citi’s business in China, a priority market for Citi.”
2. Credit card debt still less of a problem
Regular readers will know this blogger’s concerns about possible long-term trends in credit card debt. However, the current situation remains good by historical standards, according to a Feb. 13 report from Collections & Credit Risk, a trade journal for the debt collection industry. It says that new data issued by Fitch Ratings shows that credit card companies are “charging off” (writing off uncollectible debt and passing it to collection agencies) at rates that are near “their lowest levels ever.”
Comparing December 2012 with the previous month, both charge-off and delinquency rates for bank credit cards fell yet further. The only fly in the ointment was private-label cards (store cards and similar). The charge-off rate for these inched up over that month.
3. There’s a hole in my wallet!
Google Wallet suffered a major embarrassment on Feb. 9 when it had to suspend services for those who had linked prepaid credit cards to their Wallet accounts, according to PC World. The problem was a hole in the security system.
Apparently, any tech-savvy thief who found or stole a device hosting Google Wallet could easily circumvent security measures and drain a prepaid card. Only those who had deployed a screen-activation PIN on their device remained safe, but many wouldn’t have done so as this means entering a PIN every time one wants to use one’s tablet or smartphone; for most, many times a day.
As has previously been observed on IndexCreditCards.com, Google Wallet’s early versions were and are less than perfect, and early adopters should expect improvements to be evolutionary. This glitch seems unlikely to put off enough potential users to undermine the offering, but it was the last thing Google needed.
4. Ordinary credit cards have their own security issues
Back to Collections & Credit Risk for the last story today. And it’s a reminder that you don’t have to have new technology to find your credit card account at risk.
Somebody managed to access card account details at merchants in upstate New York. Nobody’s officially saying which merchants were involved, but local media have fingered Rochester Gas and Electric Corp. and the New York State Electronic and Gas Corp.
In any event, Bank of America was sufficiently concerned by the breach that it issued new debit and credit cards to those of its customers who may have been affected.
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