Quantitative Easing

Inflation leads to record number of new accounts, more overdraft fees

To cope with record inflation, Americans have opened a record number of credit cards

As Americans grapple with the highest inflation in 40 years, the number of new credit cards has surged as more Americans rely on them to weather high prices. According to a recent Federal Reserve report, revolving credit (credit cards and lines of credit) grew 19.6% year over year to $1.103 billion. According to an Equifax survey, Americans received 11.5 million new bank credit cards through February 2022. This is a 31.4% increase from the previous year. The total limits for these credit cards were $55.5 billion, an increase of 59.2% over the previous year. Total credit limits now stand at $4.12 trillion, $224 billion above the pre-pandemic level. [USA Today]

Don’t be fooled at the gas pump by new Visa and Mastercard policies

Gas prices aren’t the only thing going up when you pay at the pumps in the summer of 2022. Thanks to new Visa and Mastercard policies, temporary financial holds on the debit or credit cards you use to pay for gasoline are also enabled. the increase, up to 40%. The new limit is $175. While these funds don’t actually leave your account, the hold can cause you problems with overdraft fees on a debit card or impact spending limits on a credit card. [Clark.com]

Lawmakers push Visa and Mastercard to do more to fight consumer fraud

Lawmakers are criticizing Visa and Mastercard for their hands-off approach to ending consumer fraud on their networks and have raised the possibility of legislative action. The survey found that while Mastercard and Visa closely track companies that have been flagged for lying to customers, lying to banks and breaking the law, they rarely cut those companies. Instead, card networks continue to facilitate business transactions and collect a percentage of each sale. Visa and Mastercard say it is the responsibility of banks to take direct action against fraudsters, rarely using the tools at their disposal to prevent harm to consumers. But lawmakers say that’s not good enough. [Buzz Feed News]

Here’s why the CFPB is concerned about credit card late fees

The Consumer Financial Protection Bureau has announced it is reviewing the fees credit card companies charge consumers for late payments, specifically to determine whether those late fees are “reasonable and commensurate” with the amount people owe. . The CFPB is looking at this now because credit card companies can change their late fees with inflation, and given recent inflation, they have some concerns.

Current rules governing credit card late fees date back to 2009. In the wake of the financial crisis, Congress was looking for ways to prevent people from going too deeply into debt. In 2010, the Federal Reserve put a $25 limit on late fees. But it also allowed credit card companies to adjust these fees each year, based on the consumer price index. [Marketplace]

Why This Crypto Crash Is Different

Driven by war and the pandemic, a new macroeconomic paradigm is forming. High inflation is back after 30 years of absence, and with it, a much more restrictive monetary policy. Interest rates are rising and central banks around the world are burning money. The era of abundant dollars is coming to an end. And that will mean consistently lower prices for cryptocurrencies. Crypto markets have never known anything but easy money. Bitcoin was born in the aftermath of the 2008 financial crisis, when many feared that central banks’ experiment with ultra-low interest rates and quantitative easing would cause runaway inflation. Ten years later, interest rates were still well below pre-financial crisis levels and central bank balance sheets were still massively bloated. And the runaway inflation predicted by bitcoiners had not materialized. Instead, asset prices had risen dramatically, including cryptocurrency prices, as investors desperate for yield piled into bitcoin and other cryptocurrencies. [Coin Desk]

Meta launches Meta Pay, a digital wallet dedicated to the metaverse

Meta tries to solve the problem of transaction and value interactions in the metaverse. The company has announced the launch of a new digital wallet that will support users’ economy in the next iteration of Meta’s metaverse. The wallet, dubbed Meta Pay, will be an evolution of what is now known as Facebook Pay, still supporting the range of payments it currently handles, but with a new focus on digital identity and proof. of property. According to Meta (formerly Facebook) CEO Mark Zuckerberg, Meta Pay will be a solution to two metaverse problems: accessibility to digital goods and proof of ownership. [Bitcoin.com]

Like Klarna and Affirm Falter, a new breed of “buy now, pay later” startups are stealing the show

With the hype surrounding the “buy now, pay later” trend fading, some investors are betting they’ve found the next big thing. Buy now, pay later Companies like Klarna and Affirm, which allow shoppers to defer payments to a later date or split purchases into interest-free installments, are under immense pressure as consumers become more wary expense due to the rising cost of living, and as higher interest rates drive up borrowing costs. They also face increased competition, with tech giant Apple entering the ring with its own BNPL offering. But venture capitalists are betting that a new breed of European startups will be the real winners in the space. Companies like Mondu, Hokodo and Billie have raised heaps of money from investors with a simple pitch: businesses, not consumers, are a more lucrative clientele for the “buy now, pay later” trend. [CNBC]

Wells Fargo launches new rewards credit card

Wells Fargo has announced a new rewards credit card, the Autograph Credit Card. The new card will offer 3 points per dollar on six different daily spend categories, similar to what the discontinued Wells Fargo Propel credit card offered before it was shut down last year. The map is expected to be available for new apps on July 13. New cardholders will also be able to enjoy a welcome bonus and a 0% APR introductory promotion. [Investopedia]

Grubhub, Amazon and other gift cards will get a 25% bonus on Prime Day

There will be a ton of deals to shop during Amazon Prime Days, from electronics and beauty to Amazon’s own devices, some of which are already discounted. A ton of gift cards that will be discounted by up to 25%. There’s also a great deal for Prime members who buy Amazon gift cards. Prime members will receive $12.50 promotional credit with a $50 Amazon Gift Card purchase, meaning you’ll accrue savings on your next fast-shipping order. Only one promotional credit is allowed per primary Prime email address. [SF Gate]