Medical Debt Soon Will Be Banned on Credit Reports
Americans won’t have to worry about unpaid medical bills damaging their credit reports and scores much longer. The Biden administration is finalizing a rule Tuesday that will end the inclusion of medical debt on credit reports and ban lenders from using certain medical information in loan decisions. The rule will also remove an estimated $49 billion in medical bills from the credit reports of about 15 million people. [CNN]
U.S. Consumer Borrowing Growth Slows on Drop in Revolving Credit
Outstanding credit card and other revolving debt decreased $13.7 billion, the most since early in the pandemic, after surging a month earlier. Non-revolving credit, such as loans for vehicle purchases and school tuition, increased $6.2 billion, the Fed’s report showed. The data suggest consumers are making an effort to pay down credit card balances as borrowing rates remain near a record well above 20%. Americans have relied more on credit in recent years to help support spending amid persistent inflation. [Bloomberg]
Nearly Half of Credit Card Users Are Carrying Debt. It May Take Months, or Years, to Pay Off
Many Americans are starting 2025 a little worse off than before, at least when it comes to credit card debt. Almost half of cardholders, 48%, now carry debt from month to month, according to a new report by Bankrate. That’s up from 44% at the start of 2024. Of those carrying balances, 53% have been in debt for at least a year. Roughly 47% of borrowers said they carry a balance due to an unexpected or emergency expense, most commonly medical bills or car and home repairs. Others cite higher day-to-day expenses and general overspending. [CNBC]
U.S. Consumer Watchdog Sues Experian Over Consumer Credit Accuracy
The CFPB sued credit rating giant Experian, saying the company failed American consumers who challenge the accuracy of consumer credit files. Through a California subsidiary, the Ireland-based global data broker maintains crucial files on most American families but allegedly mishandles their complaints, damaging household finances in the process. Experian conducts “sham investigations” into consumer disputes and allows deleted false information to be reinserted into credit files, according to the CFPB. [Reuters]
Capital One and Discover Merger Could Cause Payment Roadblocks for U.S. Travelers
Consumers accustomed to swiping their Capital One cards during overseas travels could face issues once the credit card giant transitions its network to Discover. Currently, Capital One’s card payments are processed on networks operated by Visa and Mastercard. After the acquisition of Discover was approved in December by the Office of the Delaware State Bank Commissioner, Capital One said it plans to move its payments processing to Discover’s rails. This change is unlikely to have a significant impact in the U.S., where Discover’s network is nearly as ubiquitous as Visa, Mastercard, and American Express. However, Discover is far less common outside the U.S, potentially causing payment processing issues for U.S. travelers using Capital One cards abroad. [Payments Journal]
PayPal Dominates Mobile Payments in the U.S.
PayPal is the most popular mobile payment app that U.S. adults typically use, with over twice as many users as the next most popular choice, Venmo, according to November 2024 data from YouGov. There will be 91.5 million core PayPal users in the U.S. this year, nearly a third (32.0%) of the population. [eMarketer]
The Fight Over Credit Card Swipe Fees Enters a New Year with No End in Sight
Merchants have long shouldered these “swipe fees,” the catchall term for businesses’ payments to banks and card companies each time customers swipe. While a federal rule caps debit card swipe fees at 21 cents per transaction, those for credit cards can be much higher. And as many shoppers ditched cash for plastic cards or mobile payment apps, businesses have seen credit card transactions swell. They made up 32% of all U.S. consumer payments in 2023, up from 24% in 2019, according to a Federal Reserve study. Cash shrunk its share to 16% over the same period, down from 26%. Spending on American Express, Discover, Mastercard and Visa cards in the U.S. soared to $5.25 trillion in the first half of 2024, up from around $4.98 trillion during the same period in 2023, according to data provided to NBC News by the Nilson Report, which covers the payments industry. [NBC News]
Research Suggests Those Who Use Buy-Now-Pay-Later Services End Up Spending More
BNPL credit allows consumers to split their purchases into smaller, interest-free instalments. It is often directly integrated into online checkouts with fast approval, making it easy to purchase something instantly and spread the cost over coming months. There are some obvious risks. Many BNPL providers charge less visible fees, such as late payment fees and account maintenance fees. In many countries, the BNPL sector is also less regulated than traditional credit. But does it also change our spending habits? Our recent research uncovered a concerning insight: consumers who use BNPL services end up spending more money online than those who don’t. This effect is particularly strong among younger shoppers and those with lower incomes. [The Conversation]
More Companies Are Betting on Bitcoin
By one estimate, more than 70 publicly traded companies now invest in Bitcoin, including several that started buying it as Mr. Trump promoted crypto last year. Many of those companies work directly in the crypto industry, like Coinbase, the prominent U.S. exchange. But the group is widening. Rumble, the conservative-leaning social media firm, announced in November that it was planning to spend up to $20 million on Bitcoin. Other firms that have bought the asset include a medical technology supplier, a cannabis grower and Tesla, Elon Musk’s electric vehicle manufacturer. [The New York Times]
TransUnion Set to Acquire Credit Prequalification Firm Monevo
TransUnion says it plans to acquire British credit prequalification/distribution platform Monevo. The credit reporting agency announced the deal Wednesday (Jan. 8), noting that it already owned 30% of Monevo’s equity after purchasing a minority stake in 2021. Monevo lets comparison websites and other online brands embed “highly personalized credit offers,” chiefly in the British and American markets, working with over 150 banks and credit providers worldwide. The goal is to let lenders and publishers offer better outcomes for consumers searching for credit online. [PYMNTS]
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