This Week In Credit Card News: Crypto’s Threat To Card Networks; Should Personal Finance Be Required In School?

67% Say Personal Finance Should Be Required in High School

A mid-February survey reveals that over two-thirds of respondents believe that a personal finance course should be a requirement to graduate from high school. On top of that number, another 26% say it should at least be offered as a high school elective. According to Next Gen Personal Finance, 21 states require at least some personal finance instruction as part of their high school curriculum, but only 10 states require a semester-long personal finance class for graduation. The survey also shows that most young adults don’t get their first credit card under parental guidance. Over 56% of survey respondents got their first credit card on their own either during college or after they graduated from high school. [US News & World Report]

This Is Why Visa, Mastercard, and American Express Are in Trouble

When we swipe those cards, credit card transactions cost merchants nearly 3% just to be completed. And even then, it can take days for the money to be deposited into their bank accounts. This is a direct cost that comes out of their bottom line, and most merchants have little choice in the matter. In just the last month, there’s been an advance on the Solana blockchain that could almost eliminate most of those credit card fees and replace them with blockchain transactions. Cryptocurrencies have long been discussed as a new way to make financial transactions, but most cryptocurrencies have high costs that make little sense for traditional transactions. Solana’s blockchain is different because it enables transactions that can be completed in just a few seconds for a fraction of a penny. No more days of waiting; merchants can be paid almost immediately. [The Motley Fool]

Surging Use of Crypto Cards Warns Banks of a New Payments Disruption

Account openings of crypto-backed cards are outpacing traditional cards in the UK. Using Visa and Mastercard as the rails, several crypto platforms now enable consumers to make everyday purchases with cryptocurrency. Analysts say it’s a crucial step to making crypto a mainstream form of payment. While using cryptocurrency to make everyday purchases seemed like a far-fetched idea just a few years ago, it’s now a reality and several steps closer to becoming routine. Until recently, consumers could only spend crypto at a handful of niche cafes or extract cash at ATMs. Yet the tremendous growth in crypto wallets and interest in cryptocurrencies in general has led many to look to plastic to open new doors and support transactions. [The Financial Brand]

Citi is the First Mega Bank to Kill Overdraft Fees

Citigroup is saying goodbye to overdraft fees, making it the biggest US bank to pledge to eliminate the controversial charges. By this summer, Citi plans to get rid of overdraft fees, non-sufficient funds fees and overdraft protection fees. The changes mean Citi will be the only one among the top five US retail banks by assets to abolish the fees that many Americans despise, and that consumer advocates say unfairly punish society’s most vulnerable. Citi joins a growing list of lenders making changes or outright eliminating overdraft fees amid pressure from lawmakers in Congress and growing competition from online rivals. [CNN]

Senators Ask JPMorgan Chase to Explain Its Lawsuit Blitz Against Credit Card Customers

Saying they were “deeply troubled by recent reports” that JPMorgan Chase has “renewed its predatory practice of robo-signing,” six Senate Democrats asked Jamie Dimon, the company’s CEO, to provide “detailed information regarding the bank’s credit card debt collection practices.” The letter, signed by five members of the Senate Banking Committee and its chairman, Sen. Sherrod Brown of Ohio, cited an article by ProPublica and The Capitol Forum that revealed how Chase had launched an ongoing lawsuit blitz against indebted credit card customers when the pandemic began battering the economy in early 2020. Chase had stopped pursuing credit card lawsuits nearly a decade ago when regulators found that the bank’s legal paperwork was often faulty. [The Capitol Forum]

Bank of America, Capital One Rake in Billions While Denying Customers Covid Hardship Relief

Two class action lawsuits against Bank of America and Capital One have been filed over the banks’ continued assessment of late fees and interest charges despite their promises of hardship relief throughout the coronavirus pandemic. The two plaintiffs say they were denied meaningful forms of financial assistance when they became unable to make their credit card payments in the pandemic. Meanwhile, the banks raked in billions of dollars in revenue, according to court documents. The banks are each accused of unjust enrichment, breaching the covenant of good faith and fair dealing and violating California consumer protection laws. [Top Class Actions]

Warren Buffett Doubles Down on Brazilian Fintech Nubank with $1 Billion Stake

After cutting a $500 million check for leading Latin American fintech Nubank in 2021, the Oracle of Omaha has increased his stake in the business to $1 billion. Berkshire Hathaway first invested as part of Nubank’s Series G funding round last June, and was handsomely rewarded during the fintech’s IPO with gains to the tune of $150 million. NuBank’s share price leapt nearly 12% as a result of Buffett’s increased backing, while the US investor also disclosed that he had sold off his $1.8 billion stake in Visa and $1.3 billion stake in Mastercard. The shifting investments clearly show Buffett’s desire to increase his exposure to fintech, while reducing his stake in more ‘traditional’ financial firms. [AltFi]

Klarna to Provide Physical Payment Card in U.S.

Klarna is opening the waitlist for its Klarna Card payment card to U.S. consumers. A physical Visa card issued by WebBank, the Klarna Card will make the global retail bank, payments and shopping service’s “pay in 4” buy now, pay later service available for any in-store or online purchase. The Klarna Card will offer U.S. consumers the same installment payment experience they receive when making purchases in physical stores that they get when using the Klarna digital Pay in 4 solution at a retailer’s checkout or in the Klarna app. The new card will offer a bi-weekly repayment schedule and real-time credit checks. [Chain Store Age]

Amex Tightens Delta Relationship by Bringing BNPL Offering to its Checkout

American Express made its card-based buy now, pay later (BNPL) feature, Plan It, available at checkout on Delta Air Lines’ website. Plan it, which launched in 2017, lets Amex cardholders retroactively split transactions over $100 into monthly installments for a fixed fee. It’s been a successful BNPL contender: The volume of Plan It plans originated in Q4 2021 more than doubled compared with Q4 2020, according to the issuer. Travel spending is picking back up, and payment providers have an opportunity to sweep up volume as demand for BNPL services in the sector grows. [Business Insider]

Scammers Stole 70% More Money from Americans Last Year Than in 2020

The Federal Trade Commission released new numbers Tuesday showing that Americans lodged nearly 6 million fraud and scam complaints last year, accounting for a record-high amount of financial loss. In 2021, 5.7 million people filed reports and described losing more than $5.8 billion to fraud, a $2.4 billion jump in losses in one year. The amount of money Americans lost to scammers in 2021 increased 70% from the year prior, with a median loss of $500 per person. In 2020, Americans reported a loss of more than $3.4 billion: another historically high number. [Money]

Credit Card Ownership and Usage Statistics

More than 80% of American adults had at least one credit card in 2020. The average American has 3.84 credit cards. The average American household’s credit card balance is just over $5,300. Paying with a credit card has increased in popularity, from 24% of transactions in 2019 to 27% in 2020. 41% U.S. adults listed cash back as their favorite credit card feature. Experian found Baby Boomers tend to have more credit cards than younger generations. In addition to longer credit histories, older consumers generally have higher credit scores than younger consumers, giving them access to a wider range of credit cards. [Bankrate]

Russia’s Attack on Ukraine Has Sent Cryptocurrency Prices Tumbling

As the world woke up to Russia’s long-expected invasion of Ukraine, the reverberations caused by the event was causing a disastrous impact on the prices of Bitcoin, Ethereum, and nearly every other major cryptocurrency. As of mid-morning, Bitcoin was down nearly 8% over 24 hours, which actually represented a slight rebound from where it spent most of the overnight hours. Alongside it, Ethereum dropped as much as 10% in early morning trading, with many other coins following suit. In fact, every cryptocurrency with an individual price above $3.00 was trending sharply downward by 10am ET. [ZD Net]