Americans Struggle with Record Credit Card Debt
U.S. credit card debt reached a record $1.17 trillion in the third quarter of 2024, growing from $770 billion in the first quarter of 2021 and the share of active credit card holders making just minimum payments rose to 10.75%, the highest percentage ever in data going back to 2012. [The Guardian]
Americans’ Eager Holiday Shopping Didn’t Bring a Surge in Debt
The number of consumers struggling to pay off their credit card bills remains elevated. Delinquencies, particularly on credit cards, remained at high levels during the fourth quarter of 2024, according to the Federal Reserve Bank of New York’s Quarterly Report released Thursday. Last quarter, about 7.2% of credit card accounts shifted into 90 days overdue, referred to as serious delinquency. That is much higher than before the pandemic and was up from the 6.36% pace reported in the third quarter. About 11.4% of credit card balance were at least 90 days delinquent in the fourth quarter, the highest rate since 2011. Still, growth in the number of credit card delinquencies has leveled off some from the rapid pace in 2023 and most of 2024. New York Fed researchers on Thursday said the credit card delinquency rate could be characterized as stabilizing. [Barron’s]
Affirm Plans to Bring Buy Now, Pay Later Debit Cards to More Users Through Deal with FIS
Affirm, which pioneered the buy now, pay later business, has partnered with FIS in a deal that will allow the fintech company to offer the pay-over-time service to its banking clients and their millions of individual customers. Any bank that partners with FIS will be able to provide its own version of the Affirm Card, which launched in 2021, without asking customers to adopt a new piece of plastic. Consumers can access Affirm’s biweekly and monthly installment plans and have the money automatically deducted from their checking account. [CNBC]
MasterCard Tokenized 30% of Transactions in 2024
MasterCard has announced that it tokenized 30% of its transactions in 2024, marking a major step in its efforts to integrate digital assets into its payment services. The company also said that it collaborated with multiple crypto platforms to allow consumers to purchase cryptocurrencies using their cards and spend them wherever MasterCard is accepted. In addition, the company acknowledged the growing influence of stablecoins and other cryptocurrencies as key competitors in the payments industry. It pointed out that as regulation around crypto continues to evolve, digital assets like stablecoins could see increased adoption due to their accessibility, immutability, and efficiency. [Crypto News]
Juniper Forecasts 50% Growth in QR Mobile Payment Transactions
Mobile payments made via QR codes will grow in value by 50%, from $5.4 trillion in 2025 to more than $8 trillion in 2029, Juniper Research predicts. The two primary factors driving the sustained appeal of QR codes are lower operational costs and universal compatibility, the analysts say, while the standardisation of national QR schemes and Account-to-Account payment initiatives “will be a key factor in driving the adoption of QR code payments”. However, “despite this growth, Apple’s opening up of third-party near-field Communication access will increase competition, as consumers will have wider access to NFC-based options.” [NFCW]
JPMorgan Adds Buy-Now, Pay-Later Provider Klarna to Its Payments Platform
JP Morgan Chase’s payments processing unit is partnering with fintech Klarna to expand buy now, pay later options for its merchants. JPMorgan Payments will provide some 900,000 businesses the ability to offer Klarna’s fast-credit options to their customers. It means Klarna, which is targeting a US initial public offering this year, will be available through the world’s largest merchant acquirer, which processes $2 trillion payments a year. [Bloomberg]
Cap One, Discover Expect Nerger Completion Delay
Discover said it now expects to finalize its proposed merger with Capital One by May 19, three months later than originally planned as the companies wait on regulators to give the deal a green light, according to a regulatory filing Monday. Initially, they expected to consummate the transaction by February 19, according to the merger agreement filed with the Securities and Exchange Commission last year. The credit card network also provided an update about ongoing lawsuits seeking to derail the merger in the latest SEC filing, though it considers those cases meritless. The deal is the subject of three lawsuits seeking to block the companies from merging on the grounds that the acquisition would harm consumers by giving them fewer options, according to Discover’s filing. [Payments Dive]
Visa and Fold to Launch Credit Card Offering Bitcoin Rewards
Visa and Fold partnered to launch a credit card that offers bitcoin rewards. The new Fold Bitcoin Rewards Credit Card will join the debit card products already offered by Fold, which is a bitcoin rewards and financial services platform. The Fold Bitcoin Rewards Credit Card will offer up to 2% unlimited bitcoin rewards and up to $250 in bonuses. The card will also provide cardholders with access to bitcoin trading with no fees, insured bitcoin custody, FDIC-insured transactional accounts and bonus offers from merchants. [PYMNTS]
Zelle Payments Top $1 Trillion in 2024 as Network’s Growth Outpaces Rivals Including PayPal
Zelle, the payments network run by banks-owned Early Warning Services, crossed $1 trillion in total volumes last year, which it said was the most ever for a peer-to-peer platform. The firm said Wednesday that its user base jumped 12% to 151 million accounts in 2024, and that the total dollars sent on the platform jumped 27% from the year earlier. Zelle, which was launched in 2017 in response to fintech platforms such as Venmo, PayPal and CashApp, has some key advantages over those players. EWS is owned by seven of the biggest U.S. banks, including JPMorgan Chase, Bank of America and Wells Fargo, and Zelle allows for instant money transfers made within the apps of thousands of member institutions. Its growth rate last year exceeded that of PayPal, which reported that total P2P payments volumes reached more than $400 billion. [CNBC]
Protect Yourself from Tax Return Identity Theft
Some forms of identity theft are relatively easy to deal with, such as stolen credit card numbers. But it’s a nightmare to unravel tax refund theft if an imposter grabs your Social Security number and files a return in your name. Hundreds of thousands of Americans become victims of tax-related identity theft each year, “typically through no fault of their own,” according to the Taxpayer Advocate Service (TAS) at the IRS. TAS called it one of the “most serious problems” faced by taxpayers in 2023 and 2024. In fact, the IRS saw more than a three-fold increase in tax identity theft following the pandemic, as fraudsters targeted pandemic-related benefits. [Consumers’ Checkbook]
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