An Outlook of the Credit Card and Banking Industry

Sep 15, 2015

In a bid to help consumers make prudent financial decision in the aftermath of the recent recession, two leading commercial websites WalletHub and CardHub have jointly released the Q2 2015 Credit Card and Banking Landscape Report.

As you would expect, the report touches on several areas of both credit card usage and banking trends leading up to the end of June 2015. Credit card offers typically fluctuate in value and change following the prevailing economic climate or issuer strategy. As credit card trends change, the report can give you a clear insight into the current state of affairs and allow you as a cardholder to make more informed decisions.

The banking sector too has been experiencing several changes, especially in the period after the recession. The Federal Reserve, for instance, is close to raising interest rates after close to seven years. This could significantly impact mall businesses. But, how? Again, this Report carries a lot of information for consumers to digest.

Insights from the report

The first thing noted is that credit card rates have held relatively stable recently except that APRs for users with fair credit went up 3.61% while those for those with excellent credit rose 1.47%. Also of note is that as cash continues to be perceived as more expensive compared to cards, card companies have increased cash advance fees by close to 60% since 2010.

Credit card initial reward bonuses also fell in value during the 2nd quarter of 2015 after a 40% rise over the past three years. Points/miles fell by a close to 3% (2.84% to be exact) while cash based bonuses fell by a whopping 5.09%. The takeaway here is that this is an excellent time to apply for a bonus as their value is still relatively high!

On the other end, complaints about “advertising and marketing” rose by 180% while complaints over rewards grew by 169%. Of those, 64% and 71% respectively were complaints directly pertaining to the U.S. Bank, the worst culprit in the report.

With regards to banking, the report indicates declining interest rates for deposit accounts. Rates for checking accounts fell by an impressive 6.03% over the 2nd quarter of 2015 while those for savings accounts fell by up to11.52% over the same period.

Even more important is the fact that personal online-only accounts provided the greatest returns, offering 61% greater returns than personal online checking accounts. Maybe a good reason to obtain a high risk merchant account for your online business, right?

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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