Card Delinquencies Hit a 16-Year High

Consumer credit delinquencies in the fourth quarter reached their highest levels since 1992, according to the American Bankers Association’s “Consumer Credit Delinquency Bulletin.” The composite ratio, which tracks eight closed-end installment loan categories, rose 21 basis points to 2.65 percent of all accounts in the fourth quarter (seasonally adjusted). All eight loan categories experienced increased delinquencies during the fourth quarter, a rare occurrence. The ABA report defines delinquency as late payments that are 30 days or more overdue. The weak housing market continues to be reflected in rising delinquency rates for home equity loans and lines of credit. Delinquencies for home equity lines of credit – the lowest delinquency rate category – rose 12 basis points to 0.96 percent.

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CARD ALLIANCE

Credit Saison and UC Card co have partnered with the S Korean
credit card firm, Shinhan Card co, intent on improving services. Given
the growing number of tourists traveling between Japan and South
Korea, the organizations collectively have expressed a need for this
alliance to provide travelers with extensive user features and benefits.
Statistics show nearly 30% of South Koreans who visit Japan are
Shinhan Card customers.

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CardWorks Processing Acquires Pay by Touch

UT-based Merrick Bank’s subsidiary CardWorks Processing has acquired the operating assets of Pay by Touch. The data processing assets being acquired are used by merchants to facilitate the acceptance of credit and debit cards through major payment networks, including VISA and MasterCard. Merrick Bank will also work with the major payment networks and appropriate regulatory authorities to ensure the continued integrity of the information security systems associated with the newly acquired data processing assets. Merrick Bank is an issuer of non-prime credit cards with more than $1 billion in assets.

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CONTIS & CREDECARD

Contis Group Limited has acquired credEcard, affording the latter
opportunity to thrive as a prepaid card company. With this acquisition,
complete as of March 31st, 2008 and the first by Contis, the acquiring
Company’s infamy will provide credEcard with increased chances for
global recognition. This is very important in the competitive global
prepaid card market. credEcard is a specialist in prepaid cards with
operations in the UK and India while Contis financial services provides
growth strategies to organizations throughout the card market.

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Barclays to Set-Up a Maine Call Facility

The new center will provide customer support for cardmembers who participate in the 60 co-branded credit card partnership programs offered by Barclays in the U.S. Barclays also operates a customer care center in Wilmington, Del. Barclaycard US has more than 60 partnerships with travel, entertainment, retail and financial institutions including US Airways, Lufthansa, Barnes & Noble, Best Western, BJ’s Wholesale Club, Travelocity and Carnival Cruise Lines.

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Fed Says Consumer Debt is a Time Bomb

MO-Based Federal Reserve of St Louis is cautioning too much of a shift toward consumer dependence on debt is leading to a growing number of personal bankruptcies during recent decades with its latest publication. The publication, the April edition of The Regional Economist, discloses statistics showing the percentage of families with debt was up between 1989 and 2004 by 4% to over 76%, with median value of the debt up by $33,000 to $55,000 during the same period, demonstrating Americans’ perspectives on consumer debt has much evolved. Furthermore, 56% of American families in 1989 owned at least one credit card, 75% had a card in 2004 while the total dollar amount of loans 90-days delinquent tripled between 1992 and 2006, according to the FDIC. The face of the demographic spending on these credit cards has also changed, with an increase in the number of single people, renters and lower income unskilled workers with less job seniority.

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WESTPAC & VIRGIN MONEY

Westpac has bought Virgin Money’s credit card portfolio for $39 million
meaning the two organizations will not be reinstating card agreements,
which are
up for renewal in May of 2008. For the 14 months following these
agreements,
the payment price will be distributed to Virgin Money, which will not
re-enter
the credit or debit card market for the time-being. Moreover, the
aforementioned
agreements between Virgin and Westpac concern the card jointly launched in
2003, providing low-interest to 800,000 cardholders for which Westpac
provided funds and back office administration.

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MasterCard and TJX Reach an Agreement

MasterCard has reached an agreement with TJX to offer an “Alternative Recovery Program” to MasterCard issuers affected by the previously announced data breach of TJX. The agreement calls for TJX to provide up to $24 million to support the program to settle claims made by issuers to recover costs and losses they claimed to have incurred in connection with the breach. Issuers must have previously filed claims and agree to the “Alternative Recovery Program’s” terms to be eligible for compensation funded by the agreement. The agreement is contingent upon the acceptance of issuing financial institutions representing at least 90% of the claimed-on MasterCard accounts.

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BalanceTransfers.com Launched by Finance Globe

Finance Globe has introduced “BalanceTransfers.com”, website to evaluate credit card rates and features such as reward programs. BalanceTransfers.com features a carefully selected array of cards designed to appeal to both business and personal users. Browsers who select cards for their low percentage rates on balance transfers may find the cards offer solid rewards on new purchases as well. BalanceTransfers.com has developed two features for people looking for low interest credit cards that include unique credit card calculator will help people figure out how much they will save by transferring to a credit card with a balance transfer deal and a credit education section presents a series of informative columns addressing every aspect of building and maintaining a good credit rating.

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AmEx and Consumer Action Team for Education

American Express and CA-based Consumer Action are reaching out to consumers with ” Credit Cards: What You Need to Know” financial literacy program. April is Financial Literacy Month and American Express and Consumer Action are kicking off the third year of their joint “Credit Cards: What You Need to Know” program that began in 2005 in an effort to encourage consumers to make responsible decisions when choosing and using credit cards. The program relies on a unique “train-the-trainer” approach in which American Express and Consumer Action provide curricula, information and instructional material to community and consumer advocacy leaders for use in educating area residents. Consumer Action and American Express have provided nearly 250,000 publications in five languages: English, Spanish, Chinese, Korean and Vietnamese.Non-profit advocacy agency Consumer Action has been conducting surveys of credit card rates and terms since the 1980s, to track trends in the industry and assist consumers in comparing cards and understanding their rights when using credit.

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Pemco Technologies Lands UT & OR CU Card Deals

WA-based Pemco Technologies has announced it will provide credit and debit processing services for the Utah-based Goldenwest Credit Union and will provide credit processing services for Oregon Employees Federal Credit Union (OEFCU). Goldenwest was established in 1936 and OEFCU was founded in 1964, both intent on providing members with financial services such as bank accounts, retirement accounts, consumer loans, real estate loans, credit cards, debit cards and online financial services. Pemco Technologies provides such payment solutions for banks as card processing, PIN-based processing and ATM services. The Goldenwest Credit Union has assets of over $600 million and nearly 69,000 members while the Oregon-based OEFCU has assets of $84.5 million and more than 9,500 members.

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