A national consumer advocacy group has called MBNA a hypocrite for publicly endorsing efforts by a number of state policymakers to place caps on the fees credit counseling agencies charge. Consumers for Responsible Credit Solutions says MBNA receives a sizeable portion of its own profits from high over-the-limit and late payment fees, which are far less reasonable, and in most cases, far more burdensome for consumers than credit counseling fees. CRCS says that in many cases, credit card fees are a significant share of the debt burden driving people to seek credit counseling in the first place. The group says that establishing such caps could backfire and hurt the very consumers they are intended to help. A recent CRCS report found that although fee caps are proposed as a pro-consumer measure, they really work to strengthen creditor control of the industry and work against the interests of consumers. Lawmakers in a number of states have proposed fee caps on credit counseling services, some as low as $20 for an initial set-up fee and no more than $20 per month to provide debt management services.Details
VISA has launched three new TV commercials for the “Olympics” touting the benefits of its “VISA Signature” card. The new ads feature the “Signature Song” of Frank Sinatra. Each of three spots highlights the advantages of “VISA Signature.” One ad promotes access to the hottest restaurants, while another promotes VIP treatment at “signature” resorts. The third spot highlights access to Pebble Beach golf. The new ads are part of a cross-media campaign (including Internet and print) spotlighting “VISA Signature” to the affluent cardholder. The campaign was launched in July at select airports and restaurants and followed this month with print, television and radio advertising. The six-year old “Signature” credit/charge card has produced approximately $80 billion in transaction volume. VISA says the “Signature” card program represents less than 3% of VISA cards in U.S. circulation, but accounts for 17% of VISA USA’s total credit volume. To view the new ads visit CardWatchÂ® ([www.cardwatch.com]). (CF Library 7/12/04)
CT-based Evolution Benefits, producers of the “Benny” benefits debit card, announced that Conning Capital Partners will co-led an $18.5 million investment in the firm. Evolution Benefit’s Benny Card allows employees to access flexible spending accounts, health reimbursement accounts, and new health savings accounts. Conning’s experience in the healthcare and financial services industries will serve as valuable expertise for Evolution Benefits as they continue to grow.Details
Household International reported that its net income rose 8.4% to $395 million during the second quarter. However, its VISA and MasterCard portfolio, which makes up 17% of the Company’s total managed receivables, has been contracting so far this year, after peaking at $21.1 billion in the fourth quarter of 2003. Household posted a sharp uptick in charge-offs for its bank credit cards during the second quarter, while delinquency edged down. VISA and MasterCard charge-offs hit 7.62% during 2Q/04, compared to 7.08% in the prior quarter, and 7.90% one-year ago. VISA and MasterCard delinquency, 60+ days, dropped to 4.21%, compared to 4.35% in the first quarter, and 4.19% for 2Q/03. Household, which issues the General Motors MasterCard, the Union Privilege cards, and the Orchard Bank sub-prime MasterCard, has experienced a 6% increase in bank credit card outstandings, from $19 billion one-year ago to $20.2 billion in the 2Q/04. Household also holds $17.5 billion in private label credit card outstandings. Private label delinquency (60+ days) declined to 4.81% in the second quarter, compared to 4.98% in the first quarter, and 5.16% for 2Q/03. Private label charge-offs also dipped to 4.92%, compared to 5.06% in the previous quarter, and 6.26% one-year ago. For complete details on Household’s second quarter performance, visit CardData (www.carddata.com).
HOUSEHOLD VISA/MC SNAPSHOT
Outstandings Delinquency* Charge-Offs
2Q/03 $19.0b 4.19% 7.90%
3Q/03 $19.8b 4.29% 7.12%
4Q/03 $21.1b 4.16% 7.03%
1Q/04 $20.3b 4.35% 7.08%
2Q/04 $20.2b 4.21% 7.62%
* 60+ days delinquency
Source: CardData (www.carddata.com)
ABN AMRO has launched the first credit card designed
exclusively for women in the UAE. The new “Al Ameera MasterCard” is issued as a primary card to women and offers a rewards program redeemable at partner outlets of specific interest to women. Partners include Damas, Red Earth, Toni & Guy, Calvin Klein as well as numerous cafes, health spas and beauty salons. ABN AMRO also plans to offer
“Al Ameera” cardholders VIP invitations to special events and occasions in the near future. The card is available from ABN AMRO’s UAE branches and is open only to women residing in the Emirates.
Target yesterday reported that its second quarter pre-tax credit card profits increased to $120 million, a 12% gain compared to one-year ago. However, the results exclude its Mervyn’s and Marshall Field’s card portfolios, which contributed about $50 million quarterly in credit card income. GE Consumer Finance is buying the Mervyn’s portfolio and The May Department Store Company purchased the Marshall Field’s business. Target reported that its total credit card receivables, which include its VISA and “Guest” cards, were $4.7 billion as of July 31st. Delinquency (90 days+) for 2Q/04 was 3.8% compared to 4.1% one-year ago. Target’s credit card unit had revenues of $256 million, a 3.9% increase over 2Q/03. Expenses for the card unit declined 1.1% to $173 million. For complete details on Target’s latest performance visit CardData ([www.carddata.com]).
iBill has beefed-up its “Commerce Management Interface”. iBill’s Web-based software platform and account management tool has been completely re-written in ASP.net. The “CMI” security module has also been completely revamped, allowing merchants to use a single password for all iBill applications instead of several passwords that are application specific. In addition, Web merchants can now configure their “CMI” account to receive an electronic posting to their own internal reporting system, notifying them of a consumer sign-up, cancellation, refund, revoke, chargeback or rebill.Details
MasterCard has launched a special Web site for the merchant community, providing insight into its rules manual. MasterCard also announced that it has expanded it “Priceless” ad campaign to spotlight merchant partners. The new “MasterCard Merchant Rules Manual” includes rules covering a wide range of topics relevant to merchants, such as the steps that a merchant must follow to complete a sale, how MasterCard transactions are processed, and programs that MasterCard has put in place to reduce fraud. Regional variations of these rules are also included in the manual. MasterCard is also communicating to merchants that its credit and debit interchange program rates for the U.S. are now being established solely by MasterCard management, with no Board participation. The print ads, developed by McCann Erickson/New York, will debut with a number of high-profile national merchants, including Banana Republic, The Gap, Kmart, Pier 1, Travelocity, RadioShack, Shell and Williams-Sonoma.Details
Homestore’s Welcome Wagon has joined the American Express “Business Savings Program”.Through the program, businesses that accept the American Express Card will be given preferred pricing for advertising in Welcome Wagon’s Address Book, which is delivered to more than two million new homeowners each year, as well as Pinpoint Mail, a personalized postcard product that can be targeted to a specific audience. Business Savings from American Express is offered at no cost to any and all merchants in the American Express network across the United States, regardless of size or location. There is no enrollment process; merchants can access the many expense savings offerings through or by calling the toll-free numbers provided by the partners.Details
Philadelphia-based Sovereign Bancorp has signed an agent bank agreement with MBNA for consumer cards, student cards, and small business cards. As part of the agreement, cards will be marketed under the Sovereign Bank brand name, and MBNA will own and service the loans and provide all the administrative support for the program. Cards will be marketed in Sovereign Bank branch locations, as well as via phone and through Sovereign Bank’s Web site, . Benefits of the Sovereign Bank Visa and MasterCard credit cards include no annual fee, the highest credit lines in the industry, a low introductory annual percentage rate and MBNA’s world-class customer service, 24 hours a day, seven days a week. The Sovereign Bank Platinum Plus Visa and MasterCard credit cards will include MBNA’s dynamic WorldPoints rewards program, under which cardholders earn points for every purchase made with the card, and can redeem points for airline travel, merchandise or cash.Details
FSA debit card specialist, MBI, has formed a partnership with McNeil Consumer & Specialty Pharmaceuticals to educate consumers on the advantages of enrolling in healthcare flexible spending account programs.A benefit offered by a rapidly growing number of employers, FSAs allow consumers to use pre-tax dollars for select healthcare expenses, including over-the-counter drugs. Nearly 12,000 employers now offer MBI benefit debit cards to their employees, including Fortune 500 companies such as Disney, Staples, Citigroup and Toshiba. Today, there are nearly one million cardholders, and the company expects to reach 2 million cardholder accounts over the next seven months.Details