Monthly Archives: February 2016

2016
02/24

Category:
Credit Cards

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Banks exchange 1000s of credit cards after hack attack

In total around 85,000 customers have had their MasterCard or Visa credit cards exchanged over the past few weeks, with the banks saying it is a purely precautionary measure.

Hackers broke into a weak spot in the security systems of the banks through an accounting firm in western Germany, the Berliner Zeitung reports.

Postbank, Commerbank, and Landesbank Berlin, which owns Berliner Sparkasse, were all affected.

Worst hit was Postbank which has had to exchange 55,000 cards. Sparkasse and Commerzbank have each sent out 15,000 new cards to customers.

A spokesperson for Postbank told The Local that the security risk had hit customers across Germany, but that the measure was a purely precautionary one.

“While the number of 55,000 may sound high, one should remember that we have given out a total of 1.6 million credit cards to our customers,” she said.

Affected customers would be informed by post she said, “but this does not mean that their old cards have been misused.”

Postbank could not confirm whether money had in fact been stolen from any of its customers but said that, in the case that this has taken place “customers would of course be compensated after a careful investigation of their complaint.”

Sparkasse customers received an email which said “We believe that someone has had access to your credit card data. That can for example occur during a payment process.”

But a spokesperson for the bank reassured customers that the exchange of cards was purely a precautionary measure.

“As soon as our early detection mechanisms receive indications [of suspicious activity], threatened cards are blocked and exchanged,” Konstanze Stempel told the Berliner Zeitung.

2016
02/24

Category:
Credit Ratings

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S&P Takes Ratings Actions on Genworth Financial (GNW), Operating Units; Places on CreditWatch Negative

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Standard Poors Ratings Services said today that it lowered its financial strength ratings on Genworth Life Insurance Co. (GLIC), Genworth Life and Annuity Insurance Co. (GLAIC), and Genworth Life Insurance Co. of New York (GLICNY) to BB from BBB-. We have placed the life insurance companies on Creditwatch Developing. We also lowered our counterparty credit and senior unsecured debt ratings on Genworth Financial Inc. and Genworth Holdings Inc. to B from BB-. We placed the holding companies on Creditwatch Negative. We also lowered our rating on guaranteed Genworth Financial Mortgage Insurance Ltd. to B from BB- (this rating is tied to that on Genworth Holdings). Lastly, we have placed Genworth Mortgage Insurance Corp. on Creditwatch Negative.

Our ratings on Genworths Australia- and Canada-based mortgage insurance units remain unaffected and unchanged.

The lowering of the group credit profile to bb from bbb- and the downgrade of the US life insurance companies reflect the announced suspension of traditional life and annuity sales, our reduced statutory earnings and surplus projections for the US life division, and a prospective business profile that is less diversified and becoming more centered on mortgage insurance and long-term care–two businesses that have exhibited significant volatility historically. The downgrade also reflects our updated view of the organizations enterprise risk management (ERM) to weak from adequate.

The downgrade of the parent and intermediate holding companies is attributable to our lowering the group credit profile, and continued less-than-adequate financial flexibility. Intermediate holding company Genworth Holdings Inc. relies on the divided capacity of its international subsidiaries and holding company cash to fund its debt-servicing requirements of approximately $260 million annually, as well as debt repayment.

We view the credit quality of the Australian and Canadian mortgage insurance entities as relatively insulated at the respective current rating levels given local regulatory oversight, external minority ownership, and restriction on capital fungibility. We have not de-linked the ratings on Genworths ongoing Australian and Canadian entities from the group credit profile. However, we have allowed greater notching at this time relative to the group credit profile due to our updated assessment around level of insulation from credit deterioration in the US operations. We reasonably expect local regulators in Australia and Canada to act to prevent the subsidiaries from supporting the group to an extent that would impair the subsidiaries stand-alone creditworthiness. We believe that our current ratings capture the likely minimum capital requirements to be enforced in both Australia and Canada.

We currently view Genworth Mortgage Insurance Corp. as insulated, within a one-notch limit of the group credit profile, from decreasing credit strength across the remainder of the US business platform. The rating reflects the entitys progress in building its earnings profile and capital strength in recent years, adequate ERM, and the parents economic incentive to preserve the credit profile of the US mortgage insurance business as much as possible.

The CreditWatch Developing on GLIC, GLICNY, and GLAIC reflects the unanticipated suspension of traditional life and annuity sales and managements intent to unstack the organizational structure and isolate GLIC and GLICNY subject to regulatory approval. Depending on further clarification of strategic direction, prospective capitalization of the individual companies, and regulatory approvals, we could affirm the current ratings or raise or lower the ratings on the individual companies by one or more notches. The unstacking process, if approved, may not be achieved until late 2016.

The Creditwatch Negative on Genworth Mortgage Insurance Corp., Genworth Financial Inc., and Genworth Holding Inc. reflects our general uncertainty around the potential for future block asset sales and their financial impact on the holding companies and US mortgage operations.

We expect to refresh our rating and Creditwatch opinions within 90 days, or whenever sufficient information becomes available.

2016
02/23

Category:
Credit Cards

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WATCH: Lower Merion Police Woman Who Stole Credit Cards

LOWER MERION, PA — Police are seeking the public’s help in identifying and finding a woman suspected of stealing several credit cards from an area business and using them to make purchases at Target.

The woman in the video below allegedly stole credit cards from Saxby’s Coffee before going on the spree.

2016
02/23

Category:
Credit Cards

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Apple Pay temporarily unable to add Visa debit and credit cards [U: Resolved]

[Update: Apple says the issue is now resolved after roughly seven hours.]

If youre having trouble setting up Apple Pay this morning, its not just you. Apple is currently reporting an hours-long issue with adding credit cards and debit cards to the mobile payment service.

The issue only appears to be affecting Visa cards, not American Express, MasterCard, or Discover cards, which suggests it could be an issue on Visas side. Making payments with Apple Pay Visa cards also appears unaffected as the issue is only with adding new cards to Apple Pay.

However, the issue is the first weve seen of its kind and has been going on for roughly five hours and counting. Apple acknowledges the issue began affecting some users around 4:15 am ET.

Well keep an eye on the situation and update when everything clears up. In the meantime, youll have to pay for your latte the old-fashioned if youre setting up Apple Pay for the first time.

2016
02/23

Category:
Credit Ratings

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Commentary: Weak macros pressure US chemical credit ratings

The US chemical sector’s credit ratings could come under pressure on falling commodity prices, US dollar strength and slowing global economic growth.

On 27 January, credit ratings agency Moody’s Investors Service placed the ratings of three US-based titanium dioxide (TiO2) producers – Tronox (B2), Kronos Worldwide (Ba3) and Chemours (Ba3) on review for downgrade. The ratings are already in the speculative grade (or junk) category.

“The review for downgrade reflects the ongoing weakness in TiO2 markets and resulting stressed metrics for each of the TiO2 producers.” said Joseph Princiotta, senior analyst at Moody’s.

The review also reflects “growing concerns across commodity markets in general against a backdrop of a cautious economic outlook and concerns about China’s economy, and how a slowdown there might affect local demand and exports of TiO2,” Princiotta added.

In a 26 January special report, Moody’s warned about the impact of deteriorating macro conditions on the chemical sector but also noted that liquidity remains relatively solid.

“We have previously cited an unusual and growing disparity in profitability that developed in the chemicals industry during 2015 and now expect that certain sectors… will be pressured by an extended downturn in commodity prices,” said Benjamin Nelson, senior analyst at Moody’s.

“Moody’s expects this trend will intensify in light of expected deterioration in several downstream industries (metals, mining, construction, steel) and significant exposure to slowing emerging markets,” he added.

And the global economic outlook is less than inspiring. The ratings agency expects modest growth in the US and Europe, continued recession in Brazil and Russia, and slowing growth in China – about the consensus view and certainly not disastrous in and of itself.

Yet commodity chemical producers are poised to feel the brunt of the pain. Overcapacity has emerged as companies have been slow to shut down or idle capacity in response to lower-than-expected demand, especially from the slowing in China.

“China’s ongoing transition to a consumer-led economy will reduce the demand for some commodity chemicals over the next several years,” said Nelson. “The impact of a slowing economy in China is particularly evident in overcapacity situations that have developed in titanium dioxide, chlor-alkali/PVC (polyvinyl chloride), methanol and organosilicones.”

One positive for now is that chemical debt prices have not collapsed, as has been the case with the energy, and metals and mining sectors (see table).

ROOT CAUSES OF SLOWDOWN

As for the global economic slowdown, rather than being transitory, it may be something the industry will have to get used to, for an extended period.

The global economy is continuing along the path of the “Great Unwinding” following the withdrawal of major stimulus programmes in the US and China, contends Paul Hodges, chairman of UK consultancy International eChem.

This Great Unwinding has manifested in slowing China economic growth, and the collapse in crude oil and other commodity prices. And it’s not just about the removal of stimulus and China’s shift away from an export-driven economy, but long-term global demographics.

“Attention will now turn to the real cause of the growth slowdown now under way – the fact that 1bn people are now moving into the lower-spending, lower-earning, New Old 55+ generation,” said Hodges.

“They will be an unprecedented one in five of the global population by 2030. We suggest this means deflation is becoming almost inevitable, as the excess supply created by the stimulus policies cannot be absorbed,” he added.

For central banks, it’s one thing fighting a “normal” cyclical downturn with fiscal stimulus and loose monetary policy, but another fighting demographics. The latter will be swimming against the tide.

International eChem study “How to survive and prosper in today’s chaotic petrochemical markets: 5 critical questions every company and investor needs to answer” covers the olefins, aromatics and polymers markets. See how feedstocks and product supply and demand will impact your business and investments over the next 10 years.

For more information, visit:

www.icis.com/contact/supply-and-demand-study

ICIS and International eChem are publishing a new study: “How to survive and prosper in today’s chaotic petrochemical markets:Five critical questions every company and investor needs to answer”. The study covers the olefins, aromatics and polymers markets. See how feedstocks and product supply and demand will impact your business and investments over the next 10 years. Visit www.icis.com/services/consulting/scenario-planning/supply-and-demand-study

2016
02/22

Category:
Credit Cards

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Banks Mail Out Pre-Activated Credit Cards, Don’t See The Problem

When you receive a new credit or debit card in the mail, it usually arrives in need of activation. You have to call a number and verify some information: sure, no information that a determined identity thief wouldnt already have, but at least it stops random passers-by from harvesting credit cards from mailboxes. Only pre-activated cards are a new trend in banking again. Some customers arent thrilled.

One Chase customer questioned the wisdom of this idea when he received a pre-activated card, and took his concerns to local consumer reporter Kurtis Ming at CBS Sacramento. A representative of Chase explained to the station that shipping pre-activated cards isnt a fraud magnet necessarily.

I can’t comment on mail theft other than to say that we have seen no increase in customer complaints on this topic or fraud related to this topic, the Chase representative explained helpfully.

The good news, of course, is that the cardholder wouldnt be responsible for paying any of those charges, but that doesnt mean calling to report the card theft and ordering a new one is fun or convenient.

A representative of the American Bankers Association also pointed out to CBS Sacramento that some customers prefer to receive their cards ready to go and without any need for activation. Customers can call the issuer to let them know that it has arrived safely, but its not required.

The idea of dropping pre-activated cards in customers mailboxes goes all the way back to the beginning of general-purpose credit cards. The first ones, from Bank of America, arrived in customers mailboxes in 1958, pre-activated with $500 lines of credit. The Bank Americard evolved into the Visa card that we know today.

Inventing something entirely new (the first credit card, Diners Club, was only for restaurants) meant that Bank of America had to learn along with consumers how this revolving credit thing would work. They found that card theft was a problem, and even worse, so was non-payment. They found solutions to this, like card activation and collections calls, that are now familiar parts of the financial landscape.

Activated or not, Americans are falling back in love with credit cards, whipping out plastic to pay for everything, while most of us maintain balances on our revolving credit accounts.

Call Kurtis: Why is My Replacement Credit Card After Fraud Already Activated? [CBS Sacramento]
The Fresno Drop [99% Invisible]

2016
02/11

Category:
Credit Cards

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Don’t tithe with credit cards, give what you have

DEAR MELISSA: I’m against debt, so I’m not particularly fond of churches asking people to use a debt vehicle to pay their tithes. I realize that few businesses and organizations distinguish between debit cards and credit cards when accepting payment. However, this practice bothers me a lot when it comes to churches. The Bible mentions debt several times in Scripture, and every time it does, it’s always in a negative light. It’s not a salvation issue or anything like that, but the Bible basically says debt is a foolish thing.

2016
02/01

Category:
Credit Cards

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4 Major Credit Card Types Demystified

Image Copyright: Roman Motizov

Travel. Cash back. Balance Transfer. Airline. Small Business. With the amount of credit card marketing in America today, these phrases are becoming more and more widely recognized. According to one CFPB study, banks spend over $3B on credit advertising each year.

Even though many of you may have come across this nomenclature before, some may not know exactly what each of these different credit card types does or how they differ. How are travel cards different from airline ones? Balance transfer from zero percent cards? This article will give you a crash course in each, making you one step closer to becoming a credit card expert.

  1. Rewards: Generic Travel, Airline, Hotel, and Cash back. Rewards cards is an umbrella term that encompasses all credit cards that earn their users some form of prizes. Travel, airline, hotel, and cash back are the 4 major categories falling into the scope of these. Airline and hotel cards are ones co-branded with a particular company. The rewards these cards offer tend to be mainly redeemable for more nights or flights, with the affiliated company.

    Generic travel cards, on the other hand, offer users greater flexibility, at the cost of rewards. These cards will generally provide consumers a lesser value per dollar, and in turn give them more travel and redemption options. Cash back credit cards are aimed at more general consumer spending – gas stations, grocery stores, etc. The rewards these cards provide are also a lot more flexible. Instead of being miles or points that you use to pay for additional travel, cash back credit cards provide users with statement credit – that is money that can be used to offset charges on their credit card bill.

  2. Debt Management: Zero Percent cards, Balance Transfer, Low Interest. These types of cards fall into what I call the debt management group of credit cards. Their aim is to help individuals who are dealing (or are about to deal with) credit card debt, by mitigating the negative effects of interest. Low interest cards are the most self-explanatory. They are simply cards that provide low long-term APR to account holders. Zero percent cards (sometimes referred to as 0% APR) are pretty straightforward in what they do. These cards will provide users with no interest on purchases for some set amount of time – usually anywhere between 6 and 12 months.

    Balance transfer credit cards do the same, except on any credit card debt that is transferred from another card to it. Typically, there is a small fee associated with such a transaction. However, this added charge usually pales in comparison to the interest savings these cards can produce.

  3. Small Business Credit Cards. These cards can fall into any of the other groups we mentioned above. A major point differentiating these from other cards, however, is the fact that they are issued to companies, instead of individuals. While this may seem obvious at first, the distinction is critical. Because small business credit cards can be issued to a company, instead of a consumer, a business owner doesnt need to jeopardize his or her personal credit score in the process. While small business credit cards still require a personal guarantor, any late payments or issues will typically only reflect on the company, and not any one individual within it.

    Account holders, on some of these business cards, also have the ability to export spending into different file formats, or products such as Quicken. This can greatly streamline accounting and expenditure management for a company, which is especially important around tax time.

  4. Secured credit cards. The last major group of credit cards worth highlighting is secured cards. These are targeted at individuals with subprime FICO scores (<600). If you have filed for bankruptcy in the past, or were delinquent on a payment, you may be in this group. Secured credit cards require users to submit a security deposit, in order to open an account (hence the name). Cardholders are then issued a credit card with a limit equal to their deposit. These cards can then be used to slowly build up ones credit score.

    Generally, secured credit cards come with high APR and little to no rewards. They are not intended to be anyones long-term credit card, and instead are just a temporary solution to a credit score problem.

More From ValuePenguin:

  • Cash Back, Miles, or Points: Understanding the Different Credit Card Rewards
  • Credit Scores: What are they? How do they work?
  • What Are Credit Card Balance Transfers?