The Dangers Of Taking Your Salary In Crypto; Interest Rate Hikes Coming

Fed Signals It Will Likely Hike Interest Rate in March to Curtail Inflation

The Federal Reserve is taking off the gloves in its bid to fight a historic surge in inflation. The Fed held its key interest rate near zero Wednesday but said it will “soon be appropriate” to raise it, hinting that an interest rate hike in March is all but certain. The increase would be the first in more than three years and kick off what’s likely to be a flurry of three or more quarter-point increases this year aimed at reining in sharply rising consumer prices. “With inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise” its key interest rate, the Fed said. [USA Today]

The High Price of a Crypto Salary

Bitcoin prices slipped to a six-month low on Monday. This is bad news for anyone who has invested in crypto, including a motley group of politicians, celebrities, and athletes who’ve recently announced that they’ll accept their paychecks in cryptocurrency. New York City Mayor Eric Eric Adams, basketball player Klay Thompson, and NFL quarterback Aaron Rodgers all face large pay cuts after bitcoin prices fell lower than $33,000 this week, a far cry from a November high of nearly $69,000. NFL wide receiver Odell Beckham Jr., who reportedly converted a $750,000 paycheck into bitcoin, may have lost the equivalent of almost $350,000, according to an analysis from MarketWatch. [Vox]

Experian Will Let Americans Create Their Own Credit Reports

Consumers invisible to banks thanks to America’s enigmatic credit-reporting system have a new tool at their disposal. Experian, one of the big three credit bureaus, is introducing a new program that will allow consumers to simply create their own credit reports from scratch. The program, called Go, will involve customers linking “recurring nondebt bills” (think cell phone payments or utility bills) to provide the foundation on which to build a credit score. The process is aimed at converting consumers from being invisible to banks to having a credit record and an increased chance of loan approval. Starting in 2018 and 2019, Experian and other credit-reporting agencies began allowing consumers who already have credit reports to boost their scores by adding extra information of their choosing—mostly the above items, like utility payments and phone bills. This makes Experian the first credit bureau to allow everyday cashflow data to be used as an on-ramp for building credit. [Fast Company]

40% of Millennials Say Credit Card Debt is Their Biggest Financial Setback

Two in five millennials (40%) say that credit card debt is their greatest financial setback, according to a new survey. Millennials also worry about money an average of 7 times per day, more than any other generation. However, the survey also found that millennials feel more financially confident than any other age group, and they’re the most optimistic about what their finances will look like ten years from now. Aside from that, 61% of U.S. consumers also believe that living through the pandemic has made the younger generations more financially savvy. [Fox Business]

Apple to Let iPhones Accept Credit Cards in Threat to Square

Apple is planning a new service that will let small businesses accept payments directly on their iPhones without any extra hardware, according to people with knowledge of the matter. The company has been working on the new feature since around 2020, when it paid about $100 million for a Canadian startup called Mobeewave that developed technology for smartphones to accept payments with the tap of a credit card. The system will likely use the iPhone’s near field communications, or NFC, chip that is currently used for Apple Pay. [Bloomberg]

CFPB Signals Broad Crackdown on Hidden Fees for Banks, Credit Cards

The Consumer Financial Protection Bureau signaled a broad crackdown on hidden and excessive fees charged by banks, mortgage lenders and other financial entities. The federal agency is seeking consumers’ input on so-called junk fees associated with their bank, credit union, prepaid or credit card account, mortgage, loan or payment transfers. There’s been an “explosion” in junk fees, such as overdraft fees charged by banks, late fees levied by credit card companies, and closing fees when buying a home. The CFPB will use public comments to target new rules, issue guidance to firms, and focus its supervisory and enforcement resources. The comment period ends March 31. [CNBC]

Capital One’s Marketing Costs Surge as Card Competition Heats Up

Capital One Financial’s marketing spending is swelling, reflecting heightened competition among credit card issuers that want to capitalize on consumers’ renewed appetite for borrowing. Marketing costs at Capital One jumped to nearly $1 billion in the fourth quarter, up from $751 million in the prior quarter, largely due to higher credit card-related spending. Other major credit card companies have also been spending more on marketing. JPMorgan Chase recently estimated that its marketing costs will rise by 35% this year, largely due to its efforts to snag more credit card customers. American Express spent $1.6 billion on marketing last quarter, a $200 million increase from the third quarter of 2021. And Discover Financial Services recorded $271 million in marketing expenditures last quarter, up from $159 million a year earlier. [American Banker]

Data Breaches Break Record in 2021

The number of reported data breaches jumped 68% last year to the highest total ever. According to the Identity Theft Resource Center’s 2021 Data Breach Report, there were 1,862 data breaches last year, surpassing both 2020’s total of 1,108 and the previous record of 1,506 set in 2017. The numbers reflect a year of high-profile cyberattacks that targeted everything from the country’s largest oil pipelines to companies entrusted with the personal information of millions of American consumers. [CNet]

Walmart-Backed Fintech Startup Is Acquiring Two Firms and a New Name

The financial-technology startup backed by Walmart, to be called ONE, aims to build a ‘financial services super app.’ The firm, helmed by two former Goldman Sachs Group executives, will buy Even Responsible Finance, which is used by employers to offer workers their paychecks early and counts Walmart as a large customer. It will also buy ONE Finance, a financial-services mobile app known as a neobank that allows users to manage money and apply for a debit card or other services that come with lower fees than traditional banks typically charge. [The Wall Street Journal]

Capital One Debuts up to $3,000 Welcome Bonus for New Spark Cash Plus Customers

The Capital One Spark Cash Plus Credit Card is a solid business credit card offering unlimited 2% cash back on every purchase. Starting Jan. 25, the card comes with a welcome offer for new cardholders where you can earn up to $3,000 in bonus cash back. When you sign up for the Spark Cash Plus Credit Card, you’re eligible to earn $500 once you spend $5,000 in the first three months of card membership, and $2,500 once you spend $50,000 in the first six months. [CNBC]

Huawei Taps Curve for Mobile Payments

Huawei is skirting around U.S. restrictions that prevent it from using Google’s Android software by installing NFC payments functionality across its smart phones with the help of card consolidation app Curve. All Huawei users in Europe can now download Curve Pay to start making mobile payments, with the added benefit of 1% cashback on all third party purchases made by phone and 5% across Huawei’s online stores in Czech Republic, France, Germany, Italy, the Netherlands, Poland, Portugal, Romania, Spain, and the UK. The arrangement with Huawei is similar to a previous deal struck between Curve and Samsung, which enables the Korean company to utilize Google Pay as part of its payments ecosystem. [Finextra]

Spain’s Santander Launches Buy Now, Pay Later Platform Across its Markets

Spain’s Santander announced the launch Zinia, a new buy now, pay later platform it plans to roll out across its markets this year, starting in the Netherlands and Spain. The initiative is part of a wider strategy by European lenders aimed at boosting their revenues as they struggle with low interest rates while trying to fend off competition from technology firms. Buy now, pay later services have exploded in popularity in tandem with the acceleration in e-commerce during the pandemic. However, they have drawn scrutiny from regulators over concerns they will lead to excessive indebtedness, especially among younger consumers. [Reuters]


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