All articles tagged with #consumer finance
Trump floated a 10% APR cap on credit cards for one year—potentially saving consumers about $100 billion annually in interest per Vanderbilt analysis—yet it could limit credit for low-income and subprime borrowers and weigh on spending; banks warn of higher fees or reduced rewards, and enactment would likely require legislation rather than executive action.
President Trump has called for a one-year cap on credit card interest rates at 10%, reviving a campaign promise, but has not provided details on implementation, amid a history of opposing certain financial regulations during his administration.
President Donald Trump has called for a one-year cap on credit card interest rates at 10%, citing consumer affordability concerns amid economic pressures, though details on implementation remain unclear. The proposal is part of his broader populist economic messaging, which has faced mixed public reception and political challenges, including previous efforts by the Biden administration to regulate credit card fees.
The Federal Reserve is expected to cut interest rates by 0.25 percentage points on Thursday, marking the second reduction this year following a larger cut in September. This move aims to ease borrowing costs as inflation nears the Fed's 2% target. While the immediate impact on consumers will be minimal, further rate cuts are anticipated, potentially leading to more significant savings for borrowers over time. However, mortgage rates may not decrease as expected due to other economic factors like rising Treasury yields and concerns about U.S. debt.
Robinhood has unveiled its new credit card, available exclusively for Robinhood Gold members, featuring the unique ability to invest cash-back bonuses into investments. The move comes after the acquisition of startup X1, known for a similar feature. With perks like adding family members as cardholders and targeting Apple's consumer credit market, tech companies like Robinhood and Apple are increasingly expanding into the realm of personal finance, blurring the lines between technology and day-to-day consumer finance.
A family accidentally purchased $10,000 worth of Disney+ gift cards, resulting in a significant financial loss.
A recent study by WalletHub found that 62% of Americans believe that deferred interest payment plans should be illegal. Deferred interest plans, offered by big-box retailers, promise no interest on purchases if paid off within a certain period. However, if even a dollar of debt remains at the end of the promotional period, the consumer is suddenly responsible for the full deferred interest, often at high rates. Many major retailers offer these plans, while others, like Walmart and Target, do not. Consumer advocates argue that these plans are designed to be complicated and trap vulnerable consumers.
More US holiday shoppers are opting for "buy now, pay later" loans as a convenient alternative to credit cards. This trend reflects a shift in consumer finance preferences and is impacting the retail industry.
Goldman Sachs has announced that it will sell its fintech lending platform, GreenSky, to a group of investors led by private equity firm Sixth Street. The deal, which includes a book of loans created by Goldman, will result in a 19 cents per share reduction to third-quarter earnings. This move is part of CEO David Solomon's strategy to retrench from the bank's consumer finance ventures and focus on its core investment banking, trading, and asset and wealth management operations.
The Consumer Financial Protection Bureau (CFPB) has released a special edition of its Supervisory Highlights, revealing its efforts to protect consumers from illegal junk fees in banking, auto loans, and remittances. As a result of the CFPB's supervisory work, companies are refunding $140 million to consumers, with $120 million for surprise overdraft fees and double-dipping on non-sufficient funds fees. The report also highlights the elimination of non-sufficient funds fees by most financial institutions, saving consumers an estimated $2 billion annually. The CFPB continues to combat illegal fees and urges consumers to submit complaints about financial products or services.
A Reddit thread highlights various expensive items that people continue to pay for despite being considered a waste of money, including internet service providers without unlimited data plans, annual smartphone replacements, ineffective gym supplements, overpriced bottled water, and warranties/insurance for affordable replacement costs. Other mentioned expenses include large weddings, in-app purchases in games, food delivery from third-party apps, vacations to kid-centered places for young children, and multiple streaming services when only one is regularly used.
Research suggests that many people forget to cancel their monthly subscriptions, resulting in unnecessary costs. The popularity of pay-by-the-month subscriptions has led to an increase in Americans signing up for various services but often neglecting to cancel when they are no longer needed. A study analyzing credit card records found that when customers are prompted to actively renew their subscriptions, they cancel about four times more frequently than during other months. Consumer advocates argue that businesses profit from customers' forgetfulness and inertia, and even when customers attempt to cancel, they often encounter obstacles. The Federal Trade Commission is considering a new rule that would make canceling subscriptions as easy as signing up and require businesses to send annual reminders.
Apple has launched its "Pay Later" service, allowing users to split purchases made via Apple Pay into four payments over six weeks with no interest or fees. The service will be available to select users initially, with an expansion to all eligible users in the coming months.