The dangers of taking your salary in crypto; Upcoming interest rate hikes

Fed signals it will likely raise interest rates in March to reduce inflation

The Federal Reserve takes off the gloves in its attempt to fight off a historic surge in inflation. The Fed kept its key rate near zero on Wednesday, but said it would be “soon appropriate” to raise it, implying that a March interest rate hike is almost certain. The increase would be the first in more than three years and kick off what is expected to be a wave of increases of at least three-quarters points 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 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 ragtag group of politicians, celebrities, and athletes who recently announced they would be accepting their paychecks in cryptocurrency. New York Mayor Eric Adams, basketball player Klay Thompson and NFL quarterback Aaron Rodgers are all facing deep pay cuts after bitcoin prices fell below $33,000 this week, a far cry from November’s high of nearly $69,000. NFL wide receiver Odell Beckham Jr., who allegedly converted a $750,000 paycheck to bitcoin, may have lost the equivalent of nearly $350,000, according to analysis by MarketWatch. [Vox]

Experian will let Americans create their own credit reports

Consumers invisible to banks thanks to the enigmatic American credit reporting system have a new tool at their disposal. Experian, one of the big three credit bureaus, is launching a new program that will allow consumers to simply create their own credit reports from scratch. The program, called Go, will involve customers linking “non-debt-related recurring bills” (think cell phone payments or utility bills) to provide the basis on which to establish a credit score. The process aims to move consumers from invisible to banks to a credit report and an increased chance of loan approval. Beginning in 2018 and 2019, Experian and other credit reporting agencies began allowing consumers who already have credit reports to improve their scores by adding additional information of their choice, primarily the items below. on it, like utility payments and phone bills. This makes Experian the first credit bureau to enable the use of daily cash data as an on-ramp for building credit. [Fast Company]

40% of millennials say credit card debt is their biggest financial setback

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

Apple will let iPhones accept credit cards by threatening Square

Apple is planning a new service that will allow small businesses to accept payments directly on their iPhones without any additional hardware, according to people familiar with the matter. The company has been working on the new feature since around 2020, when it paid around $100 million for a Canadian startup called Mobeewave which developed technology that allowed smartphones to accept payments at the touch of a credit card. The system will likely use the iPhone’s Near Field Communication chip, or NFC, which is currently used for Apple Pay. [Bloomberg]

CFPB signals sweeping crackdown on hidden fees for banks and credit cards

The Consumer Financial Protection Bureau reported a broad crackdown on hidden and excessive fees charged by banks, mortgage lenders and other financial entities. The federal agency is asking consumers for feedback on so-called unwanted fees associated with their bank, credit union, prepaid account or credit card, mortgage, loan or payment transfer. There has been an “explosion” of junk fees, such as overdraft fees charged by banks, late fees charged by credit card companies, and closing costs when buying a home. The CFPB will use public feedback to target the new rules, provide guidance to businesses and focus its monitoring and enforcement resources. The comment period ends March 31. [CNBC]

Capital One’s marketing costs rise as card competition intensifies

Capital One Financial’s marketing spend is rising, reflecting increased competition among credit card issuers to capitalize on consumers’ renewed appetite for borrowing. Capital One’s marketing costs jumped to nearly $1 billion in the fourth quarter from $751 million in the prior quarter, largely due to higher credit card spending. Other major credit card companies also spent more on marketing. JPMorgan Chase recently estimated that its marketing costs will rise 35% this year, largely due to its efforts to attract more credit card customers. American Express spent $1.6 billion on marketing last quarter, an increase of $200 million from the third quarter of 2021. And Discover Financial Services saw $271 million in marketing spend last quarter, against 159 million dollars a year earlier. [American Banker]

Data breaches hit record high in 2021

The number of reported data breaches jumped 68% last year to reach 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 have targeted everything from the nation’s largest oil pipelines to companies loaded with the personal information of millions of American consumers. [CNet]

Walmart-backed fintech startup acquires two companies and a new name

The Walmart-backed fintech startup, to be called ONE, aims to create a “super financial services app.” The company, led by two former Goldman Sachs Group executives, will buy Even Responsible Finance, which is used by employers to get workers their paychecks sooner and counts Walmart as a big customer. It will also buy ONE Finance, a financial services mobile app known as neobank that allows users to manage money and apply for a debit card or other services that come with lower fees than traditional banks. [The Wall Street Journal]

Capital One launches 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 January 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 can earn $500 once you’ve spent $5,000 within the first three months of joining the card, and $2,500 once you’ve spent $50,000 in the first six months. [CNBC]

Huawei exploits the mobile payments curve

Huawei is circumventing US restrictions preventing it from using Google’s Android software by installing NFC payment functionality on its smartphones using the Curve card consolidation app. All Huawei users in Europe can now download Curve Pay to start making mobile payments, with the added benefit of a 1% cashback on all third-party purchases made over the phone and 5% on online stores from Huawei in Czech Republic, France, Germany, Italy, Netherlands, Poland, Portugal, Romania, Spain and United Kingdom. The deal with Huawei is similar to a previous agreement between Curve and Samsung, which allows the Korean company to use Google Pay as part of its payment ecosystem. [Finextra]

The Spanish Santander launches a “Buy now, pay later” platform on its markets

Spain’s Santander has announced the launch of Zinia, a new “buy now, pay later” platform that it plans to roll out in its markets this year, starting with the Netherlands and Spain. The move is part of a broader strategy by European lenders to boost revenue as they battle low interest rates while trying to fend off competition from tech companies. Buy now, pay later services have exploded in popularity alongside the acceleration of e-commerce during the pandemic. However, they drew the attention of regulators to fears they would lead to excessive leverage, especially among younger consumers. [Reuters]

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