Inflation Causes Financial Anxiety and Threats to US Economy

Two-thirds of Americans suffer from financial anxiety

A survey conducted in early April by US News & World Report reveals that more than two-thirds of Americans experience financial anxiety. Nearly 32% of respondents say the cause of their financial anxiety is rising prices due to inflation. Nearly one in four say the main source of their stress is living from paycheck to paycheck. Of those who say inflation has affected their financial health, here is how they summarize the impact: extreme impact: 12.4%; significant impact: 27.8%; moderate impact: 40.4%; and small impact: 19.4%. [U.S. News and World Report]

JPMorgan CEO Jamie Dimon says ‘powerful forces’ threaten US economy

JPMorgan Chase’s pandemic boom ended with a 42% drop in profits and a warning: rising inflation and war in Ukraine pose big threats to the US economy. Chief executive Jamie Dimon said the economy was strong and growing, citing double-digit growth in card spending, low delinquencies and healthy balance sheets for households and consumers. But the bank surprised Wall Street by setting aside $900 million in new funds to prepare for economic turbulence; a year ago it released $5.2 billion it had set aside for possible loan losses in the early months of the pandemic. [The Wall Street Journal]

Store credit cards drive corporate profits and disgruntled workers

Clothing retailers sell more to their buyers than jeans and sweaters. Large clothing companies also sell credit, often with very high fees, such as The Gap’s 21.7% starting interest rate and late payment fees of $27-37. In 2019, Macy’s store credit card revenue of $771 million accounted for more than half of Macy’s operating profit. As researchers studying clothing retail workers, we did not expect to know more about retail credit cards. When we asked workers about the worst part of their job, we expected to hear about low pay, inconsistent schedules, and rude customers. But many workers have identified mandates of pushing credit card applications on customers as the worst part of their jobs. Our research shows that they know, sometimes from personal experience, how credit cards can ruin someone’s finances. [The Conversation]

Visa changes rules for gas stations to avoid $125 pump limit

Visa and Mastercard are planning a series of changes to gas station rules to allow larger transactions after a spike in US fuel prices made it difficult for some drivers to fill up with credit cards . Many gas stations have a $125 limit for Visa transactions at the pump, as larger transactions carry higher fees for some cards, as well as additional liability for fraud. In recent months, that has forced some customers — those who drive large SUVs in states with high fuel prices, for example — to pay using two transactions to fill their tanks. [Bloomberg]

1 in 3 adults victimized by gift card payment scams

More than a third of American adults have been told by a scammer to pay a fake financial debt with a gift card, according to a new AARP survey. About a quarter of those targeted bought gift cards and shared the numbers with the scammers, losing an average of $200. The draw scenario was the most common tactic in gift card payment scams, reported by 15% of survey respondents. Next most popular was being asked to prepay for a service or product (12%), help a friend or colleague in need (12% each), or pay the phone bill or someone’s utility (10%). Whatever the pitch, anyone asking you to pay for it with a gift card is a scammer, according to the Federal Trade Commission. [AARP]

Mastercard uses AI and opens the bank to manage risk of faster payments

Up to one in 50 ACH transfers fail, a problem that Mastercard says can be solved through a combination of new data sharing and machine learning techniques. The card network uses technology from Finicity, an open banking provider Mastercard acquired in 2020 for $825 million, to improve the performance of account-to-account transfers. Mastercard reduces overdraft risk through faster processing, while increasing its ability to serve consumers, issuers and merchants beyond card transactions, an important step as card networks try to become less dependent fees they collect at the point of sale. [American Banker]

New apps help Latinos get debit cards without bank accounts

Latino households are less likely than non-Hispanic whites to use the banking system, and some fintech companies want to change that by helping unbanked Latinos get debit cards so they can transact cashless. A 2019 FDIC survey showed that 12.2% of Hispanic households were “unbanked,” compared to 2.5% of white households. To help Latinos get debit cards that allow them to transact cashlessly, some fintech companies offer mobile apps that don’t require a social security number and accept an individual tax ID or card. Mexican matrícula. [9News]

Peer-to-peer payment apps like Venmo, Cash, PayPal are booming. Do you still need a bank?

Peer-to-peer payment, also known as P2P, allows you to pay without knowing account details; simply search under someone’s name or phone number. The transfer is fast and usually free. Usage varies by age, but the majority of Americans now use mobile payment apps. According to research from Nerdwallet, 94% of millennials use mobile payment apps, compared to 87% of Gen Z, 88% of Gen X and 65% of baby boomers. Nerdwallet found that of those who already use mobile payment apps, 53% primarily use them to pay for online purchases from retailers. Reimbursing friends or family members was the second most common reason at 43%, followed by paying bills at 40%. [CNBC]

Payday loans cost 4 times more in states with weak consumer protections

Since 2010, four states — Colorado, Hawaii, Ohio and Virginia — have enacted comprehensive payday loan reforms, saving consumers millions of dollars in fees while maintaining broad access to small credit. safer. In these states, lenders cost-effectively offer small loans that are repaid in affordable installments and cost four times less than typical one-time payment payday loans that borrowers must repay in full on their next payday. It proves that states can effectively reform payday loans to include strong consumer protections, ensure widespread access to credit, and reduce the financial burden on struggling families. [The Pew Charitable Trusts]

Coinbase eliminates transaction fees for its crypto debit card

Coinbase has announced that it has waived transaction fees for its Coinbase Card to make it easier for customers to spend their cryptocurrencies. The popular cryptocurrency exchange is reinventing the crypto spending and earning experience by removing transaction fees and giving users more opportunities to earn rewards. While Coinbase customers often spend USDC and other stablecoins, the fees for spending crypto on other assets are seen as a hindrance when it comes to using crypto for everyday purposes. [Tech Radar]

Workers trade staggering amounts of data for payday loans

Argyle is one of an emerging set of payroll data companies founded over the past four years to profit from the personal information of workers. They establish secure connections between payroll providers like Paychex

and companies that want to access this data, such as B9. Argyle acts as a courier, transferring data from one account to another, the same way banking data is passed to apps like Venmo. Its competitors are Atomic, Pinwheel, Truv and Plaid. Data provided by workers may be used to purchase financial products such as loans, mortgages, insurance policies, and buy-it-now and pay-later applications; simplify the change of direct deposit; or verify income and employment for apartment and employment applications. [Wired]

Nexo and Mastercard launch the “world premiere” of the crypto payment card

Crypto lender Nexo said it has partnered with global payments company Mastercard to launch what it calls the world’s first “encrypted” payment card. This signals the latest move by incumbent crypto and financial networks to join forces as digital assets become more mainstream. Nexo said the card, initially available in select European countries, allows users to spend without having to sell their digital assets such as bitcoin, which are used as collateral to secure credit extended. The card is linked to a crypto line of credit provided by Nexo and can be used at 92 million merchants worldwide where Mastercard is accepted, allowing investors to spend up to 90% of the fiat value of their crypto assets. [Reuters]

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