More Americans are Trading Down as a Result of Inflation

A new report shows that it’s not just lower-income consumers who are trying to stretch their dollars as inflation continues. Nearly three out of four adults are “trading down,” meaning trying to reduce spending in areas such as groceries, according to a new survey of 4,000 people by consulting firm McKinsey. Sixty percent of respondents said they’ve reduced the amount of items they buy, while 44% have delayed a purchase. And 37% have switched to shopping at cheaper retailers or are more likely to seek discounts. [CU Today]

Nearly half of the adults in America hold at least one unused gift card

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Almost Half of Americans Are Holding on to $21 Billion in Unused Gift Cards, Store Credits

Even as many people struggle to stretch their incomes amid high inflation, it turns out there’s money they already have they’re probably overlooking: unused gift cards. To that point, 47% of people currently have at least one unused gift card, voucher or store credit, according to a new survey from The average unused amount is $175 per person, up from $116 last year. For the entire U.S. adult population, that may add up to $21 billion. [CNBC]

CFPB Seeks More Credit Card Transparency

The Consumer Financial Protection Bureau aims to revamp how it collects credit card data to “spur competition” and empower consumers as they weigh which credit cards to apply for. Among the changes the CFPB is considering making to its Terms of Credit Card Plans Survey, which collects data from issuers on their credit card plans, one would be compelling “the top 25 card issuers to submit data on each of their general purpose credit cards.” Currently, each big issuer only shares information for their card that has the largest number of customers and involves a network like Visa or Mastercard. Other potential changes include requiring issuers to provide median annual percentage rates by credit score tiers, collecting information on credit cards that are geared toward specific groups and allowing more entities to participate in the survey. [Payments Dive]

Cryptocurrency Has Been Touted as the Key to Building Black Wealth. But Critics Are Skeptical

A study released earlier this year by Charles Schwab and Ariel Investments found that Black Americans were more likely than White Americans to invest in cryptocurrency. The study highlights data that shows Black investors are less likely than White investors to believe cryptocurrency is a risky investment, despite the extreme volatility of cryptocurrency, Black people, the study says, are also more likely to make investment decisions based on social media or other less credible sources. The disparity leaves Black investors disproportionately vulnerable when the cryptocurrency market collapses. Critics argue that Black Americans lag behind their White counterparts in financial literacy which they say is key to making smart investment decisions with cryptocurrency. Still, social media influencers, Black celebrities, athletes and conference organizers continue efforts to lure more Black investors into cryptocurrency, touting their own financial gains. [CNN]

After a Year-Long Dip, American Consumer Spending Power Will be Back in 2023

After a year-long dip, household cash flow will begin growing again right after Christmas, and accelerate through the new year, according to new research by analysts at Goldman Sachs. These gains will reverse a year of negative growth of about $600, or 4.2%, in household discretionary cash flow, according to Goldman’s analysis. The biggest driver of the cash flow improvement next year, he said, will be wages. [CNBC]

Visa Tokens Overtake Payments Giant’s Physical Cards in Circulation

Visa said it has issued over 4 billion network tokens worldwide through its security technology Visa Token Service, outpacing the total number of its physical cards in circulation. VTS replaces 16-digit Visa account numbers with a token that only Visa can unlock, protecting the underlying account information. The popularity of the service driven by its promise of safer online transactions corresponds with the surge in online spending since the global outbreak of Covid-19. E-commerce volume has grown by more than 50% since the onset of the pandemic, the world’s largest payments processor said in a statement citing data from the U.S. Department of Commerce. [Reuters]

Amex Brings Back Balance Transfer Offers

American Express did away with all of its 0% APR balance transfer offers during the pandemic but it looks like they’re trickling back in. Now, new cardholders can take advantage of an introductory 0% APR on balance transfers on two American Express cards, the Amex EveryDay Credit Card and the Amex EveryDay Preferred Credit Card. [Forbes]

Credit Card Customer Satisfaction Increasing, But Warning Signs Abound

After declining for two straight years, credit card customer satisfaction is rising once again, according to the J.D. Power. Overall satisfaction improved five points to 810 on J.D. Power’s 1,000-point scale. The study’s authors noted that the improvements were especially significant in areas such as credit card terms, benefits, services and communication. The report classifies most credit card holders (57%) as financially unhealthy, up four percentage points from 2021. Almost a quarter of consumers (22%) say they are worse off financially than a year ago. The highest inflation readings in 40 years and near-record credit card balances and credit card interest rates are surely major contributors to this malaise. [Bankrate]

Walmart Unveils Rewards Program for Walmart+ Members

Walmart has launched Walmart Rewards as a new benefit to its Walmart+ membership. Shoppers can earn and redeem rewards both in-store and online. For online shoppers, customers can tap the “add reward” option under eligible items on Walmart’s site or app to claim the savings and then apply their rewards balance to their purchase at checkout. The item-specific rewards, powered by Ibotta Performance Network, come at a time when Walmart is bolstering the perks tied to Walmart+. [Grocery Dive]

Cost-of-Living Crisis Prompts Buy Now, Pay Later Warning from UK’s FCA

People responsible for misleading ‘buy now, pay later’ adverts could face two years in prison, Britain’s financial watchdog warned on Friday as it told firms offering the loans to stop encouraging “impulse buying” and spell out late repayment fees. As Britain’s cost-of-living crisis worsens, the Financial Conduct Authority has told so-called BNPL firms and the British Retail Consortium that the benefits of the on-the-spot, interest-free, short-term loans were being emphasized in adverts without fair and prominent indications of any relevant risks. [Reuters]

India Lifts Ban on American Express

India has lifted business restrictions on American Express, once again permitting the U.S. giant to onboard new customers in the South Asian market after the firm demonstrated “satisfactory compliance” with local data storage rules. In a series of moves last year, the Reserve Bank of India indefinitely barred Mastercard, American Express and Diners Club from issuing new debit, credit or prepaid cards to customers over noncompliance with local data storage rules. Unveiled in 2018, the local data-storage rules require payments firms to store all Indian transaction data within servers in the country. Visa, Mastercard and several other firms, as well as the U.S. government, previously requested New Delhi to reconsider its rules, which they argued were designed to allow the regulator “unfettered supervisory access.” [Tech Crunch]

Binance Teams Up with Mastercard to Roll Out Prepaid Crypto Card

In partnership with Mastercard, crypto giant Binance is launching its pre-paid card offering cryptocurrency “rewards” on customers’ purchases. The alliance will see Binance roll out its crypto debit card in Argentina, the first country in Latin America to have the product. The Binance Card allows users in the region with a valid national identity document to make purchases and pay bills with cryptocurrencies. The new offering provides clients with a simple way to acquire cryptocurrencies without having to pay fees or navigate the sometimes-complicated onboarding processes at exchanges. The card also offers other benefits such as access to exclusive offers with select merchants and comes with no annual fee or foreign transaction fees. Binance debit card works just the same as any other bank card, except it isn’t linked to a mobile banking app, but a crypto wallet. [Finance Feeds]