Credit card companies face tough times and prepaid... - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Credit card companies face tough times and prepaid cards offer a solution

Credit card companies face tough times and prepaid cards offer a solution

Credit card companies face tough times and prepaid cards offer a solution
The content is accurate at the time of publication and is subject to change.

Bank of America has recently admitted to facing risks of lost revenues from the combination of factors in which include but are not limited to the credit card reform act, debit card law changes, and other such provisions and amendments.


Bank of America’s estimates losing at least $1 billion every year as new rules and regulations continuously target credit card company operations. Other banks project their revenue losses at an annual amount of 22.8 billion dollars due to lost interchange fees.


These projected amounts of revenue losses have come about in the face of growing legislation to reduce or minimize the amount of interest rates and fees that credit card issuers can charge their card holders.


Since the onset of the economic recession, large banks have already admitted to losing revenues, and the same effects were extended to the mortgage lending industry.


Today, credit card companies are looking for ways to recoup their lost revenues during the economic recession. Financial analyst Tim Blearing claims that the credit card issuer’s drive to increase their profit becomes evident at this point, more than ever.


In their bid at increasing revenue, credit card companies now offer more innovative and creative card management systems with the easier and more accessible prepaid cards. These cards have more competitive interest rates than previously compared.


The prepaid cards are now emphasized by card issuers to be equally important if not better than the traditional credit cards. Due to the current economic conditions, credit card companies have seen an opportunity to capitalize on emergent consumer preferences and behaviors after the recession.


Card companies market prepaid cards with its alternative payment system that compels its holders to first have an initial deposit or disposable credit before the account gets activated and thus becomes useful.


Financial analyst Tim Blearing says that the fees’ credit card companies charge their prepaid card holders can be an addition to the former’s annual profit. He says that the card issuers now have prepaid cards as a welcome addition for different ways of making profit.


Prepaid cards are useful and most often used by holders when cash is unavailable in making travel arrangements from reservations to ticket purchases, Blearing adds.


He also says that though debit and credit card fees charged to card holders are still much more significant enough when combined to make a profit for the credit card company, prepaid cards are here to stay as a solid step for the credit card industry to cope with the tough times.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

New Visa Cards From CRYPTO.com

Posted: July 17, 2018

CRYPTO.com, a payments and cryptocurrency platform, is now offering three new cards - Icy White, Jade Green and Royal Indigo. These are Cryptocurrency-based credit cards. With them, people can get a wide range of perks and benefits, ... Continue reading
A New Priority Pass Restaurant and Lounge in Washington D.C.

Posted: July 16, 2018

Hitting the lounge for some rest and relaxation when flying can be a great perk. And now people with Priority Pass membership - or a credit card giving them Priority Pass lounge access - have two new options to check out when passing ... Continue reading
New LL. Bean Credit Card

Posted: July 13, 2018

L.L. Bean's credit card portfolio was purchased by Citi Retail Services, and they have now partnered with MasterCard to launch a new credit card, offering 4% on purchases made at L.L. Bean. But that is not all; With the L.L. Bean ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate.
For Excellent, Good Credit
We'll match all the Miles you've earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
0% Intro APR on Balance Transfers and Purchases for 18 months. After that, the variable APR will be 15.74% - 25.74% based on your creditworthiness*
For Excellent, Good Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!