JPMorgan Chase reports lower profits, gives cautious economic outlook

NEW YORK, United States - JPMorgan Chase reported a drop in second-quarter profits and warned that a weakening global economic outlook prompted the firm to set aside additional funds to cover potential bad loans.

Executives sketched out a complex economic picture, with US households still relatively well off in terms of savings, a strong job market and robust consumer spending.

But headwinds -- including high inflation, geopolitical uncertainty and fast-changing Federal Reserve policy to sharply curtail liquidity and raise interest rates -- "are very likely to have negative consequences on the global economy sometime down the road," said Chief Executive Jamie Dimon in a statement.

While consumers are "in very good shape," there are "a serious set of issues" that threaten the outlook, Dimon told reporters on a conference call.

These include the worry that Russia will cut off Germany's natural gas supply and the possibility the Federal Reserve's aggressive plan may not be sufficient to rein in inflation.

"The markets will be volatile," Dimon predicted. "You can't have all these kind of things going on and not have volatile markets."

Global equities have been under pressure throughout 2022 as economists increasingly highlight rising recession risks, although some believe any downturn would be relatively mild.

The big US bank posted earnings of $8.6 billion for the second quarter, down 28 percent from the same three months of last year, in results that missed analyst expectations.

Revenues were $30.7 billion, up one percent.

The bank said it added $428 million in credit reserves due to a "modest deterioration in the economic outlook." In the year-ago period, JPMorgan's profits were boosted by a $3 billion release in reserves.

Dimon said even in the case of a recession, JPMorgan would need to hold "a lot less" in reserves compared with the $15 billion it set aside early in Covid-19. 

The bank experienced $657 million in charge-offs for bad loans in the second quarter, up only modestly from the level in the previous quarter.

JPMorgan enjoyed a boost from higher net interest income following Fed interest rate increases. But the bank also incurred higher expenses on salaries, technology and marketing.

The bank temporarily suspended share buybacks to meet new federal stress test requirements for managing risk assets, Dimon said.

Consumers still spending 

The results came as the Labor Department this week reported another large spike in wholesale and consumer prices, which are the heart of investor fears about the consumer-driven US economy.

But JPMorgan Chief Financial Officer Jeremy Barnum said "there's essentially no evidence" at this point of a drop-off in consumption.

The bank's credit card data confirms that consumers are spending more on food and gasoline, but that they are still also spending on travel and dining.

"That indicates to us that consumers still don't feel so pinched by inflation that they're cutting back on discretionary spending, and that's a relatively positive sign," Barnum said.

Persistently high inflation has also raised fears that the Fed will adopt an even tougher line on monetary policy after the central bank announced a 0.75-percentage-point hike, its biggest since 1994.

The latest inflation readings have prompted talk of a potential for full point rate increase at the policy meeting later this month -- one that Fed Governor Christopher Waller said Thursday he could support if coming data show no signs of a slowdown.

Dimon said there is evidence of the hit from the Fed shift, but the impacts could worsen if the US central bank is unable to slow the economy with a "soft landing," Dimon said.

JPMorgan shares finished down 3.5 percent to $108.00.

The suspension of share buybacks is "spooking" investors, said Briefing.com, calling it "a signal that management feels the need to be cautious with its money."

Agence France-Presse

No late fees, finance charges on credit card payments during grace period: BSP

MANILA – Credit card users don’t need to worry about paying late fees and finance charges during the 30-day grace period for payments due within the enhanced community quarantine in Luzon, the Bangko Sentral ng Pilipinas said on Thursday. 

BSP managing director Pia Roman-Tayag said that under the implementing rules and regulations of the Bayanihan to Heal As One Act, collecting these fees is not allowed during the lockdown period. 

“There, it is very explicit, that no fees and charges will be incurred, and no interest,” said Tayag, who heads the BSP’s Center for Learning and Inclusion Advocacy. 

Credit card issuers are allowed to collect interest charges on people who pay only the minimum amount required, Tayag said. But this interest will be paid on a staggered basis to spare credit card users from a “bill shock,” the BSP official said. 

People who pay their credit card bills in full will not get any extra charges in their bills, which means their due date is effectively extended, Tayag said. 

The BSP said the grace period applies not only to consumer loans, such as credit card, auto and housing loans, but also to commercial loans. 

Tayag added that the grace period covers not just loans extended by banks and financial institutions supervised by the BSP, but to all businesses that extend loans, including real estate companies with in-house financing. 

The entire island of Luzon was placed under enhanced community quarantine to stop the spread of COVID-19 from March 17 to April 12.

source: news.abs-cbn.com

LIST: Philippine banks extending payment due dates to help Filipinos in time of COVID-19

MANILA - Major banks in the Philippines have announced a 30-day extension for credit card, mortgage, and loans for eligible customers to help Filipinos during the Luzon-wide COVID-19 lockdown.

SECURITY BANK

• Payments for credit card, home, personal, auto, business mortgage or business express loans are extended by 30 days for qualified customers
• Eligible customers are those with current payment status and with a payment due date of March 16 to April 14 

BANK OF THE PHILIPPINE ISLANDS

• A 30-day grace period will be given to qualified customers for credit card and other types of loans "to help ease the burden during these trying times," the bank said.
• Eligible customers will be notified

UNIONBANK

• Qualified customers will be given a 30-day payment extension from the original due date with no late fees
• Fees for Instapay transactions are also waived until April 14

EASTWEST BANK

• Payments for credit card, auto, home, personal and mortgage loans will be extended for 30-day for eligible customers
• Qualified clients will be notified

source: news.abs-cbn.com

Apple debuts credit card as it readies TV+ launch

SAN FRANCISCO -- Apple on Tuesday launched a smartphone-generation credit card in the US and moved closer to hitting the hot streaming television market with a new subscription service.

The moves come as Apple shifts to emphasize digital content and other services to offset a pullback in the once-sizzling smartphone market.

Arrival of an Apple Card tailored particularly for iPhone fans came with reports that the technology titan is keen to launch its TV+ streaming service before Disney goes live with a rival in November.

Apple TV+ will debut with a small selection of original content and a possible subscription price of $9.99, Bloomberg reported, citing people familiar with the matter.

The price would be more than that charged by powerhouse players Netflix and Amazon Prime as well as the announced subscription cost of a Disney+ service to launch on November 12.

California-based Apple did not immediately respond to a request for comment about TV+.

SPENDING ON SHOWS

Apple has reportedly allocated more than $6 billion for TV+ original shows, a small number of which would be available when the service goes live.

Ads for "The Morning Show" starring Jennifer Aniston, Reese Witherspoon and Steve Carrell began appearing on Twitter.

The show was described as "a high-stakes drama that pulls back the curtain on the morning news" coming this fall to those with Apple TV+ subscriptions.

With Hollywood stars galore, Apple in March unveiled streaming video plans along with news and game subscription offerings as part of an effort to shift its focus to digital content and services to break free of its reliance on iPhone sales.

The Apple TV+ service, an on-demand, ad-free subscription service, will launch this year in 100 countries, the company said at the event.

"We feel we can contribute something important to our culture and to our society through great storytelling," Apple chief executive Tim Cook said when the service was announced.

Apple revealed only a few of the programs in the works but announced collaborations with celebrities on both sides of the camera including Octavia Spencer, J.J. Abrams, Jason Momoa and M. Night Shyamalan.

The new content will be available on an upgraded Apple TV app, which will be on smart television sets and third-party platforms including Roku and Amazon's Fire TV.

Apple will also allow consumers to subscribe to third-party services like HBO and Starz from the same application.

Creative Strategies analyst Carolina Milanesi expected Apple TV+ to be more of a channel at its streaming video service, similar to an HBO, than to be a "one-stop-shop" that would stand alone.

GAMES AND CARDS

Apple is aiming to leverage its position with some 900 million people worldwide who use at least one of its devices.

The company has announced plans to launch a new game subscription service called Apple Arcade internationally later this year.

"Apple Arcade will introduce an innovative way to access a collection of brand new games that will not be available on any other mobile platform or in any other subscription service," Apple said in a statement.

The Apple credit card that became available on Tuesday in a partnership with Goldman Sachs was integrated with Apple Pay.

Those signing up will get a physical card and one for a digital wallet, with the two companies pledging to refrain from sharing or selling data to third parties for marketing and advertising.

Apple Card features that could shake up the credit card industry include not charging fees, giving users cash back on purchases, and providing tools for people to better manage their debt.

"Apple Card delivers new experiences only possible with the power of iPhone," the company said in an online post.

The card uses machine learning and mapping capabilities to let users keep track of spending, and provides payment options showing interest costs of various options.

source: news.abs-cbn.com

British Airways hacked with details of 380,000 bank cards stolen

LONDON - British Airways said that the personal and financial details of customers making bookings between August 21 and September 5 had been stolen in a data breach involving 380,000 bank cards.

The almost two week long hack did not involve travel or passport 

details, the airline said, adding that it had launched an urgent investigation into the theft of customer data.

"The personal and financial details of customers making bookings on our website and app were compromised," it said. "The breach has been resolved and our website is working normally. We have notified the police and relevant authorities."

BA said the breach took place between 2158 GMT on August 21 and 2045 GMT on September 5 and that around 380,000 payment cards were compromised.

BA advised anyone who believed they may have been affected to contact their bank or credit card provider and follow their recommendations.

In terms of compensation, BA said they would be in touch with customers "and will manage any claims on an individual basis."

"We are deeply sorry for the disruption that this criminal activity has caused," the airline said.

It said customers due to travel could check in online as normal as the incident had been resolved.

BA customer Daniel Willis, 34, who booked a flight on Monday with the airline, said he had not been contacted by the airline despite being affected by the data breach.

"I've not heard anything from them on this and I've just had to cancel the card I used. They're a shambles," he told the Daily Telegraph newspaper.

Another BA customer, Stephanie Jowers, said she contacted the airline hours before the hack was announced to query a suspicious charge on her account but was not informed it could have been compromised.

"I asked repeatedly for an explanation. None was given," she told the Daily Telegraph.

PAST ISSUES

The National Crime Agency said: "We are aware of reports of a data breach affecting British Airways and are working with partners to assess the best course of action."

The NCA is set up to tackle the most serious and organized crime posing the highest risk to public security in Britain.

BA apologized in July after technology issues caused dozens of its flights to and from London Heathrow Airport to be canceled.

The airline said the problem was down to an incident with an IT system.

And in May 2017, British Airways suffered a major computer system failure triggered by a power supply issue near Heathrow which left 75,000 customers stranded.

IAG, which owns British Airways and Spanish carrier Iberia, said last month that first-half profits more than doubled.

Earnings after taxation flew to 1.4 billion euros ($1.6 billion) in the first 6 months of 2018 compared with 607 million euros a year earlier, IAG said in a results statement.

The London-listed group, which is also the owner of Irish airline Aer Lingus and Spanish carrier Vueling, added that total revenues swelled 3 percent to 11.2 billion euros.

BA announced last month that it will halt flights to Tehran in September, citing low profitability as the US reimposes sanctions on Iran.

source: news.abs-cbn.com

Visa outage blocks transactions across Europe

Payment systems giant Visa said it was experiencing problems processing transactions in Europe on Friday and was trying to fix the issue.

The blockage has left some customers stuck at the tills in stores across the continent.

"We are currently experiencing a service disruption which is preventing some Visa transactions in Europe from being processed," a Visa spokesman told AFP.

"We are investigating the cause and working as quickly as possible to resolve the situation."

Visa users have taken to social media to complain.

HSBC bank's UK Twitter account replied to a customer query saying: "From what we understand there are still intermittent issues but services are slowly recovering."

Paymentsense, which provides card machines, online payment gateways and virtual terminals to some 60,000 independent businesses in Britain and Ireland, advised users to try paying via contactless transactions.

"We have been informed that Visa has corrected the outage and transactions are now starting to go through. There is still some intermittency however, we believe this is due to a backlog of transactions," it said.

"We now understand that contactless transactions have a better chance of going through. We'd encourage affected customers to try contactless transactions where possible."

It is understood the Bank of England is aware of the issue and is in touch with Visa.

The Royal Bank of Scotland's help Twitter account said cash machine withdrawals were unaffected.

"This is an industry wide issue which is being investigated as a matter of urgency and we apologise for any inconvenience. ATM and MasterCard transactions are not impacted," it said.

In a Primark store on Berlin's Alexanderplatz, frustrated customers were queueing for 20 minutes to pay. Staff did not know why transactions were not going through.

However, in the neighbouring store, transactions were being processed without any problems.

Sandra Foy, who owns a bookshop in Manchester, northwest England, told Sky News television: "I run a small business and the loss of any business is a big deal for us.

"Not knowing when this is going to be sorted out is incredibly frustrating."

apz-rjm/dl

source: news.abs-cbn.com

Apple, Goldman Sachs collaborating on credit card: Wall Street Journal

SAN FRANCISCO - Apple is working with financial giant Goldman Sachs on a credit card that would carry the iPhone maker's digital wallet logo, according to a report Thursday in the Wall Street Journal.

The move comes as Apple puts increasing focus on revenue from online services and content, and as Goldman Sachs seeks to make more money from consumer banking operations.

Apple declined to comment on the report, which cited unnamed people close to the matter.

A joint credit card bearing the Apple Pay brand could launch early next year, and replace a rewards-card partnership Apple has with Barclays, according to the Journal.

Apple, which still gets most revenue from the iPhone, reported a hefty rise in earnings during the first three months of this year, alleviating worries about the iPhone's prospects and a hit from US-China trade tensions.

Analysts praised a big jump in revenues in Apple's services business, which is seen as an important element of diversification away from having revenues tied to gadgets.

A 31 percent rise in services to $9.2 billion was credited to revenue gains from Apple Pay, Apple Music and other programs.

Goldman Sachs Bank USA last month acquired personal finance startup Clarity Money. Financial terms of the deal were not disclosed.

Free-to-use Clarity Money is a leading app that uses artificial intelligence to help people manage their finances with personalized, "actionable insights" such as saving money or finding better credit cards, according to Goldman Sachs.

"Consumers want a better way to manage their finances," GS Bank chief executive Stephen Scherr said in a release.

source: news.abs-cbn.com

Trapped in debt? Here are 7 steps to free yourself

MANILA - Do you feel like you're drowning in debt? If you are, and you think there is no way to escape the debt trap, don't despair. With good planning, discipline, and a measure of sacrifice, you can retire your debt and be free from its burden.

Before you address your problem, try to look back and see how it started. You may be among thousands of Filipinos who are saddled with debt accumulated slowly over the years. This may be the result of living beyond one’s income, lack of planning, or sudden emergencies that force one to borrow, among many other factors.

For many, debt can creep up unknowingly. A personal loan here, a mortgage there, plus months of just paying the minimum amount due on your credit card, could add up until you one day find it beyond your control.

Whatever the cause, what’s important is that you take immediate action before debt paralyzes you financially and even legally. Your action will have to be on two levels – behavioral and financial – so that you can effectively cut down your debt.

 Here are seven steps to help you surmount your mounting debt:

1. Take a hard look at your finances.



This step is necessary since retiring debt calls for a sound plan that you can implement. Try to determine what you are paying for and how much. Just knowing how much you owe can surprise you. By doing this, you will also be able to determine which debt you have to prioritize, e.g. those that cost the most to maintain. You would like to retire the debt that charges you 20 percent a month ahead of the debt that charges you 12 percent a year. Understanding your finances will also allow you to come up with a workable solution.

2. Restructure the most expensive loans.

Today is a great time to restructure loans, given the low-interest rate environment. Are you paying credit card debt? Possibly with more than one credit card company? You will never get out of debt if you do not manage this. Talk to your credit card providers about restructuring the loan. You may also get a personal loan at a lower interest rate to help bring down your interest costs. Study all options available to you, while taking note of penalties and transaction fees.


3. Slash, not just cut, your monthly expenses.

Look at your lifestyle to find out where you can scale back. If you spend so much on entertainment, then cut this drastically. No more expensive night outs or fancy dinners for the time-being, unless you can find more affordable alternatives. Forget expensive vacations. Turn off the aircon and use an electric fan instead. Skip the expensive hair treatments. The cutbacks you can make will all count.

4. Sell assets. Raise cash to retire your loan by selling off assets, big and small.

Do you really need two cars? Do you need to stay in that very expensive house or would a smaller unit in a less luxurious part of town suit your purposes? Those diamond rings sitting in the closet may be your ticket to debt freedom. Even those expensive bags you picked up in your shopping sprees could fetch a fortune in the second-hand market. Selling off assets could help you bring down debt levels drastically.

5. Find additional income sources.
Find other cash sources so that you can put this toward retiring your debt. Are there additional projects you can take on or other jobs you can hold? Try tutoring children in your spare time, or baking cookies on weekends. Your creativity is your limit. This new income source will give you the elbow room to wiggle out of debt.

6. Live below, not just within, your means.

Sometimes you have to change your lifestyle drastically. You may need to dress simpler, consume less, and live a less luxurious life. You may look into selling your car and going back to taking public transportation to work, if your car loan is the cause of your debt burden. If living independently is causing you to bleed financially, think about moving back to your parents. Perhaps the kids could go to a less pricey school. The situation varies per individual, so take what is most appropriate for you.

7. Pay off as much as you can.

Try to retire as much debt as you can, to keep interest costs low and to hasten the debt retiring process. Pay more than the minimum amount due on your card. The longer you are in this situation, the more stressful it can get for you. Bite the bullet now and embrace the inconveniences and hardships it brings, knowing that this is necessary on your way to getting out of debt.

In all these, do not forget to stay focused. Don’t lose sight of your goal, which is to free yourself from debt that can affect you for life if you do not act on it now. By staying focused, you will be less tempted to spend on unnecessary items or to slack off in your debt retirement efforts.

Have a spreadsheet to help you monitor how close you are to your targets. Stay positive and remind yourself that freedom from debt will soon be at hand.

source: www.abs-cbnnews.com

How many credit cards do you need? 5 tips to find out

MANILA - A male customer in the United States was recently reported to own a record 1,497 credit cards. While he is no doubt the exception, the question of how many credit cards does one person need comes up quite often.

Most credit cardholders own more than one credit card. Like most credit cardholders, you may find that having a main credit card and a spare card ensures that you always have access to ready payment tools when needed. On the other hand, you may have a wallet stuffed with plastics that you cannot even monitor. If so, you may have asked yourself if you have one card too many, and wondered how to make the best use of your cards.

There are just as many reasons to have multiple cards as there are to have just one or two that you can manage. The truth is there is no magic number as to how many credit cards you should own. Your spending style, consumption pattern, and cash flow considerations are all factors that can help you decide how many credit cards you should have.

Here are five tips to help you decide how many and which credit cards you should keep.

1. How much credit you can handle?

Are you the type who would shop mindlessly and could not stop for as long as you have not exhausted your credit line? If so, then perhaps you should not hold on to too many cards and try to keep credit limits to levels that would not send you to financial disaster. On the other hand, if you need a large credit line, presumably to use in business or to accommodate your spending needs, then go for a credit card or cards that can provide you the spending power that you can handle.

2. Examine how you use your credit card.

Are you using your credit card for various unrelated needs? If so, it may be helpful to have separate cards for different purposes—say a card for your household needs, and a separate one for your office-related expenses. Having a separate card for your office needs will also be easier for recording purposes. If you regularly make purchases in a foreign currency, a separate dollar-denominated credit card may be handy.

3. Play your cards right.
When you have multiple cards, you will also have to contend with managing many records and meeting different payment deadlines. If you aren’t organized enough to remember payment schedules, then you are better off holding on to just a card or two. Any more will be too much of a hassle for you and worse, could even lead to unnecessary finance charges if you fail to remember your payment due dates.

4. Look at your cash flow.

Check each card’s statement cut-off and payment date and see if this coincides with your cash flow. It may be more manageable, cash flow wise, to have two credit cards with payment due dates that are two weeks apart from each other. In so doing, you can pay off each bill in full without saddling you with interest charges.

5. Check out annual fees.

While it may be nice to have a big credit line and multiple credit cards, make sure to keep an eye on annual fees. Credit card companies charge anywhere from P2,000 to more than P4,500, depending on your type of card. These fees are completely justifiable if you actually use your credit line, want to have emergency funds, and enjoy the other features of the card.

However, if you have many of these cards that are simply stacked inside your wallet, then you are throwing good money for nothing. Determine which cards are worth keeping and paying for, and surrender the rest.

These days, credit card companies are competing for your business and loyalty by offering gifts with your spend and rewarding you with points that you can redeem for a wide range of items. Make these count as you decide what to keep or what plastic to own.

Look into your consumption pattern and determine if there is a card that can offer you rebates or freebies in exchange for your loyalty. For instance, if you are a heavy traveller, credit cards that issue frequent flyer or mileage points may be useful for your purposes. If you patronize a particular store, it may be helpful to have a card that gives you points in exchange for your purchases in this store. Or if you like rebates, a cash back card might be right for you.

When choosing which credit card to keep and to let go, as with any spring cleaning project, one rule applies – only keep what are most relevant for your needs.

source: www.abs-cbnnews.com

A Few Easy Ways for You to Improve Your Credit Score

Few people truly understand credit scores. This isn’t surprising, since the algorithm used for the calculation of a credit score are so complex that only a computer can perform them. Most people want to figure out how to improve their credit score, and this leads to a number of questions. Those questions (and their answers) are below, as well as five great ways to help you improve your score.

Questions (and Answers) People Have about Improving Their Credit Score

• Should I hire a credit repair company in order to improve my score? No, you can do it yourself and save money.
• Will my score improve if I get married? No, your score is personal.
• Will my score improve if I make regular payments on time? Yes, this is one of the most important ways to increase your score.
•  

Let’s take a look at some of the ways in which you can improve your score.

1. Get Rid of Any Issues

This is a slightly sneaky trick, but if it works, it’s worth it. Ask for a copy of your credit report and officially file a dispute against each of the negative marks on there. Chances are that the credit of at least one of them will not respond, which means the credit bureau will remove it. Of course, do also check whether there are any marks on there that actually need contesting.

2. Ask for an Increased Credit Line

If you have a higher credit line, then your credit utilization ratio will also improve. This is because you will use a smaller percentage of your actual limit. As a result, your credit score will improve. With credit cards, you can usually request an increase without them checking your credit score. It is always worth asking, therefore. However, if they want to do a credit check, cancel your application because that will give you a new negative mark.

3. Pay Your Debt

You have to make sure you have as little debt as possible on your file. The less debt you have, the better your credit utilization ratio. The best way, but not the quickest way, to achieve this is by paying your debt. Always pay the debt with the highest interest rates first, as that will improve your credit utilization ratio the quickest.

4. Use the Credit Card as Little as Possible

You may think that you are doing the right thing by always paying off your credit card, but your score is calculated on your balance once a month. If that happens to be the day before you pay your balance, it will actually look bad on you. Hence, use your credit card as little as possible so that your balance is good.

5. Keep Your Eye on New Tips

There are always new tips out there and you should check them out. Follow things like https://123moneyhelp.com/blog to be kept up to date with these new tips. All in all, this will help you improve your score.

source: marriedwithdebt.com

Swipe away: 3 smart tips on how to use credit cards

MANILA - Credit cards are extremely convenient to use. Most credit cardholders have to stop themselves from going into bouts of emotional spending, or impulse buys, especially when card-based discounts come into play.

But that doesn’t mean that you should avoid your credit card completely, if you have one. It means being able to manage your use so that you don’t drive yourself deep in debt.

The best advice that Josh Frank, senior researcher at the Center for Responsible Lending, can give is: "Take advantage of the perks, and avoid the penalties."

Now that credit scores may become a thing in the country, here’s one other reason to stay well below your limit: standard credit scores use credit utilization as a major metric. This is the ratio of credit outstanding to maximum credit available on your card. The lower this is, the better.

There are plenty of reasons to use a credit card, too: automatic billing, cashless transactions, rewards programs, and others.

But remember that a credit card is a way of borrowing against future income, and not an income source in itself. It’s not free money.

So how exactly can you use your credit card without going into debt?

Mobile users can view the desktop version of the slideshow here.

source: www.abs-cbnnews.com

How to Pay the Mortgage with a Credit Card for Free and Make Money Doing It

Back during the housing boom aka meltdown there were services that allowed homeowners to make their mortgage payments with a credit card.

These services charged fees for the convenience, and looking back, they were probably only offered because people couldn’t keep up with their mortgage payments.

Unsurprisingly, these services seemed to disappear as quickly as they surfaced, but there are still options to pay the mortgage with a credit card each month free of charge.

The difference today is that this method/idea is more about earning credit card points (or cash back) for paying your hefty mortgage payment, not so much about simply paying it.


Let me preface this by saying it makes no sense to pay your mortgage with a credit card if you can’t afford to pay it otherwise.

The only purpose of this method is to earn points and/or cash back as you would on other purchases made with a rewards credit card.

You Can Pay Your Mortgage with American Express Serve


Perhaps the easiest method I know of involves American Express Serve, which is referred to as a reloadable prepaid account.

In reality, it basically works like an online bank account in that you can transfer/load money to it and then pay everyday bills or make purchases with the associated prepaid card.

Let’s focus on that paying bills part. Your mortgage is a bill and it must be paid each month until maturity, just like other recurring bills.

But loan servicers don’t give homeowners the option to pay with a credit card (for good reason!) unlike most other bills.

The Serve method entails loading the account with a credit card, and then using the funds to pay your mortgage. I suppose you can use a debit card as well if it earns rewards.

The purpose of this is to get rewards on that large amount of money spent, so if the credit/debit card doesn’t earn rewards, there’s no point in doing this.

And you need to pay off your credit card in full each month to avoid any interest or fees to offset the benefit of doing it to begin with.

A couple warnings/issues with this method:

– You need to make sure your credit card issuer doesn’t charge fees to load Serve (American Express warns of this possibility on the website)
– The max you can load with a credit or debit card each month is $1,000 ($200 per day)
– The limit increases to $1,500 a month ($500 daily) if you get Serve with Softcard, formerly known as Isis Wallet
– You actually need to pay off the credit card charges to avoid interest/fees

As noted above, you can load your Serve account with a credit card, but even American Express warns that you could be charged fees by your card issuer for doing so.

I’ve used a Chase credit card and there was no fee or issue. It just showed up as a standard purchase.

But to avoid any mishaps, testing with a small amount or asking your credit card issuer to lower your cash advance limit to zero (or as low as possible) might be a good idea before giving it a whirl.

Once the necessary funds are in the Serve account, you’ll be able to see your available balance. Assuming it’s sufficient to cover your full mortgage payment, you simply select “Pay Bills” from the dropdown menu then add a payee.

While certain payees are already in Serve’s system, you’ll likely need to add your loan servicer manually, including their address and your loan number.

It should be the address where you would send a paper check because Serve is basically cutting a physical check on your behalf. It’s essentially a bill pay service. This is exactly why it works.

You’re not actually paying your mortgage with a credit card – rather, you’re funding an account with a credit card then sending those funds to your servicer via check, a much more accepted form of payment.

Once you save the payee information, you can make your mortgage payment via Serve each month. There’s even a memo section where you can write your loan number and any other details to ensure the payment is processed properly.

Note that payments can take several business days to process, so it’s not as quick as making a payment online. Fortunately, mortgage due dates are fairly flexible. But you’ll want to give yourself a cushion to avoid paying late if anything goes wrong.

The Downside to This (or Any) Method


While it’s kind of cool to pay your mortgage with a credit card, it does require some work, as noted above. And if you have a jumbo mortgage payment, this method probably won’t work very well given the low funding limits.

You certainly won’t want to send partial payments and find out that your loan servicer paid down your principal or simply returned your check.

Sure, you can load money from a credit card and bring in the shortfall from a checking or debit card, but at that point it might not be worth your time and energy.

After all, how much will you really “earn” from using a credit card. If your monthly mortgage payment is $1,000 a month, this method should work out okay.

But that would only equate to 12,000 points or miles annually, which is worth maybe $120 or slightly more if redeemed for travel or something more lucrative.

The earnings could also be used to pay down your mortgage a little bit faster if you put it toward the principal balance.

In that sense, it could be worth it. Just be careful not to miss a mortgage payment in the process.

source:  thetruthaboutmortgage.com

Credit Card Mistakes That Can Keep You From Getting a Mortgage

If you’ve worked consistently for the past two years, and you’ve been saving your pennies for a downpayment and closing costs, you may feel nothing can stand in your way of qualifying for a mortgage. And in all likelihood, you’re the ideal candidate.

However, what you may not realize is that certain credit card habits can stop a mortgage approval in its tracks. Not to say you can’t get a loan, but a bank may hold off approving your application until you get a handle on your credit cards. Here’s a look at five credit card mistakes that hurt your chances of buying a home.

1. Maxing out your credit cards

Unfortunately, making minimum credit card payments might not be enough to qualify for a mortgage loan. The lender looks at your entire credit history, and if you have maxed out credit cards, this raises your debt-to-income ratio and impacts whether you’re able to qualify for a mortgage, or how much you receive from a bank.

Basically, the bank calculates the percentage of your monthly debt payments and compares this figure with your gross income. If your credit card payments are higher due to maxed out accounts, your debt-to-income ratio may exceed what’s allowed by the lender, and the bank may not approve your application until you’ve paid off some of your accounts.

To avoid this problem, pay off credit cards every month, and make sure your balances do not exceed 30 percent of your credit line.

2. Past due accounts
You credit history might be stellar today, but if any credit card accounts have been 30 days or more late in the past 12 months, a mortgage lender may not approve your application at this time. It only takes one or two recent delinquent accounts to delay a home purchase.

Lenders are cracking down on late payments, and they typically allow no more than one or two 30-day late payments in a 12 to 24-month period (based on the type of mortgage).

3. Closing credit card accounts

If you’re weaning yourself off credit cards, you might close accounts to avoid additional debt. In hindsight, this is a good plan. But unfortunately, closing a credit card account can increase your credit utilization ratio, which can also drive down your credit score.

Credit utilization ratio is your total available credit in relation to your total credit lines. Let’s say you have two credit cards each with a $1,000 credit line (a total credit line of $2,000). One credit card has a $1,000 balance, and the other card has a zero balance. In this case, your credit utilization ratio is 50 percent, since you’re using half your total available credit.

In an effort to control spending, you might decide to close the account with a zero balance. Unfortunately, closing this credit card account increases your credit utilization from 50 percent to 100 percent — in other words, you’re now using 100 percent of your available credit, and your credit score will suffer as a result. The way credit scoring models work, the wider the gap between your balances and available credit, the better. Even if you decide not to use a credit card, it’s often better to keep accounts open.

4. Applying for too many accounts

Applying for too many credit cards doesn’t look good from a lender’s standpoint. When lenders check your credit history, the bank also looks at your number of recent credit inquiries. If you’ve applied for multiple credit cards in the span of just a couple of months, the bank may think you’re experiencing some type of financial hardship and in desperate need of credit.

Plus, each inquiry can reduce your credit score by approximately two to five points and they stay on your credit report for two years.

5. Being an authorized user

As an authorized user, you have permission to use another person’s credit card. The problem is that this credit account also appears on your credit report. Any action by the primary accountholder person—whether good or bad—affects your credit.

So, if the primary account holder pays the statement late or maxes out this credit card, this can hurt your credit score and make it harder to qualify for a mortgage. If you’re thinking about purchasing a house, request to have your name taken off any accounts where you’re an authorized user. Unfortunately, this doesn’t work if you’re a joint owner on the account.

The Bottom Line?

Buying a home is a big step. If you’ve spent years preparing for this move, don’t let bad credit card habits wreck your dream. If you use credit wisely and avoid maxing out your accounts, you’ll have a better chance of qualifying for a mortgage.

source: totalmortgage.com

These 4 bits of credit card data can identify most anyone

MIAMI - Just four bits of information gleaned from a shopper's credit card can be used to identify almost anyone, suggesting that even anonymous big data sets can breach individual privacy, researchers said Thursday.

The study in the journal Science crunched three months of credit card records for 1.1 million people in an unidentified industrialized country.

Ninety percent of individuals could be uniquely identified using just four pieces of information, such as where they bought coffee one day, or where they purchased a new sweater or pair of shoes.

In other words, credit cards use was just as reliable at identifying someone as mobile phone records, the study said.

Knowing the price of a transaction could boost the risk of re-identification by 22 percent.

"Even data sets that provide coarse information at any or all of the dimensions provide little anonymity," said the study led by Yves-Alexandre de Montjoye at the Massachusetts Institute of Technology (MIT) and colleagues at Aarhus University in Denmark.

Even if some of the specifics were stripped from credit card data, such as noting the general area where a purchase was made instead of the specific shop, or expanding the time range to 15 days instead of one, a person who would have believed themselves anonymous could be re-identified with "just a few more additional data points," said the study.

"Women are more re-identifiable than men in credit card metadata," it added.

People with higher incomes were also easier to identify, perhaps because they "have distinctive patterns in how they divide their time between the shops they visit," added the study.

The researchers called for more advanced technologies to protect data that is simply made anonymous.

source: www.abs-cbnnews.com

Ever heard of 'pay later' installment plan?

MANILA, Philippines - One of the biggest joys of owning a credit card is being able to pay for items on installment basis. “Gives” or amortized payments are quite attractive to salaried employees who have a steady source of income and can predict how much they can afford to pay over a certain period.

Thanks to installment terms, credit cardholders can have, say a new television and pay only 1/12, even 1/24 of the cost. Just swipe that plastic and start watching your favorite shows in the biggest screen and best resolution your credit card can buy. What’s more, special promotions like 0% installment schemes have really made deferred payments quite irresistible.

But wait – credit cards have also began offering Pay Later. Should you bite?

Before you start shopping, it might be helpful to first understand the three payment schemes being offered out there.

1. Zero percent interest installment plan.

This is probably one of the best installment plans available in the market today, since it allows you to pay for your transaction in equal tranches without having to pay for interest. However, it may not cover all kinds of transactions and may not cover all the products sold in a store so check before you swipe.

2. Regular installment plan.

In this scheme, payments can be spread out over a period of time, with interest charges. The interest may vary depending on the length of the transaction and from one credit card issuer to another.

3. Pay later installment plan.

Under this plan, the monthly installment due on the transaction and the monthly interest will be billed to the cardholder starting on as late as the third monthly billing statement cycle after the original transaction date. This means that if you do your shopping in December, you will be making payments only in March, instead of January. This is a great option to use if you know that your cash flow for the immediate term will be tight.

Now that you know your options, here’s how to use these deferred payment schemes to get the most bang for your buck:

Forecast your cash flow.

Before any purchase, make sure to consider your cash flow. How much can you realistically afford to pay in a month for your purchase? Remember that if you opt for a shorter payment term, you will pay less interest but higher monthly costs. While a longer tenor will be easier on your pocket, it can also incur higher interest.

Choose the plan that is best for your needs.

Assuming all of the above options are available, consider which of the different installment schemes being offered matches your requirements. If you have a cash flow concern and would be more comfortable making your first installment payment in the future, instead of next month, then avail of the pay later installment plan if it is available. If you are more concerned about the amount of interest that you will have to pay, then the zero percent interest plan is appropriate for your needs. If you would rather spread out payments over a long period and are willing to pay interest charges, then check out the regular installment plans.

Set a budget.

It’s tempting to shop when you know that you can defer payment and pay in installment. However, all these transactions do add up. If you lack discipline or planning, using the deferred payment option could lead you to overspend and may break your budget. Whether it’s zero percent or regular installment, even pay later – don’t forget, you still need to pay.

Ask and you will receive answers.

If you are unclear about the terms of the installment plan that you have chosen, do not hesitate to ask for an explanation from the merchant or the issuer of your card. By asking, you may even come across other payment options that are more attractive and practical for you.

Watch out for seasonal promotions.

Occasionally, credit card issuers offer promotions where they further sweeten the deals that they offer. Discounted products or services may be offered on installment, or gifts with purchase, or your credit limit may even be increased. If you enjoy shopping on installment, make sure you keep an eye out for these offerings from time to time.

Department stores, groceries, car dealers, service centers, and boutiques, among many others, now offer Pay Later options so make sure to check your payment options before you make the purchase to get the best value for your hard earned money.

source: www.abs-cbnnews.com

Using your credit card this holiday season? Read this first

MANILA -- A representative from the Bangko Sentral ng Pilipinas (BSP) explained several things that a credit card holder should know before using it to shop this holiday season.

In an interview on radio DZMM, Atty. Prudence Angelita Kasala, deputy director of the Financial Consumer Protection Department of the BSP, explained that there is an existing "one price tag policy" for all merchants.

Under this policy, merchants should display a single price for items, regardless of the mode of payment the consumer will use.

This policy prevents merchants from discriminating consumers who use cash, and those who use their credit cards.

However, Kasala admitted that not all merchants follow this policy.

"Actually, bawal 'yan. Ang ginagawa kasi nila, kasi dapat pareho lang ang presyo, sasabihin nila kapag cash, discount 'yan. Dapat hindi pinapayagan 'yun eh, pero 'yung kliyente, siguro nga dahil may discount, hindi na sila umaalama," she added.

She also explained that merchants should not pass on the charges to the card holders.

According to Kasala, there are 8 million credit card accounts in the country for 2014. The number has increased from 7.4 million accounts last year.

When asked whether this is a good sign, Kasala explained that there are conflicting views when it comes to household credit.

"May iba't ibang pananaw diyan ano, kasi sinasabi nila na household credit as a percentage of the GDP is indicative also of economic growth," Kasala said, adding that compared to other Asian countries, the Philippines has the lowest percentage of consumer debt in its gross domestic product (GDP).

Kasala also explained that it is not bad to have debts, as long as one has the capability to pay, is aware of when to pay, and knows how much to pay.

"Convenient siya at meron kang parang interest free period, kasi kung binabayaran mo siya everytime na nag-due date siya nang buo, wala kang interes na babayaran. So kunyari, depende sa cycle, billing cycle mo, pwede kang makakuha ng as long as 51 days na interest free, so malaking tulong yan sa'yo sa pagmamanage ng finances," Kasala said.

The BSP has also prohibited banks from issuing pre-approved credit cards, adding that banks should first determine if an applicant is capable of paying debts before issuing a credit card.

"Bago ka mabigyan ng credit card, aalamin muna ng credit card issuer na meron kang kakayahan magbayad," Kasala said.

Kasala explained that there is no provision in the Constitution that can send debtors to jail.

"Hindi ka pwedeng ikulong kasi wala naman sa Constitution natin, walang pagkakulong dahil sa hindi pagbabayad ng utang."

However, someone who does not pay his or her credit card debts can still be sent to jail, if they are proven guilty of violating Republic Act 8484, or the Access Devices Act.

"Kapag hindi ka nagbabayad ng utang sa credit card, tapos nagpalit ka ng address, pwede kang makulong kasi may intention to defraud ka," Kasala added.

Once proven guilty, one will have to pay a fine of P10,000, and will be imprisoned for six to 12 years.

To avoid too much credit card debt, Kasala said one should not use the credit limit as basis of how much one should spend.

"Hindi mo dapat ginagamit na batayan 'yung credit limit sa ginagastos mo, kasi ang credit limit, di hamak na mas mataas sa kinikita mo," she added.

source: www.abs-cbnnews.com

Three Unique Ways to Pay Your Mortgage

If you’re a homeowner, you know the importance of making regular monthly payments. This protects your credit score, and helps maintain a good relationship with your mortgage lender. However, if you start to experience payment problems, or if you want to pay off your mortgage sooner, options are available to you. The truth is, there are many creative, unique ways to pay your mortgage — and most ways are financially beneficial. 

1. Rent a room in your home as office space
Maybe you’re not comfortable with the idea of getting a roommate. However, if you have free space or an empty room on the property, consider renting this space as office space.

Some home-based business owners seek a separate office space for work, especially if they have young children at home and find that it’s too difficult to concentrate. They might not be able to afford space in an office building, but they may have resources to rent space in a converted garage, a finished basement or a detached room on your property that’s suitable for an office.

You can rent your extra space on a monthly basis, and then use funds to help cover your mortgage payment if you’re having difficulties. Since this money counts as rental income, set aside about 20 percent to 25 percent for income taxes.
 
2. Use a credit card to pay your mortgage

The idea of using a credit card to pay your mortgage may sound scary, but this method has its benefits. It’s an opportunity to accumulate credit card reward points faster.

If you have a credit card with a rewards program, then you probably know that you can earn miles or points for every dollar you spend. Once you’ve earned enough points, you can redeem these for flights, hotels, gift cards, merchandise, cash or statement credit. However, to benefit the most from a rewards program, you have to use your card often.

Some banks do not accept credit card payments, such as Bank of America. So, speak with your mortgage lender to see if this is an option. If you use a credit card to pay your mortgage, make sure you immediately pay off this charge. Don’t charge your mortgage and then carry the balance from month-to-month.

3. Pay half your mortgage every two weeks

You might be unable to afford a 15-year or a 20-year mortgage. Even so, if you’re adamant about paying off your home sooner, consider a bi-weekly payment schedule.

Speak with your lender to see if they’ll accept bi-weekly payments. If so, you’ll pay one half of your mortgage payment every two weeks. This is the equivalent of one extra mortgage payment a year — which may not appear to make a difference. However, one extra mortgage payment a year reduces your total interest charges and reduces your mortgage term by seven or eight years.

Bottom Line:
Getting creative with your mortgage is one of the fastest ways to eliminate the debt sooner. And if you’re having payment problems, creativity can help you drum up cash and keep your mortgage loan in good standing.

source: totalmortgage.com

It can happen to anyone: Obama's credit card declined

WASHINGTON - Apparently, even the president of the United States can have trouble with his credit card.

Barack Obama on Friday said his card was declined at a New York restaurant he went to while visiting the United Nations.

"I was there during the General Assembly, and my credit card was rejected," Obama said at the Consumer Financial Protection Bureau, where he unveiled new measures to stem credit card fraud and identity theft.

"It turned out, I guess I don't use it enough. So they thought there was some fraud going on," he said to laughter, adding "fortunately, Michelle had hers."

The president signed an executive order which adds "chip-and-pin" protection for US government cards and payment terminals, at a time when the financial industry is moving in the same direction.

"I was trying to explain to the waitress, no, I really think that I've been paying my bills," Obama said.

"Even I'm affected by this."

source: www.abs-cbnnews.com

Twitter, French bank team up for money transfers via tweets

PARIS/FRANKFURT - One of France's largest banks is teaming up with social network Twitter Inc. this week to allow its customers to transfer money via tweets.

The move by Groupe BPCE, France's second largest bank by customers, coincides with Twitter's own push into the world of online payments as the social network seeks new sources of revenue beyond advertising.

Twitter is racing other tech giants Apple and Facebook to get a foothold in new payment services for mobile phones or apps. They are collaborating and, in some cases, competing with banks and credit card issuers that have run the business for decades.

The bank said last month it was prepared to offer simple person-to-person money transfers via Twitter to French consumers, regardless of what bank they use, and without requiring the sender know the recipient's banking details.

"(S-Money) offers Twitter users in France a new way to send each other money, irrespective of their bank and without having to enter the beneficiary's bank details, with a simple tweet," Nicolas Chatillon, chief executive of S-Money, BPCE's mobile payments unit, said in the statement.

Payment by tweets will be managed via the bank's S-Money service, which allows money transfers via text message and relies on the credit-card industry's data security standards.

BPCE and Twitter declined to provide further details ahead of a news conference in Paris on Tuesday to unveil the service.

Last month, Twitter started trials of its own new service, dubbed "Twitter Buy", to allow consumers to find and buy products on its social network.

The service embeds a "Twitter Buy" button inside tweets posted by more than two dozen stores, music artists and non-profits. Burberry, Home Depot, and musicians such as Pharrell and Megadeth are among the early vendors.

Twitter's role to date has been to connect customers rather than processing payments or checking their identities.

"From the Twitter point of view, there is a limit to their appetite for getting involved in payments processing itself," said Andrew Copeman, a payments analyst with financial services research firm AITE Group, who is based in Edinburgh, Scotland.

"At the moment, banks are probably viewing Twitter and other social media networks as marketing channels to reach a wider set of their customers and to extend the bank's existing mobile banking initiatives," he said.

Twitter's success in developing additional services on its platform as Facebook has done will be key to its future profitability. Rakuten Bank in Japan offers a similar "Transfer by Facebook" service that lets users of its mobile banking app send money to anyone in their Facebook friends list.

Investors have been worried about Twitter's slowing user growth, sending the shares down about 17 percent this year, while rival Facebook's have climbed 35 percent.

Thomas Husson, a marketing strategy analyst with Forrester Research, said Twitter was likely to multiply efforts to explore new ways to generate revenue with banks and credit card firms.

"Twitter wants to more explicitly demonstrate the overall value of its network as an advertising platform," he said.

source: www.abs-cbnnews.com

What to do if your credit card bill has errors

MANILA, Philippines -- The first thing you should do when you get your credit card statement is to carefully check it against your records.

But what do you do when you find a "charge" that you didn't make?

ANC On The Money's resident financial adviser Salve Duplito said to contest your credit card billing, just call your bank's hotline and make a complaint.

The bank will investigate your complaint by looking at the signature used in the transaction. If the investigation showed there was indeed a fraudulent transaction or a system error, the bank will reverse the charges.

Alex Ilagan, executive director of the Credit Card Association of the Philippines, said most banks would temporarily reverse the charges as soon as you complain. This would mean you will not incur any interest and penalties while the investigation ins on-going.

Banks' investigations usually take some time. One possibility is another bank processed the transaction, which means your bank would need to coordinate with the other bank.

Duplito said the process can also become more complicated if the charges were incurred overseas.

She also reminded cardholders not to delay their complaints, or else the window where they can contest the charges will close.

"You must call the bank within 2 weeks after the statement date. Most cardholders get their billing statement a week after the statement date, so you only have effectively around a week to make sure your statement is accurate," she said.

Duplito said she did an informal survey and found most people don't check their credit card billing statements.

"What's alarming about this is the anecdotal increase in credit card fraud recently. If you were victimized by fraudsters and you didn't check your billing, you just keep on paying for their shopping sprees and not know it," she said.

Ilagan said it is every cardholder's responsibility to double check their bills and correct tghem if there are any errors.

He said the most common problem of cardholders is failing to recognize the company name on credit card bills. Some merchants use a different company name in billing statements, which add to the confusion.

Duplito suggested cardholders create a "budget tracking system" to keep track of their expenses, including credit card transactions. This will make it easy to double-check the accuracy of your billing statement at the end of the month.

However, it's a different case if you lose your credit card and charges were made before you discovered this and reported it to the credit card company.

"Card companies must simply waive charges for all errors and fraudulent transactions even before a card is reported as stolen. After all, they reversecharges from a card victimized via skimming. That's almost teh same as somebody stealing your card from you physically," Duplito said.

Most of these problems are likely to lessen when credit card companies shift to a chip-based or EMV cards, but this will happend in 2017.

She noted hybrid-EMV cards are still be vulnerable to fraud, so the only way to go is purely EMV cards.

"Closely watch which banks and merchants truly walk the talk of valuing their customers. Those are the companies that will put their money where their mouths are and be the first to shift to a purely chip-based card," she said.

source: www.abs-cbnnews.com