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16 million credit cards purchased in FY 2023-24, UPI payments up by 42%: PwC report

<keyword id="20599258" type="General" weightage="20" keywordseo="Indian-consumers" source="keywords">Indian consumers</keyword> demonstrated a significant increase in their <keyword id="21084888" type="General" weightage="100" keywordseo="credit-card-spending" source="keywords">credit card spending</keyword> in July this year, marking a 19% increase compared to the same month last year. According to a report released by <keyword id="19945737" type="General" weightage="20" keywordseo="SBI-Securities" source="keywords" meta.keywordsubtype="org" meta.entityname="SBI Securities" meta.hostid="261" meta.entityid="SBI Securities">SBI Securities</keyword>, the total expenditure by credit card users across the country reached an impressive Rs 1.7 trillion. This substantial uptick highlights the growing reliance on credit cards for transactions, reflecting broader economic trends and <keyword id="20740758" type="General" weightage="20" keywordseo="consumer-confidence" source="keywords">consumer confidence</keyword>. The report also highlighted a considerable increase in <keyword id="21118324" type="General" weightage="20" keywordseo="transaction-volumes" source="keywords">transaction volumes</keyword>, which surged by 39% year-on-year, reaching a total of 38.4 crore transactions in July 2024. This increase in the number of transactions underscores the widespread adoption and usage of credit cards as a preferred <keyword id="20632158" type="General" weightage="20" keywordseo="payment-method" source="keywords">payment method</keyword> among Indian consumers. "Credit card spending in India increased 19% YoY to Rs 1.7 trillion in Jul'24. The transaction volume during the month was 38.4 crore, up 39% YoY" said the report. The report also noted that among the banks, <keyword id="19895995" type="General" weightage="20" keywordseo="HDFC-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Bank" meta.hostid="261" meta.entityid="HDFC Bank">HDFC Bank</keyword> emerged as the leader in terms of transaction volumes, with its credit cards facilitating 9.9 crore transactions during the month. <keyword id="19900482" type="General" weightage="20" keywordseo="ICICI-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="ICICI Bank" meta.hostid="261" meta.entityid="ICICI Bank">ICICI Bank</keyword> followed closely with 7.1 crore transactions, while SBI secured the third position with 6.3 crore transactions. In terms of transaction value, HDFC Bank again led the way, with a total spend of Rs 44,369 crore through its credit cards in July. ICICI Bank and SBI followed with Rs 34,566 crore and Rs 26,878 crore, respectively. The report said "In Jul'24, transaction volumes was led by cards issued by HDFC Bank (9.9 crore) followed by ICICI Bank (7.1 crore) and SBI (6.3 crore)". Additionally, the <keyword id="22988051" type="General" weightage="20" keywordseo="average-transaction-value" source="keywords">average transaction value</keyword> (ATV) also saw a marginal increase of 1.4% month-on-month in July 2024. This marks the first increase in ATV in ten months, suggesting a shift in consumer behaviour towards higher-value transactions after a period of stagnation. Overall, these figures reflect the growth of credit card usage in India, driven by increased consumer confidence and the convenience offered by credit card transactions.

Indians credit card spending increases 19% YoY to Rs 1.7 trillion in July 2024

India has witnessed the fastest jump in alternative payment share for <keyword id="21422684" type="General" weightage="100" keywordseo="e-commerce-payments" source="keywords">e-commerce payments</keyword> in the <keyword id="20122305" type="General" weightage="20" keywordseo="Asia-Pacific-region" source="keywords">Asia-pacific region</keyword> from 20.4% in 2018 to 58.1% in 2023 as per a report by GlobalData, a data and analytics company. Options for payment other than traditional cash include <keyword id="19900911" type="General" weightage="20" keywordseo="UPI" source="keywords">UPI</keyword>, <keyword id="6354770" type="General" weightage="20" keywordseo="debit-cards" source="Orion">debit cards</keyword> and <keyword id="6387037" type="General" weightage="20" keywordseo="credit-cards" source="Orion">credit cards</keyword> among others. "This significant uptake of alternative payment solutions can be attributed to the widespread usage of <keyword id="21223853" type="General" weightage="20" keywordseo="mobile-wallets" source="keywords">mobile wallets</keyword>, largely driven by UPI, which facilitates mobile payments in real-time simply by scanning <keyword id="19993724" type="General" weightage="20" keywordseo="QR-codes" source="keywords">QR codes</keyword>," GlobalData report elaborated. The report highlights that in the Asia-Pacific (APAC) region, the payment solutions such as mobile and digital wallets have displaced traditional payment methods like cash and bank transfers for e-commerce payments. The report states that such alternative payments are already immensely popular in countries like <keyword id="1334" type="General" weightage="20" keywordseo="china" source="Orion">China</keyword> and India and are also gaining traction in other APAC markets as well. However, China led the way in 2023, with alternative payments accounting for nearly two-thirds of the total e-commerce payments value in 2023 that took place in the entire Asia Pacific region. However, India is also not far behind, with a significant surge in alternative payment methods since 2018. The e-commerce analytics by the company revealed that even traditionally cash-intensive countries in APAC such as the Philippines, Malaysia, and Indonesia, are witnessing a similar trend. "While most Asian markets are traditionally cash-dominated, the adoption of alternative payment methods for both online and in-store payments is growing across many markets in the region, even outpacing the West. This trend is driven by the rising smartphone and internet accessibility, increasing convenience of electronic payments, and the proliferation of mobile and QR code-based payment solutions" said Shiv Gupta, Senior Banking and Payments Analyst at GlobalData. The report also highlights that within the Asia-Pacific region, China and India have a higher adoption rate of alternative payment methods as compared to their peers. According to the company's 2023 Financial Services Consumer Survey, alternative payment solutions account for more than 65% of the e-commerce transaction value in China, the largest e-commerce market globally. It represents a significant increase from 53.4% in 2018. Other Asian markets like Indonesia, Hong Kong, Singapore, and the Philippines are also seeing higher adoption of alternative payment solutions. "Alternative payment solutions accounts for lion share in e-commerce markets across many APAC countries, supported by rising internet and smartphone penetration, and growing acceptance of digital payments by merchants. With the convenience, speed, and security they offer, coupled with high expected growth in the overall e-commerce market in the region, these payment tools are anticipated to further gain traction and disrupt the consumer payment space in the region" said Gupta.

India's non-cash payments on e-commerce platforms surge to 58.1% in 2023

Lana Linge has $42,000 in credit-card debt, but it's not the giant tab that has her most frustrated.The 29-year-old says she takes full responsibility for her debt. After getting her first credit card in her early 20s, Linge accumulated small amounts of debt but was always able to pay it off. That changed in 2020: Linge struggled with managing her spending on necessities and other items, like clothes, while in isolation, causing her bills to grow. Things got worse after she lost her job this past October, and she eventually depleted her savings to keep up with the payments on her card."I know for a lot of people, they're in debt because of these freak things that are outside of their control," Linge tells me. "The reason that I'm in debt primarily is from overspending, and I don't try and negate that in any way."Overwhelmed, Linge is going through the painful bankruptcy process to discharge the debt. Looking back, she regrets not paying more attention to the details of her card's interest rate. Wooed by the rewards and perks the companies were offering, Linge signed up for a card with an interest rate she says ballooned to over 20%. The growing interest payments meant that even as she worked to get her spending under control, the bills kept growing.Linge's experience may be on the extreme end of America's personal finance journeys, but she isn't alone in her interest-rate woes. Consumers are always looking for deals, and it's easy to be swayed by credit-card companies offering glitzy rewards and points. As Adam Rust, the director of financial services at the Consumer Federation of America, told me, issuers are "putting the sizzle before the steak." But many of these cards come with high rates and hidden fees, and by the time consumers realize just what they signed up for, credit-card companies have raked in the profits."Credit-card companies can get away with charging high rates of interest because consumers aren't necessarily paying attention and marketing doesn't focus on that," he said.The average credit-card interest rate is now just over 21%, up from about 15% a decade ago. More importantly, the gap between the interest rate that credit-card companies pay banks that oversee their business and the one they charge you is the widest it has been in nearly 30 years. Even with existing regulations and the recent interest-rate cuts from the Federal Reserve, credit-card companies have the power to exploit consumers, and people with growing debt piles have few avenues for relief. Additionally, as credit-card companies continue to charge high interest rates, more cardholders in debt become delinquent — and that could push the US economy closer to recession."What we're seeing from the data shows a rapidly deteriorating financial landscape for Americans," Bruce McClary, a senior vice president at the National Foundation for Credit Counseling, tells me, "with a lot of people teetering on the brink of severe financial crisis."<h2 id="ddbac9bc-8e83-4317-902e-7a4e1408e665">The squeeze is on</h2>Americans have a lot of debt piled up on their little pieces of plastic. The Federal Reserve Bank of New York said in August that Americans owed a record $1.14 trillion on their credit cards in the second quarter and that balances increased by $27 billion from the same period a year ago, a 5.8% jump. TransUnion says the average credit-card balance per debtor stands at $6,329, up by 4.8% from a year ago. Most worryingly, according to the New York Fed, the percentage of people who had fallen more than 90 days behind on their payments climbed to 6.4% by the end of 2023, up from 4% at the end of 2022. Austan Goolsbee, the president of the Federal Reserve Bank of Chicago, described those rising delinquencies as "uncomfortably high" and a "warning sign" for the economy.This may be worrying news for average households and the US economy, but it is wonderful news for the credit-card companies. Credit-card issuers make money in a few ways, but one of the most important is interest payments. When a customer doesn't pay off their full balance each month, they pay interest that the credit-card company collects, so increasing interest rates is an easy way to bring in more profit. To better understand the strength of the credit-card industry, look at the split between the federal funds rate — the interest rate at which banks make very short-term loans to each other, which is also used as the benchmark for almost every other type of loan — and the average credit-card interest rate. Data from the St. Louis Federal Reserve indicates the difference between the rates is at a nearly three-decade high, suggesting credit-card companies feel free to charge high interest rates regardless of what the Federal Reserve does with the federal funds rate."We should never lose sight of just how profitable credit cards are," Rust says. "You've got interest, you've got interchange, you've got late fees; credit-card companies are making so much money."The Consumer Financial Protection Bureau estimated in February that major credit-card companies earned about $25 billion in additional interest revenue in 2023 by raising their annual-percentage-rate margins, or the difference between the APR and the interest rate set by banks, known as the prime rate. It also found that major issuers raised the average margin by 4.3 percentage points over the past decade, to an all-time high. Using data on how Americans deploy their cards to paint a representative picture, the CFPB estimated that the margin increase cost the average consumer with a balance of $5,300 more than $250 in 2023. On top of that, the bureau's 2023 report to Congress on the credit-card market said companies charged consumers over $105 billion in interest in 2022, helping boost the profit margin for these companies to 5.9% from 4.5% in 2019.These staggering numbers are made possible by the tactics that credit-card companies use to lure in new customers. Antoinette Schoar, an economist at MIT who coauthored a paper examining credit-card companies' use of behavioral biases to acquire customers, says companies use data to determine a prospective customer's education and income levels and will tend to offer products with hidden fees and high rates to people with lower educational attainment and income. For example, a company might advertise a 0% APR, but the consumer might not realize that that rate can't last forever, leading them to take on balances higher than they can afford to pay off. She says that while the tactics companies use to appeal to certain consumers can lead to high balances and credit-card debt, the companies aren't the only ones to blame — government regulations to prevent this kind of misleading marketing by credit-card companies could force the companies to compete by offering customers a better deal."We need better regulation so that the card companies are competing on the right dimensions and not on increasing convolution or increasing confusion to their customers," Schoar says.<h2 id="a19bffcc-ffc0-46bd-9211-4a8e68d3409d">'The highest credit-card rates we've ever seen'</h2>Until 1978, most states had laws capping interest rates for credit cards and consumer products. But a Supreme Court decision that year allowed banks to charge whatever interest rate they wanted if they were headquartered in a state without a usury law. This inspired a race to the bottom, with states like South Dakota and Delaware doing away with their laws in order to attract more business from banks. The industry ended up with, as David Silberman, a senior fellow for the Center for Responsible Lending, put it, virtually "no legal constraints on the interest rate they charge." Lawmakers have tried to rein in the industry — for instance, the CARD Act, enacted in 2009, required card issuers to notify consumers of interest-rate increases at least 45 days in advance and put restrictions on things like late fees and withdrawal fees. The legislation, however, didn't cap interest rates or rate increases. Lowering the current high interest rates, and the profits that come with them, has become a priority across the aisle. GOP Sen. Josh Hawley introduced a bill in 2023 that would cap interest rates at 18% and impose penalties on companies that violate the cap. "Americans are being crushed under the weight of record credit card debt—and the biggest banks are just getting richer," Hawley said in a statement, adding that "capping the maximum credit card interest rate is fair, common-sense, and gives the working class a chance." Democratic Sen. Elizabeth Warren brought up the issue during a Senate hearing in May, saying credit-card companies had "grown their profits through interest and fees."The Federal Reserve cut its benchmark interest rate in September after holding it steady for over a year, but credit-card holders with high interest rates won't feel any relief off the bat. Michele Raneri, a vice president and head of US research and consulting at TransUnion, told me that's because consumers have to pay off their balances at the interest rate in place when they accumulated the debt, so the lower rate wouldn't apply."It'll take a while for the consumer to realize the benefit of it," Ranieri says.The high inflation of the past few years has also made it easier for consumers to fall into credit-card debt. Ted Rossman, a senior industry analyst at Bankrate, described the feedback loop of high prices and high interest rates as "a tough cycle to break." Credit-card companies know what they need to do to maximize profit: If they offer rewards and bonuses up front, they can snag new customers before they realize the high rates they're signing up for. Profits keep rolling in for issuers, while consumers fall further behind.<a target="_blank" rel="" href="https://www.businessinsider.com/author/ayelet-sheffey">Ayelet Sheffey</a> is a senior economic policy reporter on Business Insider's economy team.

Credit card companies are ripping you off like never before

<ul class="summary-list"><li>21-year-old Skylar Griffin has four credit cards, including and AmEx Gold and Platinum.</li><li>She got her first credit card as a freshman to build up her credit score and kept a strict budget.</li></ul>This as-told-to essay is based on a transcribed conversation with Skylar Griffin, a 21-year-old college student in Georgia. Griffin financial claims have been verified with documentation. The following has been edited for length and clarity.When I was a child, my mom often shared financial advice. She told us never to cosign for someone's loan and don't buy anything unless we could buy it twice.On several occasions, she advised us kids never to get a credit card unless we were responsible enough to pay it off each month.She didn't want us to struggle financially like she did as a single parent.In high school, I started watching YouTube videos about finances. I saw financial struggles firsthand, and I didn't want to be in that position as an adult. The videos taught me I'd need to build up my credit score to buy a car or a house or if I might need a loan.<h2 id="102ef261-a63c-412a-8936-6e2d5bc894d4">I got my first credit card before going to college</h2>In July 2021, I was preparing to study business management at Columbus State University in the fall. Without my mom's knowledge, I ordered a Bank of America student card. It was a Visa card with no annual fees. My mom wasn't happy. I reassured her I'd done my research and could handle the responsibility.During college, I worked at a call center during the school year, paid internships in the summer, and received refund checks because my scholarship was more than school costs. I also earned a bit of money doing social media content.My first card had a limit of $500. I would buy little things here and there, making sure I had enough in my checking or savings account to pay it off each month. I'd marked all the due dates in my calendar, and I was never late for a credit card payment. There were temptations to buy new clothes or tech, but I always fought it.<h2 id="fc7cfef9-313f-436d-be60-a1a46519f707">Getting an AmEx for the travel points</h2>I kept using the Bank of America card throughout my freshman and sophomore years of college, but in April 2023, I decided to take out an Amex Gold card as well.I'd heard about travel credit cards through watching financial advice videos online. If I used this card for buying groceries or dining out, my two main expenses in college, I would get four times the points to use on travel. Although I wasn't traveling much, I planned to travel. At the time, the card had a $250 annual fee, which was worth it for the points I felt.I only used my card for things I needed or had saved for. I never bought things just to earn points.In March 2024, I took a big leap and opened an Amex Platinum credit card. It comes with a high price tag — a $695 annual fee — but I thought the benefits outweighed the price. Because it was another Amex card, all of my points were added to the points earned from the Amex Gold.I only use this card for booking flights and hotels because this is what I get the highest points for. With the card, I get five times the points when booking flights and hotels, a $200 yearly airline credit, and a $200 yearly hotel credit.When I stay at Marriott or Hilton, I get 'high status' and often get my room upgraded. But my favourite perk is the CLEAR Plus membership which gets me through TSA quicker at the airport.I knew I was planning some big trips in 2024 to Japan and New York, and then a cruise to the Bahamas, so planned to make all my travel purchases on the Platinum. Since getting an Amex, I've been able to fly to Japan, New York, and Miami for free in 2024.With this card, I accessed airport lounges on the long trip to Japan and was part of the President's Circle with Hertz Car Rentals, so I was guaranteed a car upgrade when I rented a car to get around the country.<h2 id="ec2f29ef-d145-470e-972f-0e160d4e0cd5">I took out a fourth credit card so I could earn points for other purchases</h2>In June 2024, I decided to take out another Amex card — the Amex Blue Business Plus. This card means I can earn points paying for things like gas, that don't earn me points on my other cards.There's no annual fee, and I could only take it out because I'm considered a sole proprietor. I own a Mercari shop where I resell vintage clothes I find at flea markets.I only use my Bank of America card when Amex isn't accepted. I never use a debit card unless I'm pulling cash out of the bank.Even though I am confident and comfortable using credit cards, I still don't spend anything that isn't in my checking or savings account. I never base a purchase on the money that I'm expecting in my account, because you never know how finances could change.I put all my due dates in my calendar and aim to pay each of them off earlier than required. Sometimes, I feel the urge to overspend. But then I remember the interest rates on my cards, and I snap back to reality. Paying high interest because I can't afford to pay my bill in full is not worth the momentary satisfaction of shopping.In addition to all the benefits I've received when traveling, my credit cards helped me raise my credit score to 755.<h2 id="1abacec9-c073-4582-ac5e-15c3908118fc">I never stop learning about finance</h2>I think college students should consider getting a student credit card with no fee. They have low limits and can help start building a credit score. However, if you're impulsive or have poor spending habits, I wouldn't recommend it.My mom now says she's proud of how I manage my finances. I've always found personal finance interesting and the concepts easy to understand, but it takes dedication to stay on track financially. I never stop learning to make sure I'm doing what's best for my financial future.

I'm a college student who pays nearly $1,000 in annual fees for 4 credit cards. It's worth it for good credit and travel perks.

Pam's circle of parent friends likes to <a target="_blank" class="" href="https://www.businessinsider.com/how-much-kids-cost-raising-child-inflation-childcare-tax-exemptions-2024-1">split the financial load</a> when it makes sense, whether it's ordering pickup or delivery, going out for a group meal, or getting <a target="_blank" class="" href="https://www.businessinsider.com/cost-summer-camp-childcare-inflation-parents-debt-work-schedules-2024-7">tickets to a theme park or a movie</a>. But there's one dad who has recently picked up a habit that irks her: He insists on putting all their group purchases on his credit card.The gesture comes off as nice, but it ends up making extra work for Pam because she's constantly having to use apps like <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/digital-payments-apps-send-my-kids-money-2023-9">Splitwise or Venmo</a> to pay him back. Even when it would be easier if she just paid her family's part, he seems to slide his card in first. Once, when the guy was in line in front of her at a fast-casual restaurant, he waited for her to order before butting in to try to put the purchase on his card. It's not the end of the world, but Pam told me it's bothersome — especially because this dad acts like no one is picking up on what's going on. He's not doing all this out of the kindness of his heart; he's doing it because he wants the <a target="_blank" href="https://www.businessinsider.com/personal-finance/credit-cards/ways-to-use-credit-card-points-beyond-travel">credit-card rewards</a>."I overheard this person say that, 'Oh, with all of this spend on my credit card, I get 5% off this or 20% off this.' And I'm thinking, 'Oh, so this is just benefiting you,'" Pam, who lives in San Francisco and asked to use a pseudonym so the jerk in her group wouldn't know she thinks he's a jerk, told me. "I like people who are just up front versus trying to sneak things in and manipulate."Consumers love their rewards. In a recent poll from Ipsos, 71% of Americans surveyed said they had some sort of rewards, points, or cash-back card, and 80% of those with such a card said they valued their rewards. They'll cling onto those rewards even if it means a tough outcome for others: A 2019 LendingTree survey found that people were likelier to support a cap on how high credit-card companies could set their interest rates if the limit reduced access for people with imperfect credit than they were if it meant the cap would lower their rewards. Credit-card issuers and banks love rewards, too — they're a good way to attract customers.But maybe we love our credit-card rewards too much, to the point that it's making us act in less-than-ideal ways toward those we hold near and dear. Money is always complicated, and the standoff over who gets 1.5% cash back or three times the airline miles after paying for brunch is no exception. And it seems like no matter who picks up the check, everyone is a bit dissatisfied: For every Jane angry at Joe for insisting on putting everything on his credit card so he can upgrade his honeymoon to Singapore, there's a Mary fuming at Mike for shortchanging her when he paid back his part of the bar tab, making the points she got for paying the up-front cost a wash."It does seem like one of those ultimate pick-your-battles kinds of things," Matt Schulz, the chief credit analyst at LendingTree and the author of "Ask Questions, Save Money, Make More," said in an interview. "It's an awkward thing, and you just don't want to be that person who makes things uncomfortable over something like credit-card rewards."But credit-card rewards are, indeed, making things uncomfortable.Plenty of people have had the experience of the check landing after a group meal and multiple people trying to put their credit cards down so they'll earn the rewards. Usually, it winds up fine — you agree to split it, or you all decide to take turns, one person pays this time for the points, another next time. Not everyone at the table cares about maximizing their rewards, but just like some people are super into Taylor Swift or fantasy football, others are obsessed with gaming credit-card points. Whatever the case, a lot of points-related interactions can start to feel pretty icky pretty fast. Take a spin around Reddit, and you'll find all sorts of rewards-related conflicts. There are people complaining that their spouses don't want to play the rewards game, and other point obsessives weighing whether it's OK to refuse to split their rewards with their point-indifferent partners. <a target="_blank" href="https://www.reddit.com/r/AmItheAsshole/comments/108kjlj/aita_for_paying_for_my_share_of_the_trip_with/">One user asked</a> whether they should be expected to share their travel bonus with friends after booking a group trip. <a target="_blank" href="https://www.reddit.com/r/CreditCards/comments/vstsmq/paying_with_points_on_a_group_trip/">Another sought advice</a> after a friend asked whether they might be able to use their rewards to get a discount on a hotel for their group of friends. "I do have points," the person wrote, "but they are perks I get." They asked whether it might be acceptable to use their points but charge people the monetary value of the booking anyway.Jen, from Chicago, pays for everything she can to rack up rewards, and she's pretty sure it doesn't bother anyone else. "I haven't really run into anyone who's been super pissed off," she said, though she cools it in professional settings. If anything, it's a hassle for her. When traveling in a group, she's typically burdened with all the planning so that she can put all the flights and hotels on her card. Her partner refuses to get his own rewards card, which is frustrating, so she finally made him an authorized user on one of hers so at least she can get points from his purchases. "He doesn't seem to care," Jen, who asked to withhold her last name to protect her privacy, said. "Everything he gets, I get paid back."She did recently have a small dispute over points at a dinner with two longtime friends. When the roughly $120 check came, Jen took out her card, as she always does, but noticed another friend did, too. She'd gotten a new card through work and wanted to rack up points for flights. They decided to split the bill in half so that both got their points. Their third, nonpoints friend sent them each a Zelle payment, getting no reward for her trouble. When I asked Jen how much she thought the haggling was worth, she said maybe a couple of bucks. But it all adds up, she insisted. "It's enough for me, over time, to where it matters," she said. "I'm not trying to be greedy."A small disagreement over credit-card points isn't going to end a relationship, but it is a situation where animosity can build up over time, especially if there isn't good up-front communication. The person constantly in debt to the person who puts everything on their card can start to feel like they're being taken advantage of, and the person trying to track everyone down to get paid back can get upset, too."It is more work to chase down all of the payments, and so I think you have to decide for yourself what is the value of the rewards that you're going to earn by putting this whole thing on your card? And is that worth the time and energy?" Emily Thompson, a credit-cards editor at The Points Guy, said. If you're trying to hit $8,000 in spend to get a welcome bonus, the answer might be yes. If you're earning a point per dollar, which is worth about $0.01 in many cases, you may want to stand down. Lending money is often fraught, and people are effectively doing this when they toss everything onto their credit cards. In a CreditCards.com survey, 59% of respondents who had lent money or paid for a group expense with the expectation of being paid back said they'd had something bad happen. Forty-two percent of lenders said they lost money because they weren't repaid, and 26% said their relationship with the borrower was damaged."People should tread carefully because it only takes one person stiffing you for it not to be worth it," Ted Rossman, senior industry analyst at Bankrate, said. "Are you OK taking the risk? Are you going to follow up? I find that there are very quick diminishing returns with this. If you don't get paid back quickly, you probably won't get paid back at all."Someone slightly miscalculating the tip or tax on the reimbursement might negate the rewards earned, not to mention if they miss the payment entirely. Eating a $50 loss in the name of $2.50 in rewards is not a worthwhile trade-off.Friendships come with so much more gray area compared with, say, business relationships. What may seem completely fine to someone — taking a couple of weeks to pay a friend back or asking a friend to pay the cash equivalent of points they used for a hotel booking — might seem completely out of line to someone else."There are more clear terms for business, for romantic partnerships. But in friendship, what's normal? What's not? What do I owe you? We don't know," Danielle Bayard Jackson, a friendship coach and educator, said. "We have a lot of these friendships that end prematurely or that get bogged down by a lot of resentment and confusion."Most people I talked to about this story had some sort of rewards-related anecdote with at least mild tension. One person said his friend group never has a problem with points hoarding … before name-checking one friend who goes too far. Another said she sees paying on her card at restaurants as a way to save servers the headache of trying to divvy up the bill, though that means she has to warn everyone that she's a big tipper and make sure they're on board. I recently booked a fight with a friend who remarked she'd gotten some $300 in travel credit from her rewards card. I briefly wondered whether she would offer to split the discount with me. (She didn't, and she was right.)"As much as calculating the value of the rewards that you can earn, you also have to calculate any potential negative impact on your relationship with the person," Thompson said. When she books trips for friends using her rewards, she comes up with a price that's still a "really good deal" for her friends, but it "isn't nothing," she said. That seems fair, though I'd be curious what her friends think. It's not just friendships that credit-card points can get in the middle of — but also romantic relationships. Matt (a pseudonym), from Alaska, got super into rewards a couple of years ago, watching endless YouTube videos and scouring financial-advice websites for tips. His wife was not so into it — she's the "kind of gal that's like, 'Just give me the stupid card if I use it if you want but don't expect me to have this rotating collection,'" he said. The issue came to a head when they planned a trip to Florida. Matt was procrastinating on booking, so his wife went ahead and did it without using the right card. He had her cancel everything so he could rebook with the card he wanted to use, but that wound up being a mistake — when he went to make the new reservation, prices had increased."We lost the rooms and things that she booked, and we ended up paying more. And for what? We got like 2% back on the whole deal," he said. "I should have just let her be right and be done with it."Matt has pretty much given up on the rewards game now; he uses a 2% cash-back card but doesn't pay much attention beyond that. All the hassle around it "got to be pretty stupid," he said, and the Florida drama was just "petty shit." He and his wife are now divorcing (but not over the points).Whether all this fuss over rewards is justifiable, relationally and financially, is context-dependent. Points maxing isn't low effort, and unless you're willing to spend a bunch of time figuring the system out, you're just wasting your and everyone else's energy in trying to hoard rewards. More importantly, if you are not paying off your credit-card bill at the end of every month and instead are carrying a balance, the rewards are not worth it."If you carry a balance, you shouldn't be chasing rewards. You should be focusing on paying your balance down," Schulz of LendingTree said. "You don't have to be an accountant to understand that paying 27% interest to get 2% cash back doesn't make a whole lot of sense."Credit-card rewards can be great, and they're definitely popular. Plopping down an <a target="_blank" href="https://www.businessinsider.com/american-express-platinum-card-gold-gen-z-millennial-rewards-2024-6">American Express Platinum Card feels fancy</a>, as do the perks that go along with it. But as with everything, there are trade-offs.On a macro level, the rewards aren't free. They're funded by <a target="_blank" href="https://www.businessinsider.com/stores-credit-card-companies-battle-fees-2018-9">swipe fees</a> paid by merchants that often get passed on to all consumers in the form of higher prices, regardless of how they pay, on top of interest payments and late fees. One recent Federal Reserve study found that this system led to a redistribution of $15 billion in wealth each year from the poor to the rich, the less educated to the more educated, and high-minority areas to low-minority areas.On a micro, more day-to-day level, rewards are a fun, little benefit that can become unfun fast. A local restaurant implements a 3% surcharge for credit cards to try to make up for swipe fees, and suddenly you find yourself vowing to never return even though the difference for you was $1.50. Or you see a friend on Instagram bragging about upgrading their flight and realize that's why they've been so insistent on putting brunches and happy hours on their card all year. Even though it doesn't really affect you, you feel a little cheated.Experts say if you're the points maxer trying to charge every group purchase, it's good to be up front about what you're doing. (As in, don't be like Pam's dad friend.) But if people don't want to go along, you might just need to accept that. Or realize that if they are going along, they may still think what you're doing sucks.<a target="_blank" href="https://www.businessinsider.com/author/emily-stewart">Emily Stewart</a> is a senior correspondent at Business Insider, writing about business and the economy.

Credit card rewards are turning us into jerks

<ul class="summary-list"><li>Mark Cuban tore into Donald Trump's economic plans ahead of Trump's speech in the key state of Georgia.</li><li>The billionaire investor said Trump puts little thought into his proposals.</li></ul>Billionaire investor <a target="_blank" class="" href="https://www.businessinsider.com/mark-cuban-trump-call-200-percent-tariffs-john-deere-insane-2024-9">Mark Cuban</a> on Tuesday teed off on Donald Trump's proposal to cap credit card interest rates at 10% and the former president's broader economic agenda."Next, in the 'what the hell is he thinking list?' is the 10% price cap on credit card interest rates," Cuban said during a press call hosted by Vice President Kamala Harris' campaign.Cuban, long a Trump antagonist, tore into the former president ahead of Trump's scheduled economic address in Savannah, Georgia, later Tuesday afternoon. Cuban previously <a target="_blank" class="" href="https://www.businessinsider.com/mark-cuban-sees-new-democratic-party-under-kamala-harris-2024-8">endorsed Harris' candidacy</a> and has discussed ideas with her policy team."They have a whole policy team. I know when I've had conversations with them, you know, it's always gone back to, let's talk to the policy team responsible for healthcare, responsible for venture capital, responsible for startups — whatever it may be — and I get back a serious, well-studied response," Cuban said. "That's the antithesis of what Donald Trump is doing. He says things off the top of his head that tend to be ridiculous, if not insane."During a rally last week in New York, Trump floated the idea of temporarily capping credit card interest rates at "around 10%." He would need Congress to pass such a law, but it fits within his campaign's broader outreach to working-class voters."While working Americans catch up, we're going to put a temporary cap on credit-card interest rates," Trump said on Sept. 18. "We can't let them make 25% and 30%."Cuban pointed out that Trump's plan exceeds that of Sen. Bernie Sanders, who in May 2019 proposed capping credit card interest rates at 15% in legislation he worked on with Rep. Alexandria Ocasio-Cortez of New York."I mean, literally, Bernie Sanders suggested a cap of only 15%. So now you've got Donald Trump getting involved in price caps and price controls to a greater extent than self-described socialist Bernie Sanders," Cuban said. "And I think that just says so much about how far Donald has gone to his socialist and communistic tendencies, right? I know it sounds funny and a little bit out of whack, but it's true."In response, Trump's campaign said Cuban "has no idea what he is talking about.""If he actually looked at her failed record as vice president and listened to what she says, he would know her policies will destroy our country and the American dream for hardworking families," Trump campaign communications director Steven Cheung said in a statement to Business Insider.While Trump's suggestion caught some conservatives off guard, Sen. Josh Hawley of Missouri, a Republican, proposed an 18% cap last fall. The Wall Street Journal editorial board, often considered the voice of establishment Republicans, panned the idea as "a price control on credit.""Why do Messrs. Trump and Sanders think it's helpful to limit credit access and send folks to the pawn broker or leg breaker instead? Card companies might respond by raising fees, which is what happened to free checking after Democrats regulated debit swipe charges in 2010," the board wrote.Experts have said <a target="_blank" class="" href="https://www.cnn.com/2024/09/24/business/trump-credit-card-cap/index.html">credit card companies</a> would likely respond to an interest cap by making it harder for some people to access credit."There's no question that with a 10% rate cap, card issuers would put the clamps down on credit while they figure out how to continue making money in this new normal," Matt Schulz, chief credit analyst at LendingTree, told CNN.Interest rates are extremely lucrative for credit card companies. A 2023 Consumer Financial Protection Bureau report found that in 2022 credit card companies charged Americans $105 billion in interest and more than $25 billion in fees.Trump's campaign defended his proposal, pointing out that credit card debt is at a record high. According to the New York Federal Reserve, Americans have $1.14 trillion in credit card debt. The interest rates Americans pay on that debt are also higher now than they were before the COVID-19 pandemic."Under Kamala Harris, credit card debt is at an all-time high as wages have not kept up with the pace of inflation," Trump campaign national press secretary Karoline Leavitt said in a statement. "That's why President Trump has promised to cap interest rates at 10% to provide temporary and immediate relief for hardworking Americans who are struggling to make ends meet and cannot afford hefty interest payments on top of the skyrocketing costs of mortgages, rent, groceries and gas."

Mark Cuban mocks Trump for going even further than Bernie Sanders on capping credit card interest rates

<ul class="summary-list"><li>Some retailers and fast-food chains are limiting their operations following a global IT outage.</li><li>McDonald's Japan said some of its stores had temporarily closed.</li></ul>A <a target="_blank" class="" href="https://www.businessinsider.com/major-disruptions-airline-bank-london-stock-exchange-microsoft-outage-2024-7">massive IT outage</a> has taken its toll on some grocery stores, retailers, and fast-food giants around the world.Starbucks' mobile-ordering system appears to be experiencing widespread issues in the US, with stores listing their order-ahead function as "not available."One barista in Atlanta, whose identity has been verified by BI, said that mobile orders weren't operating at their store. "Definitely a weekend that I'm glad to be not working," they said.Various Reddit users, whose identities haven't been verified by BI but who say they're Starbucks baristas, said the disruptions led to chaos at their stores and <a target="_blank" class="" href="https://www.reddit.com/r/starbucks/comments/1e74zsd/is_everyone_surviving_the_outages/">long lines</a> of <a target="_blank" class="" href="https://www.reddit.com/r/starbucksbaristas/comments/1e70xwb/everything_is_down_and_were_still_open_and_doing/">angry and impatient customers</a>. Some said that their stores had closed over the issue.Starbucks did not immediately respond to a request for comment from BI.McDonald's Japan said on Friday some of its stores had temporarily closed or were only running limited operations because of a malfunction of their in-store cash registers. <a target="_blank" class="" href="https://www.bloomberg.com/news/articles/2024-07-19/mcdonald-s-in-japan-hit-by-systems-outage-closing-30-of-stores">Bloomberg</a> reported that about a third of outlets in Japan were closed on Friday.A McDonald's spokesperson later told Business Insider that all its restaurants in Japan were open and operating.The Australian grocery-store chain Woolworths told BI that some stores had been affected by the IT issue. The chain said that all but six stores were open, while some had fewer checkouts functioning.A banner on Woolworths' website said it was "experiencing intermittent technical difficulties instore and online."Coles, another Australian grocery-store chain, told BI it was being "affected by a global technical issue which is disrupting some of our systems in our supermarkets and liquor stores."A spokesperson from the UK grocery-store chain Morrisons told BI that it was "experiencing some issues with payment in some stores." And a spokesperson for Waitrose, another UK grocery-store chain, told BI it had "briefly" experienced issues with contactless payments.Various other companies reported issues with some card payments not working on Friday.Transport for Ireland <a target="_blank" class="" href="https://x.com/TFIupdates/status/1814207452105060808">said</a> that the top-up app for its transport passes had been down for several <a target="_blank" class="" href="https://x.com/TFIupdates/status/1814295821069750528">hours</a>. WWF Australia <a target="_blank" class="" href="https://x.com/WWF_Australia/status/1814212390348894368">said</a> that its credit-card-donation system was down and told people to donate via PayPal instead. Trelissick, a country house in Cornwall, England, <a target="_blank" class="" href="https://x.com/NTTrelissick/status/1814231647945896189">said</a> that visitors couldn't pay by card. A cinema and café in Bristol, England, <a target="_blank" class="" href="https://x.com/wshed/status/1814222356807598554">said</a> that it could only accept cash.<a target="_blank" class="" href="https://www.bloomberg.com/news/live-blog/2024-07-19/microsoft-cloud-technical-outage-updates">Bloomberg</a> reported that staff at the Ocean Park Marriott in Hong Kong were using pen and paper to check guests in. "We are actively working with our vendors to resolve issues that have impacted certain hotel systems," a spokesperson for Marriott International told BI.Major airlines, banks, and supermarkets are experiencing widespread disruptions linked to an IT outage after Microsoft reported problems with its online services, linked to an issue at the cybersecurity firm CrowdStrike.But not all retailers have been affected. Representatives for the UK grocery-store chains Asda, Sainsbury's, and Marks &amp; Spencer told BI that they were operating as normal. And a spokesperson for the US-based chain Kroger said it wasn't experiencing any major issues.

Global IT outage hits Starbucks mobile-order system and card payments at businesses

<ul class="summary-list"><li>As of September, US credit-card delinquency rates were at the highest rate in a decade.</li><li>The Federal Reserve Bank of Philadelphia said 3.2% of card balances were at least 30 days past due.</li></ul>Americans are having a harder time paying off their credit cards. A report from the Federal Reserve Bank of Philadelphia found credit-card delinquency rates have surpassed pre-pandemic levels, with the share of balances 30 days past due hovering at the highest mark since late 2012. In the second quarter of 2021, credit card delinquency rates were at historic lows. Those figures have steadily climbed since then, however, and the spending behavior reflects "greater consumer fragility," Philadelphia Fed economists said. Total revolving credit card balances have also increased from pandemic lows, the economists said. "Revolving balances as a share of the overall balance climbed from 65 percent in 2021 to 70 percent in the third quarter of 2023," the report states. "During the same period, the share of accounts making the full payment has moderated, driven by strong consumer spending and dwindling government support. While the share of full payment accounts declined, it remains high compared with pre-pandemic levels."<div type="image" title="Credit card performance deteriorating, 2024" height="758" width="1221" msid="106779240" hostid="261" sizebytes="53334"></div>In response to the deterioration, the economists noted banks are granting fewer credit line increases, and reducing credit lines more frequently. The Philadelphia Fed said roughly 10% of credit-card borrowers owed more than $5,000. "The average American's budget doesn't have a whole lot of wiggle room, so when prices go up to the degree they have in recent years, it's a big deal," said LendingTree's chief credit analyst Matt Schulz. A January 8 report from <a href="https://www.lendingtree.com/debt-consolidation/debt-payments-study/" target="_blank" rel="noopener">LendingTree</a> found that in the largest 100 US metros, 29.6% of Americans were behind on at least one debt payment between July 1 and September 30, 2023. Just over 27% of consumers had payments delinquent by 90 days or more. "Higher interest rates have a real impact on people's ability to pay," Schulz said. "The massive, constant rise in rates over the past two years has shrunk people's financial margin for error even further."

Americans are missing credit card payments at the highest rate in a decade

<ul class="summary-list"><li>Total consumer debt swelled to $17.5 trillion in Q4, a $212 billion jump from the previous quarter.</li><li>Delinquencies are rising among younger borrowers in particular, the New York Fed said. </li></ul>Younger Americans are falling behind on paying credit card and auto loans, with the rate of late payments rising above pre-pandemic levels in the last quarter, the New York Federal Reserve said in a report. Data from the New York Fed showed a persistent surge in credit card and auto loan delinquencies as total consumer debt swelled to $17.5 trillion in the fourth quarter, increase of $212 billion from the previous three months. Total credit card balances hit $1.13 trillion and auto loans outstanding increased to $1.61 trillion.Serious defaults on debt, defined as being <a href="https://www.investopedia.com/terms/s/serious_delinquency.asp#:~:text=A%20serious%20delinquency%20can%20also,to%20be%20a%20serious%20delinquency." target="_blank" rel="noopener">90 days</a> or more past due, were particularly prevalent among young borrowers and low-income households, prompting the NY Fed to flag the groups as at risk of "increased financial stress.""Serious credit card delinquencies increased across all age groups, notably with younger borrowers surpassing pre-pandemic levels," New York Fed researchers wrote. "Delinquency tends to decrease with age, and younger generations have delinquency rates slightly higher than their predecessors," they added in a separate post. Thanks to climbing interest rates since the Fed began its policy-tightening cycle in March 2022, affordability for loan products ranging from mortgages to credit cards to personal loans has become strained for many Americans.The fed funds rate hit the highest level in 23 years in the central bank's latest hiking cycle. That has meant the typical rate on credit cards jumped from about 14.5% to 21.47%, according to <a href="https://fred.stlouisfed.org/series/TERMCBCCALLNS" target="_blank" rel="noopener">Fed data</a>.Previously, Moody's analysts highlighted that <a href="https://markets.businessinsider.com/news/stocks/credit-crunch-defaults-credit-card-debt-inflation-interest-rates-economy-2023-6">young adults</a> are still not in their peak earning years, yet they're still feeling the impacts of inflation. Meanwhile, lower-income borrowers may have already used up a significant portion of their excess savings. Mortgage debt increased by 2.8% in 2023, with the delinquency rate climbing to 0.82%, marking a quarter-percentage-point rise from the previous year.

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