Here are some highlights of what’s been happening in credit card news this week. Unfortunately, it’s not all good news. Many Americans are accumulating credit card debt and it’s not because of a shopping spree. On a more pleasant note, you’ll gain insight into how to use credit cards to save money on vacation costs. But perhaps the biggest development this week is one involving prepaid cards, not credit cards.
A recent survey by Demos, a research and policy center, showed that those carrying credit card debt for at least three months had an average debt of $7,145, with $1,678 of that attributable to medical costs. It’s not just those without health insurance who are getting into debt, either. The results also showed that a family with employer-provided insurance will spend more than $20,000 in healthcare costs this year.
USA Today columnist Sandra Block reminds us that we can use more than just the rewards we earn to save money on vacation. Check your credit card agreement to find out if you’re already covered for some of the expenses you incur on vacation. For instance, you might not need to purchase car rental insurance if you rent a car with a credit card that offers coverage. You have to read the fine print, though, because that’s where you’ll find the details about what’s covered and what’s not.
You also get advice regarding baggage fees, airport lounges, and more. This is a good story to read before you hit the road (or the skies) this summer.
Before you get excited, let me tell you that you don’t really have that option. It would be a nice reward, though. According to Capital One’s Rewards Barometer, a quarterly survey that focuses on how consumers accumulate and redeem credit card rewards, 45 percent would jump at the chance to redeem rewards for a day off.
The survey also focused on more realistic options, such as how consumers plan to use rewards to cut travel expenses for summer vacations. A healthy 67 percent are planning a vacation and the most popular redemption choice was to use rewards to pay for airfare.
[Credit Cards: Research and compare credit cards at Credit.com]
The prepaid card market is expanding rapidly and there are few regulations at the federal level. The Consumer Financial Protection Bureau (CFPB) announced that it would be looking into ways to regulate the prepaid card industry. The agency will take a look at fees, transparency, and a variety of issues involving consumer protection. The CFPB will also look into product features, such as claims that the card can improve your credit history.