Credit Sesame’s personal finance weekly news roundup December 31, 2022. Stories, news, politics and events impacting the personal finance sector during the last week.
- United States suffers more than its share of credit card fraud
- FTC orders Mastercard to allow competing debit card networks
- Holiday spending grows, but mostly due to inflation
- Congress passes measures to encourage retirement saving
- Major credit cards see bad debts rising
- Credit scores dip as late payments rise
- National home prices decline again
- 30-year mortgage rates break falling trend
- Old-economy stocks trounced tech in 2022
- Pending home sales continue to nose dive
1. United States suffers more than its share of credit card fraud
A new Nilson Report study of credit card fraud found that in 2021, the United States was the site of 37% of worldwide losses to card fraud. This number is especially high considering the US was the source of just 23% of global card use at merchants and ATMs. The study found that fraud losses worldwide increased by 14% in 2021, to a total of $32 billion. The US experienced an even greater rate of fraud growth. Card fraud in the US grew by 18% in 2021, to a total of $11.9 billion. See article at Yahoo.com.
2. FTC orders Mastercard to allow competing debit card networks
The Federal Trade Commission has ordered Mastercard to enable merchants to use competing debit card transaction networks. Mastercard currently requires merchants using its debit cards to process transactions on its own networks, and makes money on those transactions. Previously Mastercard has refused to share customer information with competing networks on the premise that this would jeopardize customer data security. However, lobbying groups for merchants have pressed for debit card transactions to be open to more competition so retailers can save money on transaction processing fees. See release at FTC.gov.
3. Holiday spending grows, but mostly due to inflation
The latest Mastercard SpendingPulse report found that consumers spent 7.6% more this holiday shopping season than they did last year. While that sounds like a solid increase, most of it can be attributed to a 7.1% inflation rate over the past year. Restaurants in particular have been enjoying a strong comeback. Restaurant spending was up by 15.1% this year compared to last year’s holiday shopping season. See article at Yahoo.com.
4. Congress passes measures to encourage retirement saving
As part of the spending bill Congress approved last week, a series of changes have eased rules governing retirement savings plans. The idea is to encourage people to put aside more money for retirement. Changes under the new law will include allowing people with retirement plans to wait longer before taking required minimum distributions, allowing unused 529 education fund money to roll over into a retirement plan and increasing catch-up contribution amounts for older workers. See article at Yahoo.com.
5. Major credit cards see bad debts rising
A report by S&P Global Market Intelligence found that both delinquency and charge-off rates have been rising for the six largest US credit card issuers. Delinquencies are payments that are late by more than 30 days. Charge-off rates capture more serious delays in payments, requiring the credit card company to assume they will be unable to collect all of the debt. Both delinquencies and charge-offs increased for the most recent month and over the past year. The credit card issuers included in the study are American Express, Bank of America, Capital One, Citigroup, Discover and JP Morgan Chase. See full report at SPGlobal.com.
6. Credit scores dip as late payments rise
The December 2022 VantageScore CreditGauge report showed that the average credit score fell slightly in the most recent month while late payments rose. The average national VantageScore dropped by 1 point to 696. It had previously held steady at 697 since March. A greater warning sign is that delinquency rates for auto loans, credit cards, mortgages and personal loans all increased over the past year. These late payments are all the more troublesome because average balances on all of those products have increased in the past 12 months. See full release at VantageScore.com.
7. National home prices decline again
The average price of an American home declined for the fourth straight month in October. That’s according to a new release of the S&P CoreLogic Case-Shiller National Home Price Index. The index is still ahead of where it was a year ago, but that’s due to sharp price increases in late 2021 and early 2022. Home prices declined in each of 20 major cities tracked by the index, indicating the housing slump is widespread rather than regional. See full release at SPGlobal.com.
8. 30-year mortgage rates break falling trend
30-year fixed mortgage rates rose by 15 basis points last week, to 6.42%. Previously, they had declined for six straight weeks. The upturn means 30-year rates will end the year 3.31% higher than they were a year ago. See the latest rate information at FreddieMac.com.
9. Old-economy stocks trounced tech in 2022
According to an analysis by Yahoo Finance, the typically large, traditional businesses that make up the Dow Jones Industrials Average greatly outperformed the tech-based Nasdaq index in 2022. As of the last week of the year, the Dow was down by less than 10% in 2022 while the Nasdaq index had lost about 35%. That’s the biggest performance advantage for the typically large, traditional companies that make up the Dow since the dot-com bubble burst in 2000 to 2002. See article at Yahoo.com.
10. Pending home sales continue to nose dive
The National Association of Realtor’s index of pending home sales fell by 4.0% in November. This marked the sixth consecutive monthly decline for the index. The index has now fallen in 11 out of the past 12 months. Pending home sale volume is 37.8% lower than a year ago. November’s pending home sales were the second lowest in the past 20 years. See full release at NAR.Realtor.