• We may be our own worst enemy when it comes to credit cards (NY Times):  Good way to teach students about psychology behind the rise of credit.

One of the most well-known studies, published in 2001 and titled “Always Leave Home Without It,” showed that in certain contexts, people were willing to pay up to twice as much for the same item when paying with a credit card instead of cash. This is known as the “credit card premium.”

A study in 2008, titled “Monopoly Money,” featured a gift card denominated in dollars. Even though the gift card lost value instantly when people used it, people were still more likely to spend freely with it than they did with cash. And a 2011 study showed that people considering using credit cards tended to focus more heavily on product features when shopping, while cash buyers paid closer attention to costs.

• New product, Plastc, seeks to make our wallets thinner (CBS News):

Bulky wallets stuffed with cash and cards could become a thing of the past, if a new digital currency card called “Plastc” catches on. Plastc uses near-field communication (NFC) technology and flash memory to digitally store information from up to 20 credit and debit cards all in one place.

Plastc’s owners can swipe through each of their stored cards on the interface, and select their preferred card when they want to make a purchase. CNET reports that Plastc will also support Google Wallet, Apple Pay, PayPal and other payment options.

The card, which will be available for iOS and Androids next year, resembles a typical charge card, but features an e-ink touchscreen that unlocks with PIN activation, and requires smart phone syncing.

• Want to know how Apple Pay, a new mobile payments system, is going to work?  Leaked training documents explain (CNET):

Described in a story published by 9to5Mac on Monday, users can set up Apple Pay through the Passbook app either during the initial iOS 8 setup or via a new Settings section called Passbook & Apple Pay. You can add your credit or debit card details to Passbook through your iTunes account or by scanning in the information using your phone’s camera. You’d be able to store up to eight credit and/or debit cards, according to 9to5Mac.

• Want to pay your college bill with a credit card?  The average fee is 2.62% (USA Today):

The average convenience fee for colleges that accept credit cards is 2.62%, according to a survey released Tuesday by CreditCards.com. So on a $10,000 tuition bill, college students pay an average of $262 extra just to use a credit card. That’s before any interest that will be charged, if you do not pay off the entire balance on your credit card bill each month.

• Credit cards becoming larger profit center for banks (so expect more offers showing up in your mail!) (Marketplace)

When J.P. Morgan Chase and Citigroup announce earnings Tuesday, many analysts will be looking for profits in a traditionally less-than-exciting place: credit cards.

Unlike a few years ago, consumers are being smart with their cards, which means low delinquency rates, and they’re also starting to feel comfortable enough with the state of the economy to spend a bit more.

Credit cards look pretty good compared with mortgages or other low-interest bank products, says Jim Sinegal, who covers banks and credit card companies for Morningstar. They generally charge rates of “12 percent plus, up to 20 percent in some cases,” he says.

• More on the financial health of the credit card industry (Wall Street Journal):

“The current state of the industry is very, very healthy,” Eileen Serra, who runs J.P. Morgan’s credit-card business, said in an interview.  U.S. card issuers will generate $158.6 billion in revenue this year, a 9% increase from 2013, according to estimates from R.K. Hammer, a consulting firm in Thousand Oaks, Calif., that focuses on the industry. It would be the first annual gain since 2008.

• Another week, more credit card breaches to report:  Kmart and Dairy Queen

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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