Information Center – News and Articles about Credit Cards
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Credit Card Companies' Interests Collision
Even such financial giants as Visa, MasterCard, American Express and Discover with billiards of dollars revenues suffer from economic slowdown and credit crisis. The companies have incurred great losses due to numerous credit delinquency cases. And now the credit providers are trying to compensate for the losses one way or another.
Some of the companies were spotted to carry out abusive credit card practices, such as unfair fees and default rates, aggressive anti-delinquency policies and so on. However, credit companies are trying to get back on track not just through abusing customers. They seem to stick to the proverb business is business and now they are making attempts to get out of the financial hole by battening on their competitors' efforts.
Just a few days ago American Express and MasterCard Inc. settled a lawsuit filed in 2004 by AmEx. Under the court decision MasterCard was obliged to pay $1.8 billion to AmEx. American Express credit card company 4 years ago filed a lawsuit against MasterCard who were suspected of antitrust policy. These alleged anti-competitive practices, according to the American Express, prevented the company for years from establishing banking relationships that were believed to widen the distribution of American Express credit cards.
By the way, AmEx won a similar lawsuit against Visa last year. The court bound Visa to pay over $2 billion.
MasterCard will have to make payments in quarterly installments during the following 3 years.
In fact, American Express were not so much concerned about MasterCard's anti-competitive practices. The dramatic credit losses that the company is experiencing under the economic recession were the object.
AmEx's CEO, Kenneth Chenault avowed that the weakening economic dynamics affects the business greatly. Their revenues have decreased. And the antitrust settlement that was reached with MasterCard credit card company will become "a multi-year source of funds" that will supposedly help AmEx to get back on track.
Two years ago American Express and Discover got a chance to create their own payment networks after Visa and MasterCard's ones through partnerships with banks. It happened after another AmEx's lawsuit against Visa and MasterCard that were claimed to force banks to sign exclusive contracts with the two companies.
The court decision made in favor of American Express, opened new horizons for the company. They got an opportunity to issue bank-branded credit cards. AmEx initiated that trial in order to make up for the money losses caused by MasterCard and Visa's exclusive agreements with banks.
This way American Express got what they wanted, which is money vitally necessary for the company. But actually, AmEx was not the only winner in this set of legal battles. During the trials Visa and MasterCard have become public companies, which resulted in public and financial buzz around them. And their stock prices just skyrocketed.
So, when financial giants interests collide, it is hard to say who is going to win the battle. We will just leave their big credit games to them.
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Articles about credit cards
The subject of credit card use by young adults is much talked about online and offline, in magazine and internet articles. There are supporters and opponents of issuing plastics to young people among credit consumers and financial experts. However, many of those hair-raising tales about graduates that collect enormous debts are just boogieman stories. The statistics shows that young people became more reasonable in credit card management and most of them do not have loads of debts.
A recent opinion poll conducted among college students revealed that 92% of young adults realize that damage credit history and low credit score could have a negative effect on their future financial standing and cause problems with qualifying for loans.
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Financial crisis, mortgage and credit crisis, real estate crisis, what other crises do US citizens have to suffer from? It is just some epidemic of crises! Talking about epidemic, health insurance crisis is another hardship Americans are going through. Medical services take a bite out of your wallet. This year, according to recent surveys, Americans healthcare expenses exceed last year's medical spending by nearly $1,500.
The thing is that insurance companies have significantly raised healthcare insurance costs for customers. Many people just cannot afford paying for medical insurance. The government understands that many citizens' financial standing has shattered due to the economy recession. And the authorities do not stay indifferent to people's problems. They try to find an alternative solution.
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Have you ever noticed that all credit cards in circulation look the same except the color and picture on the front? The common features are size, shape, the magnetic stripe, the signature stripe, hologram and the number emblazoned across the front. Many people are so used to the standard credit card design that they don't pay attention to these physical characteristics. If you want to know why all plastics from different American issuers share the same structural features, read our article. We will tell you 10 interesting facts that cover their technology.
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