Student loan borrowers and P.F. Chang's customers are screwed, we're getting better credit card security, and we're borrowing more than ever for cars.
This week in debt news…
No extra credit on student loans
Republicans in Congress blocked a bill that would have let Americans refinance their student loans at lower interest rates on Wednesday, which really didn’t surprise anyone.
The bill, authored by Sen. Elizabeth Warren (D-Mass.), could have saved an estimated 25 million borrowers about $2,000 each — but would have paid for the changes by raising taxes on millionaires through a controversial proposal called the Buffett Rule. Named after Warren Buffett, the bazillionaire who famously pointed out that he pays tax at a lower rate than his employees, the rule would make people earning more than $1 million per year through wages and investments pay at least 30 percent in federal taxes.
Senate Minority Leader Mitch McConnell (R-Ky.) told The Associated Press: “The Senate Democrats’ bill isn’t really about students at all. It’s really all about Senate Democrats. They want an issue to campaign on to save their own hides this November.” Because Republicans aren’t looking to create any such issues themselves.
More car loans vs. more car life
Last week’s big auto news was expensive: “The average amount financed for a new vehicle loan also reached an all-time high of $27,612” in the first quarter of this year, Experian reported. “In addition, the average monthly payment for a new vehicle loan reached its highest point on record at $474.”
This week’s news took some of the sting out: “The combined average age of all light vehicles on the road in the U.S. remained steady at 11.4 years,” says new research from analysts at IHS. So at least consumers are keeping their cars around after they pay them off.
Preventing credit card theft
Ever since the massive data breach at Target last year — which put more than 44 million of its credit card customers at risk — more card issuers have adopted something called EMV chip technology.
Already popular in Europe and Asia, these “smart chips” are embedded into the plastic card and add an extra layer of security. (Here’s a list of cards that offer smart chips.) This week, a new report predicts, “By the end of 2015, 70 percent of U.S. credit cards and 41 percent of U.S. debit cards will be EMV enabled.”
The reason is simple, says financial analyst firm Aite Group: “Rising counterfeit card fraud.” Amazingly, that fraud represented “10 cents out of every $100 transacted from 2007 to 2014.”
Time for another data breach
Speaking of credit cards, have you eaten at P.F. Chang’s lately? Here’s a cookie fortune for you: “Your identity will be stolen in the near future. ☺”
The Asian restaurant chain is looking into a report that its credit and debit card information has been compromised and listed for sale online this week. The cards are selling for $18 to $140 each at the same website the cards stolen from Target were listed on, according to Brian Krebs, the independent reporter who also broke the story about Target’s breach.
So far, cards have been reported stolen from locations in Florida, Maryland, New Jersey, Pennsylvania, Nevada and North Carolina. The theft occurred between the end of March and mid-May.