VISA Releases Stellar Results
VISA Inc. released stellar results for its third quarter, reporting that net income leaped 73% to US$729M, up from US$422M a year ago. Due to the nature of Visa’s business (it makes its riches off transaction fees rather than lending), the company remained relatively isolated from an unattractive, default-ridden credit market.
Visa, as the world’s largest electronic payments network, also benefited from a consumer switch-away from cash and cheques towards debt, credit and charge cards. Visa’s share price jumped 0.64% yesterday to close at US$67.21.
Advanta Suspends Nearly 1 Million Client Accounts
It seems like the rough waters are intensifying for Advanta Corp, the credit card company that was forced to suspend nearly a million client accounts after defaults rose to 20% in the first quarter of 2009. The lender said today that defaults rose by over 100% to 56.95% in June from May.
Just over a week ago, it announced that it would be laying off half of its workforce across all departments, after posting three-straight quarterly losses. Advanta is set to release its second quarter results this week.
Banks Charging For Overseas Credit Card Purchases
Be careful how you use your credit card when you travel abroad. Many banks are now charging customers a fee when they use their credit card for overseas purchases (which includes online transactions with non-U.S. merchants who don’t use a U.S. credit card processor).
Starting this month, Discover Financial Services began charging a new 2% fee for foreign transactions, while more credit-card customers at Bank of America will get hit with foreign-transaction fees next month (June 2009). Late last year, American Express raised its transaction fees to 2.7% from 2%.
For many years, banks have charged customers a fee for using their cards overseas IF the purchases were made in a foreign currency. Visa Inc. and MasterCard Inc. charge a 1% fee for converting foreign currencies into U.S. dollars – a fee that most banks pass along, along with their own markups which typically range from 1% to 2%.
What banks do not currently (as of May 12, 2009) charge foreign transaction fees? Call your own bank / credit card company and ask customer service directly, but two large banks that don’t currently charge this fee are Capital One and Charles Schwab. But for how long though? Keep a close eye on your credit card statements and communications.