Wednesday, April 23, 2014

Credit card predictions: What will be in your wallet in 2014?

Compiled by Michael De Groote, Deseret News National Edition

Published: Sun, Jan. 12 4:12 p.m. MST

 Credit cards are putting on their best faces for 2014.

Credit cards are putting on their best faces for 2014.

(Phillip Taylor, PTMoney.com)

Credit card companies are always trying new ways to get customers — and 2014 is shaping up to have various creative attempts to get into people's wallets.

NerdWallet predicts bigger and better offers. For example, some cards began offering partnerships with other companies. So Barclays gave out free FICO scores. American Express Blue Cash cards offered Amazon Prime membership.

NerdWallet also says concierge services will no longer be limited to just higher end credit cards in 2014 as lower-cost cards like the GM credit card offer things like free upgrades on international flights.

NerdWallet says consumer-available credit scores, which favored "consumers with a history of borrowing, rather than a history of staying within their means," will become "more realistic." One way will be taking rental payments into the scores.

The big number in 2014 will be zero — as in 0 percent APR balance transfer periods which NerdWallet says will continue to grow longer. This is good because transfer fees can destroy the advantage of moving a balance from a higher interest rate card to a lower interest rate card.

CardHub, however, predicts that interest rates will remain low, but that 0 percent credit card offers peaked in mid-2013 and will fall.

On the other hand, CardHub thinks that consumer credit scores will continue to improve: "After peaking at 10.97 percent during the second quarter of 2010, the credit card charge-off rate has since fallen considerably. In fact, it declined more than 15 percent during 2013 alone, beginning at 3.78 percent and falling to 3.19 percent by year's end."

Although CardHub thinks credit cards with EMV chips won't catch on yet in 2014 like they have in Europe and other places.

CreditCards.com, however, seems more optimistic about the EMV chip prospects: "Experts say that 2014 will be the year that the traditional magnetic stripe credit card will start to slowly make its exit in the U.S."

The key word is slowly.

"There's a natural replacement cycle for payment cards, roughly every 3 to 4 years," Randy Vanderhoof, executive director of the EMV Migration Forum, tells CreditCards.com. "A lot of the financial institutions are starting to incorporate in their replacement cycle the introduction of EMV."

CreditCards.com also sees a drop in foreign transaction fees, the 2 to 3 percent charges cards make when people make purchases abroad.

The least happy prediction came from CardHub: People will rack up $45 billion in new credit card debt in 2014. No slow down in consumer debt is in sight, CardHub says.

EMAIL: mdegroote@deseretnews.com

Twitter: @degroote

Facebook: facebook.com/madegroote

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1. george of the jungle
goshen, UT,
Jan. 12, 2014

What's the score. Insurance rates, interest rates on a lone, even jobs. Ya, I don' want to be in dept, but the score makes a big difference in what life will cost.

2. taum
american fork, UT,
Jan. 13, 2014

Why are we not talking a safer way to use cards? Why am I watching daily to protect theft from my accounts? Why isn't the merchant held accountable for this fraud? This system of doing business has to be cleaned up even at the inconvenience of the cardholder.
Don't offer me more, offer my complete safety.

3. The Rock
Federal Way, WA,
Jan. 13, 2014

What will I have in my wallet?
Not a credit card and a Capitol One credit card is the last one I will ever get, They refuse to stop sending my wife and I junk mail. I have called and asked to be removed from their list. Didn't work. I have put requests in their return mail envelope to no avail. I have mailed them heavy steel plates and it didn't work. I tried mailing them dirt with no effect.

People need to understand that those who understand credit earn it. Those who do not, pay it. I earn it. I will not place myself in financial bondage by using credit except in a dire emergency, if even then.