Image source: Getty Images.
The credit card industry must adapt to shifts in consumer trends and changes in the economy. With credit card companies looking for ways to retain cardholders, today’s consumer has much more influence over where the industry is headed. Here’s what we can expect this year from the credit card industry as a whole.
1. Easier access to credit
It was announced last year that there will be a new change in FICO® Scores that could give millions of Americans a bump in their credit score, resulting in easier access to credit for a new range of borrowers. This is great news particularly for borrowers who haven’t built up a credit history yet. The new credit scoring model will allow your banking history to help determine your creditworthiness. This means that you could see an increase in your credit score if you manage your checking and savings accounts responsibly, despite having a less than ideal credit history.
2. Fewer fees
Online banks are overtaking traditional banks when it comes to offering the best product possible. Without the overhead cost of operating physical locations, these banks are able to offer accounts with low or no fees, and consumers are flocking to them.
The increasing popularity of online banks is pushing the traditional banking industry to lower their fees, or at least be more transparent about them. Until recently, only one major credit card offered no late fees, but a new credit card has just hit the scene that doesn’t charge fees for anything -- yes, you read that right.
In 2019, expect to see more credit cards offering no late fees, no foreign transaction fees, and no overdraft fees. We might even start seeing more rewards credit cards with no annual fees and more balance transfer credit cards with no balance transfer fee.
3. Higher interest rates
Interest rates have been on the rise since the end of 2015, but the Federal Reserve has steadily increased rates every quarter in 2018 with plans to continue increases through 2020. Credit card interest rates track the Federal Reserve rate fairly closely, so you can expect to continue seeing gradual increases in your APR throughout all of 2019. The best way to combat paying higher interest charges is to pay your balance in full each month and avoid taking on new debt.
4. Rewards for loyal spenders
As each year goes by we continue to ask ourselves whether or not this era of high-value credit card rewards and sign-up bonuses is finally coming to an end. While it doesn’t look like sign-up bonuses are going anywhere in 2019, it does seem like credit card companies are shifting their programs to reward consumers who are loyal and don’t cancel their card after the first year.