We are almost half way through 2015. Already there have been exciting happenings in the credit card industry, such as the launch of Apple Pay, credit cards stored on phones and mobile devices as well as some scary incidents such as the Target security breach. There are a few predictions on other changes we can expect to see either this year or in 2016 as far as credit cards are concerned.
Greater Credit Card Security
After all of the security breaches over the last 3 years, with last year hitting a peak the banking and credit card industries both have security at the top of their agendas. Security breaches are not just a concern for customers but also for banks and credit card issuers, the only people who profit from these breaches are the criminals and hackers. This October merchants will be required to upgrade their terminals to accept EMV chip credit and debit cards for example or the liability for any fraud will rest on the merchants hands. You can also expect higher monitoring of your credit card usage by the credit card companies themselves so they can identify fraudulent purchases on the spot. I fully expect to see new security measures take place within the credit card industry going forward into 2016 and beyond.
More Credit Card Competition:
These days credit cards offer very rich rewards programs, which has been good for both the credit card companies and the consumer. Yet these rich rewards programs have opened up something that the credit card companies themselves did not see coming, stiff competition for customers. The way rewards programs work is the more you use the card the more rewards you receive. Once upon a time it was common for consumers to use 3 or more credit cards, but these days many people are favoring one or two credit cards and forgoing using any others. This has led to credit card companies offering ever increasing rewards to their customer base. Rewards programs are going to get better going into 2016 and you will see some very good sign up bonuses this year as credit card companies scramble to get a higher share of the overall credit card customer base.
Expanded Credit Card Availability:
During the most recent recession credit card companies tightened up the minimum credit standards to be able to receive a credit card. Banks also in turn tightened up credit standards to be qualified to receive a loan. Lately however credit card companies and banks both have loosened up these tight credit standards, willing to take more risks to gain a greater share of the market. This means many more customers whose credit scores are below prime will find access to credit cards and loans easier. I fully expect the this to increase over the next 18 months well into 2016 and beyond as the economy recovers. For the first time since the recession started delinquency rates have been steadily falling, leading banks and credit card companies to expend their given risk pools to accept new customers with less than perfect credit.
Increases In Zero Percent Interest Balance Transfer Offers:
Much like how credit card companies are now taking people with less than perfect credit and also offering bigger and better reward programs, credit card companies are once again rolling out attractive balance transfer offers. At the start of the recession credit card companies started to withdraw offering balance transfers to all but those with perfect or very high credit scores. This move was made to protect the credit card companies from potential loss and delinquencies. Today there are many more of these offers around than at the mid point of the recession. You can however expect to see shorter lengths on the zero percent interest offers, in the past it was common to see 18 month to 24 months at zero percent interest, but these days it is more common to see 12 to 17 months instead. Those with perfect credit can still find 18 to 24 month offers on occasion however.