In almost every industry, a new year means new trends and expectations. The credit card industry is no different. EMV chip cards are receiving a great deal of attention these days, but it isn’t the only change the world of credit cards will see in 2015.
A recent U.S. News article highlights five specific trends the credit card industry is likely to experience this year.
1) Advancements in security features — Beyond the distribution of millions of EMV chip cards, enhancements to overall card security are expected this year. Innovations in monitoring credit card activity are among the anticipated changes.
2) Free credit scores — In early 2014, the Consumer Financial Protection Bureau (CFPB) began urging major credit card issuers to provide free credit scores on consumers’ statements. Although this score may well differ from the score a lender sees when a consumer applies for a loan, more issuers are expected to begin providing scores in 2015.
3) Increased access to credit — A combination of healthier credit scores and more lenient lending standards are predicted to result in more easily obtained credit for many consumers. This presents a potential threat for credit unions and community banks working with outdated risk models.
4) Rise in balance transfer promotions — As the economy continues to improve, an increase in 0-percent APR offers is predicted. The terms of these introductory offers, however, are expected to be shortened from 18 – 24 months to 13 – 17 months.
5) Surge in loyalty programs — The race to offer the most competitive, attractive rewards programs is projected to heat up. An uptick in sign-on bonuses and more robust cash-back offerings are predicted for this year.
Community financial institutions should consider how the above trends will impact the competitive stance of their own credit card products. Perhaps some modifications or improvements to the overall portfolio are warranted to remain consumers’ best choice for credit cards in 2015.
