In recent years we’ve seen big name credit card companies offering some amazing perks as incentives for establishing a line of credit. These incentives range from airline and airfare credits to hotel points and more. This year, however, credit card companies seem to be reaching back to the fundamentals in their approach to compensation for faithful customers. Below we discuss just a few trends you can expect to see if you’re thinking of pursuing a new line of credit in 2017.
NOW IS YOUR CHANCE!
This first trend is one that is certain to spark interest and excitement in many. If you’re like so many middle class consumers who know the responsibility of “adulating” and have learned to navigate this wisely but still wish to explore some experiences and opportunities that may be slightly beyond your financial reach, this may be your year! According to TransUnion credit bureau, the credit card industry has reached it’s highest level of credit card holders with subprime credit since 2010. This is not to suggest that the credit card industry is returning to a time of “easy credit”. Rather, it is to simply say that if you are looking to build and restore your credit, now is a good time to pursue a secured credit card which may be easier than it has been in previous years.
IT’S TOO EASY
It’s nearly impossible to find a single person in 2017 who does not own a smart phone. With that comes the ease and convenience of access. Access to account balances, spending limits, balance inquiries, coupons, price comparisons, and DEALS! People with mobile devices are using them more and more to make payments and purchases on line. With this in mind, card issuers and creating new ways for cardholders to take advantage of opportunities to access vendors and redeem rewards quickly and easily directly from their personal devices through apps and online. By removing the friction of the payment process, card issuer are making it even easier to spend. This convenience can quickly turn into a cost if you are not careful. Avoid letting convenience come between you and where you want to be financially by setting a budget and giving yourself spending limits.
YOU’VE GOTTA PAY TO PLAY
With the Federal Reserve’s recent interest rate increase announcement Federal projections are suggesting that interest rates could spike as much as just one quarter shy of a percentage point. This can be quite a significant increase, making credit card debt more expensive overall. An interest rate increase of this nature could end up costing as much as several hundred dollars over the next five years for some card holders. Our suggestions for navigating this spiky terrain are twofold. One, we recommend avoiding interest altogether by paying your balance in full each month. Alternatively, you may want to consider transferring balances from credit cards with increasing interest rates to a card with a 0% interest rate on balance transfers, if you qualify. This will allow you an interest free option for paying down your balance.
YOU DESERVE SOMETHING SPECIAL…
We’ve saved the best for last! According to the Nilson Report credit card issuers will focus on “bread-and-butter” rewards this year such as cash back. No translation needed, this means money in your pocket. You can expect to see more incentives aimed at attracting the middle class card holders. Keep your eyes open and you won’t miss the ensuing offers just for you. Competition between credit card issuers for your business will work in your favor this year also. All of this will include rewards that are tailored just for you, especially if you spend more in the supermarket that on shopping sprees.