Credit card predictions: What will be in your wallet in 2014? | Deseret News National
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Phillip Taylor, PTMoney.com
Moneywise

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

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.

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