4. Lending standards will loosen slowly
As the economy improves, issuers will find ways to re-define which consumers are “higher risk.”
They’ll slowly widen the lending circle and include people who may have had problems affecting their credit scores but who can still pay their bills.
5. Credit card debt will start to rise
The latest Federal Reserve Consumer Credit report showed credit card debt fell for a 26th-consecutive month as Americans paid down debt and issuers cut credit limits and eliminated high-risk accounts.
As credit card issuers start to loosen lending standards, more higher-risk consumers will be approved for credit cards, and consumers with higher credit scores may see their credit limits increase.
6. Bigger rewards for spending
Issuers will expand awards to attract new customers. They’re now using bonuses to encourage spending.
Discover More and Chase Freedom cards offer $100 spending bonuses for new applicants who reach set spending limits: $500 within three months for Discover More and $799 within three months for Chase Freedom.
Most cards will continue to offer these rewards without annual fees. However, some issuers are introducing new cards with “super-sized rewards” to attract big spenders to cards with an annual fee.
The Citi ThankYou Prestige Card, for example, comes with an annual fee of $500. Cardholders can earn one point for every dollar spent on eligible purchases and 1.3 points per dollar spent for everyday purchases at gas stations, supermarkets, drugstores, parking merchants, and for commuter transportation.
Citi also has a ThankYou Premiere Card with a $125 annual fee. Customers earn 1.2 points for every dollar spent on purchases at supermarkets, gas stations, and drugstores, and one point for every dollar spent on all other purchases.
Next: New prepaid cards