Your Credit Cards Guide

In 2011, there were monumental happenings across the globe: the uprisings across the Arab world, the ending of the war in Iraq, and the death of Steve Jobs, just to name a few. But in the credit card industry, it was mostly business as usual: the card companies searched for revenue streams, the cardholders stressed about paying their balances, and the economy continued to struggle.

However, as we look ahead to 2012, there may be a few events and trends which will have an impact on the way we use credit cards. So here are our predictions for the new year:

 1. We’ll start seeing credit cards that are more secure. In 2011, Visa began the transition from the current magnetic-stripe cards to chip-and-PIN cards. The newer cards contain an embedded computer chip which stores sensitive data and can only be accessed when paired with a customer’s PIN number. Chip-and-PIN cards sharply reduce the odds of fraud and identity theft (to the tune of 80% in France) because the data can’t be swiped from an external magnetic strip. However, it will take a few years before all retailers are equipped to process the new cards.

 2. Cash back will make a comeback. Sure, credit cards rewards and airline miles will still be a popular incentive for customers. But with the introduction of Capital One’s Cash MasterCard and its 50% cash back bonus after each year of membership, the spotlight has shifted from points to currency. Undoubtedly, a few other banks and credit card issuers will try to follow the trend with either new credit card products or enhanced cash back incentives on current cards.

 3. Banks may get creative with debit card fees. One of 2011′s few newsworthy stories in the consumer credit industry was the announcement and subsequent rescinding of monthly debit card fees by Bank of America and a few other issuers. The banks were attempting to replace revenue lost due to federal legislation which capped the debit card swipe fees which they could charge retailers. A consumer backlash caused BofA to jettison its proposed $5 monthly fee – but you can be sure that they will try some other “innovative” way to improve their profit margin.

 4. Mobile phone transactions will lose their luster. The newest and hippest way to use your credit card in 2011 involves tying your account to your mobile phone and paying for products and services by waving your smartphone screen across a scanner. That way, you never have to dig into your purse or wallet for your card. But this method is ripe for thieves and hackers to prey upon consumers’ desire for purchasing convenience. That’s why we’re predicting an uptick in credit card fraud via smartphone pilfering or hacking in 2012.

Of course, we don’t have a crystal ball. But based on the trends and events of 2011, we’ve got a fairly good idea of what the new year will bring to credit card users and issuers — and we’re pretty sure that it will make 2012 a bit less mundane for the industry.

Image: inc.com

Similar Posts:

• Five Top iPhone Apps for Credit Card Users
• Credit card use falls as customers avoid expensive payment fees
• Do you feel secure banking via mobile phone?
• Issuers Ramp up Credit Card Rewards
• Decoupled Debit Cards: the Next Rewards Checking Casualty?