Five Credit Card Trends That Could Affect You

/ BY / Credit Cards

1. You may be able to get a credit card even if you have not-so-great credit.

A year ago, only 27.3 percent of credit cards went to non-prime borrowers—those with credit scores lower than 700, according to a recent report by TransUnion (one of the three major credit bureaus).

Now, however, almost one-third of credit cards (31.2 percent) are issued to people who fall into the non-prime category.

But the banks are still being cautious. TransUnion points out that right before the recession, almost half (45 percent) of all credit cards went to people with less-than-stellar credit.

2. Your credit spending power may increase.

The TransUnion study also reported that banks are issuing more credit now than they did previously, with an average limit of $5,230 on a card. That’s up almost 30 percent from the average credit limit they extended back in 2011.

3. Your next credit card is likely to be a rewards card.

If you’re like most Americans, you enjoy earning cash back, airline miles, points and other benefits when you’re using your credit cards—and the numbers prove it.

The American Bankers Association Credit Card Market Monitor reported that over the last five years the number of credit card rewards accounts has increased by 11.2 percent while the number of non-rewards accounts has decreased by 51.3 percent.

At the same time, total spending with rewards cards has gone up by 47.2 percent, but spending on non-rewards cards has decreased by 35 percent.

4. Your next credit card may contain something special

Did you know that the U.S. leads the world in global credit card fraud? The country wins that dubious distinction primarily because the account information on our cards is read via a magnetic stripe on the back—an outdated and easily hacked technology. 

So over the next year and a half, you may get a new kind of credit card from your bank, one that contains a special microchip to provide better security. This is called an EMV chip (for Europay, MasterCard and Visa, the companies that originally adopted the technology).  Some of these cards will be chip and pin (with an EMV chip and a pin number required for use), but most will be chip and signature cards (transactions made with the EMV chip and your signature).

Although the U.S. lags far behind when it comes to adoption of this more secure technology, industry experts predict that approximately 70 percent of U.S. credit cards will contain an EMV chip by the end of 2015.  (More than 81 percent of cards in Western Europe are already using the technology.)

U.S. banks are issuing EMV cards at a rate of 5,000 per day, so watch your mailbox starting this fall for your EMV credit card.

6. You may not be using a card much longer.

While the credit card issuers aren’t likely to recall the plastic card that you carry in your wallet, they are all exploring new ways to make payments easier and more secure.

You probably know about the apps for mobile phones that store your credit card account information and allow you to make purchases simply by tapping your phone against a payment terminal.  But other, newer technologies are also being tested. A recent CNN article mentioned a biometrics payment program now being used in one Swedish city; customers simply swipe the palm of their hand into a scanning machine and then enter a PIN number to charge a purchase. Wearable devices such as wristbands may also function like a plastic credit card.

It’s too early to predict which technologies will become popular but it seems clear that in the future you won’t be limited to whipping out a card when you want to make a purchase.

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