5 Important credit card predictions for 2014

For years we have been using credit cards to buy stuff from stores without needing to have cash in your hands. The technology that goes into credit cards has remained quite unchanged, although the technology hackers have used is much further! Various pricing structures, offers and discounts have kind of remained the same since a long time. If you look at all these years, there has been no revolutionary change in the credit card business. 2014 is a year which could be a beginning for us to see changes in various sections of the credit cards business. Some changes are expected to be good for the customer, while some will be nasty. We will look at 5 predictions for the credit card business in the coming year.

1. Credit cards have been using age old magnetic strip technology to store the customer’s sensitive data. The magnetic strip is not at all secure. There have been many online database break-ins when many hackers have stolen millions of credit cards. All they have to do is take that information and put it in a magnetic strip on any plastic card and it will work like the original one. Because of that, the credit card companies will have to implement a secure way to storing electronic information over cards and that would be done using tiny chips. By 2015 all the customers must possess cards having the electronic chip or the company would be liable to face legal complications.
2. Federal bank has made other banks have hard time to earn profit from interest. As a result, banks are trying to find out new ways to squeeze more money out of their customers. The interest income has dropped or remained unchanged while the income from late fees and over-limit charges have grown. Therefore, the banks are planning to increase the fees to gain more profits and we will likely see an increase in the coming year.
3. Lesser international transaction fees will another great thing for customers. Many of us have started doing international transactions on increasing basis because of the e-commerce revolution. Many of us also travel abroad frequently and keeping this in mind, the credit card companies might reduce the foreign transaction fees in the coming year.
4. Not everyone uses the card in a same way. There are people who use it heavily for online use while others use for travelling abroad or some might use lightly in case they run out of money. Banks have taken note of the user’s spending statistics and the rise of personalized cards will be seen in 2014. There will be personalized credit card offers for the people with different spending habits. The banks are looking forward and trying hard to make their card stand up among the several credit cards customer might own. There are several top travel cards rated for 2014 which give you zero foreign transaction fees. For example, the chase Sapphire preferred card has several bonuses meant specifically for travelers and those likely to spend money on hotels and travelling.
5. The last prediction is about the current APR rates. The Fed reports that current APR stands at 15%, an average of the entire USA. The APR can vary between 12% and 23%, this is already much higher and the Fed is looking forward to raising it, but that won’t possibly happen in 2014. In order to increase the APR rate, the unemployment rate must go down first, which would possibly happen around end of 2014 or 2015. So, this is another good news for customers.