What Can Credit Card Users Expect In 2012

Over the past few years, the credit card industry has experienced numerous changes.  Some of these changes, such as a new rule limiting fees for late payments, have been welcomed by consumers.  On the other hand, there have been some negatives.  People with poor credit have found it more difficult to get standard credit cards and people with average credit are getting fewer and fewer offers for rewards cards and 0% introductory rates.

Some new changes are on the way in 2012, and some current trends will continue throughout the next year as well.  Here’s what to expect in 2012.

1. More people will be using credit cards.  During the last two quarters of 2011, credit card use was on the rise (after a years-long slump brought on by the economic downturn).  Credit card companies have been scrambling to take advantage of the renewed interest in plastic.  They are trying to hedge their bets by attracting people with good credit scores (who are less likely to default or go bankrupt).  They are wooing these would-be customers with better-than-ever introductory bonuses of up to 5% cash back or generous bonuses in rewards points or airline miles.  As long as the economy manages to keep its head above water, consumers can expect this trend to continue.  This might be a good reason for people with poor credit to start working to improve their score.

2. To improve their score, people with low credit will be able to use secured credit cards.  These cards, designed for people with low credit scores who want to bring their score up, are surging in popularity.   In 2012, more people than ever will be using this credit rebuilding tool.

3. Another financial tool that will be popular in 2012 is the prepaid debit card.  These cards are starting to come into their own, with more and more people using them instead of credit cards or bank-issued debit cards.  As major banks continue to raise fees, which drives away customers, people will seek alternatives to traditional checking.  Even if major banks scale back their basic checking account fees, people will still most likely be in search of another way to manage their day-to-day finances.  Prepaid debit cards are one of the more obvious of these alternatives.  The result: more options for prepaid cards and more people choosing them over regular checking accounts.

4. It will be easier to get credit.  Credit card companies (and other lenders) are beginning to relax after tightening up their standards during the economic downturn.  More people will find that they are able to get credit in the near future.  The major rewards deals may still be out of reach for people with poor credit, but actually obtaining credit will be easier in 2012 than it has been in the past few years.  People in low-risk categories will have no trouble signing up for as many cards as they want, and even people with poor credit scores will have the options of secured credit cards and low-limit cards.

5. There have been some major rules changes and new, consumer-oriented laws concerning credit cards passed in the past few years.  Those expecting more in 2012 might be disappointed.  The government is focused on the bigger picture of how to fix the economy and the tax code, and will most likely not be interested in further credit card reform.

6. That doesn’t mean that there won’t be any significant changes.  2012 will bring a battle between credit cards and debit cards.  Legislation limited debit card swipe fees for retailers, but no limits were put on credit cards.  Retailers are trying to find ways to get people to use debit cards (or cash) instead of credit cards.  Expect to see register discounts for debit card users or maybe even a dual pricing system (already at place in some gas stations).

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