In 2022, we got revenge. Revenge spending, revenge travel — we were determined to make up for time we lost amid the height of the COVID-19 pandemic. But the economy had other plans, and inflation and rising interest rates started to limit the fun. Over the past year:
Here’s what may be in store for credit cards in 2023.
1. Credit card companies could re-tighten their belts
Earlier in the pandemic, credit card issuers toughened their lending practices. They required higher credit scores to qualify for many cards and limited balance transfer offers (only to bring them back later). According to NerdWallet’s 2021 Consumer Credit Card Report, close to 1 in 5 credit card holders (19%) reported that the limit on one or more of their credit cards decreased since the pandemic began.
In 2023, concerns of a recession continue, and that could lead credit card issuers to become more conservative in their lending practices again, according to Jessica Duncan, director of research and insights at Competiscan, a company that tracks and analyzes direct marketing activity. This may eventually affect credit limits and the availability of balance transfer credit cards this year.
2. Interest-lowering options will be popular
High credit card balances, combined with high interest rates, have consumers looking for ways to lower the cost of their debts. Balance transfer credit cards remain an option for those who qualify, and they aren’t just for new applicants. You may receive compelling balance-transfer promotions on cards you’ve held for a while, too.
Card issuers are also more heavily publicizing their built-in buy now, pay later features to compete with third-party companies that offer installment plans at the point of purchase, according to Beth Robertson, managing director of Keynova Group, a financial services intelligence firm. Robertson notes that programs tied