5 Takeaways from the 2015 Credit Card Landscape Report
A traditional finance study may not seem like interesting reading, but we can learn a great deal about the typical U.S. consumer and the state of our current economy by looking at the trends found in inside one.
Take a recent study on the 2015 credit card landscape from CardHub, for example. By picking through the data of more than 1,000 credit card applicants, we can draw the following conclusions about credit card customers:
1. Credit card rates are continuously changing
On average, interest rates rose 1 percent relative to Q4 2014, with two card categories seeing the most change over the past year.
Student credit cards, on one hand, saw the largest increase at 3.3 percent. However, the subprime market is getting the biggest break, with many consumers in that category seeing their credit card interest rates drop by a full percentage point over the same period.
2. You’ll get a better deal for balance transfers
The study indicates that new debt is not the goal for most lenders. In fact, the best terms for new cards comes in the form of attractive balance transfer offers of zero percent interest (plus fees) for most new customers.
And while you can still find no-interest terms for those purchase checks that come with a new account, the perks are generally for a shorter time period and may include a higher initial fee.
How can you take advantage of these balance transfer terms? Look for cards that offer the best combination of interest rates and transfer fees.
Understand that a higher initial transfer fee may cancel out the benefits of a zero percent interest rate, especially if your balance is low and you plan on paying it down early.
3. Cards will pay more to get your business
If you thought a sign-up bonus was good last year, wait until you see some of the offers being put out by cards today.
In fact, if the study showed any favorable trends toward the consumer this past year, it was that lenders are willing to put their money where their mouths are to get you signed up.
What makes a good bonus sign-up offer? Personal preference and spending habits will determine if the value of a bonus offer is indeed a good one for you. Analyze your previous year’s spending habits to see how a new card can seamlessly fit into your budget and not force you into purchasing habits that are unnecessary or harmful.
Avoid any card that creates the urge to spend more than you should or on luxury goods and services you can’t afford.
4. Cash is costly
Even with the transparency that credit cards offer with regards to cash-advance fees and interest rates, consumers aren’t avoiding them.
How can you decrease your reliance on cash? For many people, getting cash from an ATM with their credit card is a habit. For others, it’s a matter of convenience that arises when they don’t plan ahead. For others, it’s a perceived need for when money is tight and a regular credit purchase won’t do.
Study your cash-advance behaviors to see why you tend to rely on this costly method. Chances are good that you can prevent many of the trips to the ATM that you will end up really paying for later.
5. Your voice is being heard
Credit card companies do listen, and this newest study looked at the most common complaints coming from borrowers.
Dissatisfaction over fees was on the decline compared to 2014, which could be seen as a positive change. The top complaint involved cancelling or closing accounts.
How can you be sure your credit card company listens to you? Early and effective communication is key to maintaining a healthy relationship with your credit lender.
If you need to change a due date, inquire about contract terms. If you’re simply having a difficult time making your minimum payment, it’s best to contact your card as soon as possible to allow them the most time to work through the problem with you.
Most cards realize that you have many options for your credit business and want to keep you satisfied. Giving them ample time and opportunity to field questions or frustrations can help you stay a happy customer and can minimize damage to your credit history.
Does your credit have some serious damage already? A credit repair firm could help you fix the situation.
The 2015 Credit Credit Card Landscape Report provides even more detail into the habits of consumers. For detailed data, graphs, and previous reports, see the original findings at CardHub.com.
Photo credits: quizzle.com, cardhub.com