While some may not prioritize resolutions, the new year often brings renewed hope and a sense of optimism (a sentiment that deepens for me with each passing year). In the realm of personal finance, the new year presents an opportunity to reflect on past successes and challenges, but more importantly, to set meaningful goals for the year ahead.
To this end, I am pleased to have been invited by my editor to contribute our annual article on the latest credit card trends and predictions. This piece features insights from renowned experts in the field and promises to be an engaging read.
By being familiar with finance trends, you can better position yourself to take advantage of things such as 0% financing and generous credit card bonus offers. Such knowledge can put you in the driver’s seat when it comes to profiting from credit cards.
Before we discuss 2025 trends, let’s briefly recap how accurate our card predictions for 2024 were as follows:
- Cardholders will finally get relief from record-high credit card rates.
- Balance transfer offers will remain robust, but will become harder to get.
- Cash-back credit cards will remain king among reward cards.
- Travel and airline credit card rewards will continue to soar.
While it’s difficult to predict the future with certainty, the accuracy of our previous forecasts is noteworthy:
- Rates did finally start to fall toward the end of last year as the Federal Reserve reduced rates multiple times. While rates on average still remained at historically high levels, this did give some cardholders who carry a balance a bit of much-needed relief.
- Balance transfer offers, particularly 0% intro rate offers, flooded mailboxes during 2024. However, card issuers did increasingly seek applicants with high credit scores as card delinquency rates climbed.
- We hit the nail on the head with this one as cash back cards grew in popularity as the financial health of cardholders declined in 2024 according to a study done by J.D. Power.
- Travel and airline cards definitely grew in popularity. According to one study, the travel card market is witnessing an impressive 11.8% compound annual growth rate.
Now that we have looked over last year, let’s focus on 2025 credit card trends that we expect to see.
Trend one: Credit card rates are likely to fall, but slowly and not by much
Predicting interest rate swings isn’t an exact science and is wrought with complexities. This will likely especially be the case for 2025. Ruth Susswein, director of consumer protection for Consumer Action, a consumer education and advocacy organization, notes that “it’s always an educated guess, but this year, it’s extra hard to predict what will happen with interest rates” given such things as a new political landscape.
“What we do know is that credit card interest rates are very high — averaging between 22.8% and 26.8% — and likely to remain high,” she adds. “That means making at least the minimum payment in 2025 is likely to be tough for even more people. Nevertheless, the goal ought to be to pay down that expensive debt as much as possible as soon as possible.”
The bottom line is that while many experts do predict at least one or two more rate cuts in 2025, it’s unlikely that consumers who have card debt will see much relief from high card rates. Beverly Harzog, credit expert and podcast host of “Your Personal Economy,” sums it up well by noting that “Rates should get a little lower, but the average APR is over 20% and it’s difficult to get out of debt when the rate is still so high.”
One possible thing to look out for is a 10% interest rate cap proposed by President-elect Donald Trump while on the campaign trail (more on this below). A related positive prediction is that there will likely be an increase in 0% balance transfer offers this year, which have been proven to reduce card debt when used responsibly. According to credit card expert Jason Steele, low-rate balance transfer cards will see a nice upward trend in 2025 as card debt is likely to increase, particularly after the holidays.
He further expects that we will see:
- Numerous introductory rate offers with a 0% APR that last for 21 months, which is the longest term offered in recent years. A current example is the card_name, which offers intro 0% APR for balance_transfer_duration_months and 0% for intro_apr_duration before regular reg_apr,reg_apr_type APR applies. All balance transfers must be completed within 4 months of account opening. Citi is a CardRatings advertiser.
- Perhaps a card issuer will even exceed 21 months.
- These offers will become more common on rewards cards.
➤ SEE MORE:What is the average credit card interest rate?
Trend two: Potential 10% credit card rate cap could draw bipartisan support
While potential interest rate cuts probably won’t help cardholders swimming in card debt too much, a proposal by President-elect Donald Trump to temporarily cap rates at 10% could help, if it actually comes to fruition.
Similar caps proposed in the past haven’t seen much bipartisan support and, not surprisingly, haven’t gotten much traction. In fact, some have even been criticized by some consumer advocates.
Lynnette Khalfani-Cox, author of the NY Times bestseller “Zero Debt: The Ultimate Guide to Financial Freedom” and affectionately known as the Money Coach, predicts that the Trump proposal could actually get bipartisan support and make strange bedfellows.
“I predict we’ll see some pretty wild alliances forming in Washington around card reform next year,” she says. “Already we’ve had President-elect Donald Trump saying he wants to cap rates. Almost immediately, two Democratic senators – Bernie Sanders and Elizabeth Warren – supported the concept. So keep your eyes on unlikely partnerships crossing party lines as lawmakers hash out new rules around how credit cards are priced.”
She adds that “While those headline-grabbing caps might not make it through exactly as proposed, don’t be surprised to see some kind of compromise emerge – maybe more transparency requirements or tiered rate limits rather than a hard cap.”
Given the potential for support from both parties, it’s likely that we will at least see something positive transpire, even if it’s temporary and scaled back.
Others are less optimistic. Susswein opines that “It’s hard to know what Trump will do, but I would not expect him to follow through on his promises to cap rates. I think that was merely a campaign pledge.”
John Ulzheimer, president of The Ulzheimer Group and founder of CreditExpertWitness.com, believes there could even be negative unintended consequences.
“If this is true [i.e. the proposal passes], then my prediction is card issuers will reduce the amount of cards or credit limits available to consumers who have lower credit scores, the subprime borrower,” he says. “Interest rates are used to subsidize risk so someone who pays higher rates is doing so because they’re a higher risk borrower. If you take away a card issuer’s ability to subsidize risk then they’re going to gravitate towards lower risk consumers [with good credit] and also limit credit limits for those who are still approved with lower scores.
“Certainly paying a capped rate of 10% is going to save consumers a lot of money to service their credit card debt, but there’s always another side to the story.”
Trend three: Rewards credit card offers will continue to be aggressive
Rewards credit cards will likely remain very popular in 2025 despite some challenges in the industry, such as surcharges charged by restaurants and small businesses. In fact, 71% of consumers have a rewards, points or cash-back card of some sort according to a survey conducted by Ipsos last spring.
You can also expect aggressive sign-up bonus offers, a trend that we witnessed in 2024. For instance, the card_name currently offers an impressive $250 to use on Capital One Travel in your first cardholder year, plus 75,000 bonus miles once you spend $4,000 on purchases within the first three months from account opening, that’s equal to $1,000 in travel. The card also earns 2X miles per dollar on every purchase, every day, and 5X miles per dollar on hotels, vacation rentals and rental cars booked through Capital One Travel.
On a related note, there will likely be enhanced travel perks associated with travel credit cards, particularly when it comes to airport lounges. Case in point, new Chase Sapphire lounges are set to open in Philadelphia in early 2025, Las Vegas in mid-2025, and Los Angeles at a later date.
Beyond travel cards, you can expect more flat rate 2% cash back card offers, another trend we noticed in 2024. These cards typically offer a flat 2% cash rebate on all purchases with no caps- consumers like their simplicity and cash reigns supreme!
While all of this is welcome news, don’t expect all good news. Steele cautions that “’Pointflation’ will accelerate. Cards will offer an increasing number of points and miles for purchases. But don’t get too excited, as airlines and hotels will charge a higher number of points for their awards.”
Susswein adds that Delta is now requiring more miles to earn a free flight, Alaska Airlines is rewarding fewer miles when you fly and the Delta Sky Club (Delta’s airport lounge) is limiting access to some perks.
Other 2025 credit card predictions
A dual credit score system may offer cardholders more choices
Khalfani-Cox suggests watching the mortgage world’s big, upcoming move in 2025 to embrace two credit scores — both FICO 10 and the VantageScore 4.0 — and I predict we’ll ultimately see this spill over into credit cards. It may take a while, but watch for card issuers to get creative by letting you pick which score they use for your application. This could be a game-changer if you’re one of those folks who scores better under one model than the other – especially if you’re newer to credit or bouncing back from past challenges.
An increasing trend in credit card innovation
Khalfani-Cox also predicts that consumers will notice a whole new breed of secured credit cards hitting the market. Secured credit cards are evolving beyond traditional models. Expect to see innovative features such as security deposits that shrink as you prove your creditworthiness, or cards that automatically graduate you to unsecured status based on your payment history.
Gerri Detweiler, credit and small business expert and co-author of “Finance Your Own Business: Get on the Financing Fast Track,” expects that we’ll see more creative card products coming out of Fintech companies. Regulations will likely be eased which may mean more innovation, but also more risk for both companies and consumers.
On a related deregulation note, Susswein believes that an existing cap on late fees may disappear. The Consumer Financial Protection Bureau capped late fees in 2024 at $8 — down from about $32 — but she says she will be surprised if that rule survives in 2025.
More pressure to limit or cap credit card interchange fees
There’s been legislation introduced in the past to cap credit and debit card interchange fees and to push for more competition between card networks– namely Visa and MasterCard.
However, this doesn’t necessarily translate into relief for consumers. Susswein explains that “While there’s more pressure on Visa and Mastercard to reduce merchants’ interchange fees to ultimately save money for the consumer, there’s no guarantee that retailers will pass any savings on to the customer. Some stores currently pass card costs onto customers in the form of a separate surcharge (2% or more). Only a few states ban surcharges.”
Others even think proposed caps could have a negative impact. Herzog points out that “The Credit Card Competition Act (CCCA), if passed, would impact interchange fees. Card issuers would lose revenue and this loss could result in fewer rewards being offered to cardholders.”
She adds that there is also a possibility that annual fees will increase to cover the cost of offering rewards, especially if the CCCA gets passed. She cautions that consumers need to be diligent about reading emails, texts and snail mail from issuers. If your annual fee goes up or your rewards program changes, “you need to know as soon as possible so you have time to make decisions.”
Final thoughts
While it is certainly our hope that these predictions regarding personal finance trends in 2025 will equip and empower you, please be advised that not even the experts know for sure what will actually happen. I think the old adage that says “hope for the best, but prepare for the worst” certainly applies here.
Dr. Mary Ann Campbell, certified financial planner and “edu-tainer” in the personal finance space, agrees. She says “Trying to adjust to unknown economic changes is like navigating through a dense fog — you can’t see what lies ahead, and every step requires careful consideration. As I wait to see what credit card changes take place, it’s important to have a firm grasp on the basics of good credit card usage.”
She offers the following credit card advice for 2025:
- Pay on time, and have at least the minimum payment automatically drafted from your checking account.
- Pay more than the minimum as often as possible.
- Keep your credit utilization under 30%. If you’re issued a line of credit of $10,000; don’t use more than $3,000.
- Know the different interest rates (APRs) on your cards for purchases, balance transfers, and cash advances.
- While reward cards and cash-back cards are attractive, don’t get one unless you can pay it off in full monthly. Otherwise, you’re eating up your bonuses!
In short, Campbell emphasizes that no matter what the latest credit card trends are, you should pay close attention to the basics and use your cards responsibly.
