NerdWallet: As interest rates climb higher, here’s what’s in store for credit cards this year

by | Feb 15, 2023 | Stock Market

This article is reprinted by permission from NerdWallet.  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: 
Buying and borrowing became more expensive. Inflation had consumers leaning more heavily on credit cards, and thanks to multiple interest rate increases, credit card debt became more expensive. As of November 2022, credit card interest rates reached an average of 20.4%, according to data from the Federal Reserve Bank of St. Louis.

Crypto collapsed. Between big price drops and exchanges filing for bankruptcy, the much-hyped launches of crypto-earning credit cards quickly lost their appeal (and in some cases became unavailable to new applicants and existing users).

And yet, travel stayed strong. Passenger volume data from the Transportation Security Administration showed that Thanksgiving 2022 approached levels similar to Thanksgiving 2019. Nearly 2.5 million travelers passed through TSA checkpoints the day before Thanksgiving in 2022, compared with just under 2.9 million on the same day in 2019. To capture the hearts, minds and wallets of Americans returning to the skies, travel rewards credit cards offered big sign-up bonuses during the holiday season.

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 …

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