Our 2023 credit card predictions and trends: What did we get right and wrong?

A year ago, we made predictions about what would happen with credit card rewards in 2023. Now, let’s revisit those predictions and assess their accuracy.

One of our predictions was that best-ever offers would be rare in 2023. This turned out to be correct, as 2021 and 2022 saw much more lucrative welcome offers than this year. Many popular credit cards, such as the Chase Sapphire Preferred® Card and The Platinum Card® from American Express, featured lower welcome offers compared to the previous year. However, some of Chase’s cards, like the Chase Freedom Unlimited®, did offer special double cash back offers.

We also predicted a shift from premium cards to those with financial benefits, and this was correct. With economic uncertainty and high interest rates, consumers have been shifting towards cards that offer cash back, attractive balance transfer rates, and low interest on purchases.

Another correct prediction was that credit card debt would increase. Total debt on credit cards reached $1 trillion for the first time in 2023, reaching an all-time high of $1.08 trillion in Q3. This has led consumers to focus on paying down debt and shifting to credit cards that offer more immediate cash-back and interest-saving benefits.

We partially predicted an increase in “buy now, pay later” offerings and usage. While there hasn’t been a significant increase in the number of buy now, pay later services, the usage of these services has increased. According to Bankrate, 10% of consumers planned to use BNPL services for winter holiday shopping in 2023.

Consumers remain wary of crypto-earning cards, which was another correct prediction. Despite the stability or increase in value of cryptocurrencies in 2023, consumers are still hesitant to receive crypto rewards when spending cash on daily purchases.

Our prediction that 2% cash back would become the standard going forward was partially correct. The best cash-back credit cards, like the Citi Double Cash® Card, now offer 2% back on all purchases. This has made it difficult for credit card issuers to acquire new customers with cards offering less than 2% back. Chase currently offers an unprecedented double cash-back offer on its Chase Freedom Unlimited card to attract new cardholders.

We predicted that annual fees would continue to climb, and this was correct. We have seen annual fees increase on popular travel rewards cards, primarily from American Express.

Our prediction about more niche and partner products partially came true, as some brand partnerships between credit card issuers and brands expanded in 2023. However, there were not as many new product launches as anticipated.

We also predicted fewer business-related travel perks, which was correct. Business travel continues to lag behind leisure travel, prompting issuers to shift business credit card perks away from travel and towards spending.

The prediction of more complimentary subscriptions and tough-to-use credits was correct. We have seen more merchant-specific statement credits with stricter restrictions.

Finally, our prediction that customers would look for travel protections after previous travel disruptions was partially correct. While there have been fewer travel disruptions in 2023, consumers still seek travel protections either through travel insurance or credit cards that offer them for free.

Overall, our predictions about credit card rewards in 2023 were mostly accurate. The credit card industry has seen innovative developments and persistent challenges throughout the year. As we move into 2024, it will be interesting to see how these trends continue to evolve.

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