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My Credit Card Industry Outlook – What To Expect For The Rest of 2013 and Beyond

by on June 19, 2013 · 32 comments

in Credit Cards

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I recently met with several different prominent credit card issuers and I frequently have contact with industry insiders, so I thought I’d pull together my general thoughts from these meetings and what I expect to happen for the second half of 2013 in terms of sign-up bonuses and other new developments.

In general, I see the credit card industry heating up and that has already been seen with great credit card bonuses like the recent limited-time offers of 75,000 Membership Rewards points for the Business Rewards Gold card from American Express and this week’s limited-time offers of 60,000 Ultimate Rewards points on the Chase Ink Bold and Ink Plus cards.

Like many other sectors of the economy, the credit card markets are heating up as consumers and businesses start spending again, and while we didn’t see too many jaw-dropping bonus offers in the second half of 2012, by contrast, I expect to see some great offers in the second half of this year.

More Attention On Business Credit Cards
As the economy improves, more and more people are starting their own ventures – either outright or as a side business, and many credit card companies are picking up on this and beginning to make the bonus offers on their lines of business credit cards more and more attractive. Starting a business involves spending money, and the banks want that business. They realize that these are the high-value customers and that there is a lot of competition for their spending, so they are going to be offering better and better sign-up and spending bonuses and more attractive perks and benefits to entice them.

Just note that business cards are not regulated by the Credit CARD Act of 2009 and generally have fewer protections and higher fees. However, they also have some of the highest sign-up bonuses and category spending bonuses like the Ink cards’ 5X on office supplies and telecommunications and 2X on hotels and gas; the Business Gold Rewards card’s 3x points on airfare, 2x points on purchases in the U.S. for advertising in select media, gasoline at U.S. stand-alone gas stations, and shipping; and the Capital One Spark Miles Business and Capital One Spark Miles Cash cards’ 2X points per $1 on all purchases. The great thing is most issuers will issue pretty much any small business- even if a brand new idea or side consulting project, by allowing consumers to apply and use their Social Security Number in lieu of an Employee ID Number (EIN) as sole proprietorships. Note: the credit card companies are all very keen on bringing in actual small businesses so I wouldn’t be surprised to see these rules tighten in the future as they raise the threshold of what type of business qualifies for these lucrative offers.

More Limited Time Offers
Limited-time sign-up offers are not exactly new – many of the best credit card offers that periodically come around like 100,000 Avios for the British Airways Visa or 30,000 points for the Starwood Preferred Guest Amex stick around for a couple months, but what is new is that many credit card companies are offering truly limited-time offers – sometimes only a week, a day or even several hours on truly lucrative points bonuses like January’s 100,000-point offer on the Amex Platinum card.

And consumers have been responding since they know that these offers are historically high and won’t be around for long. They have gotten in the habit of applying immediately and credit card companies have noted how extremely effective these offers are at driving new customers and account openings. I have no doubt that we will be seeing more and more (and hopefully higher!) LTO’s for the rest of the year.

More Spend Threshold Bonuses and Benefits
As credit card companies start attracting new consumers, their second challenge is keeping them engaged and getting them to put more of their spend on these cards. One way to to so is to add category spending bonuses like the Ink cards’ 5X on office supplies, and spending threshold bonuses like the British Airways Visa’s “Travel Together” companion ticket when you spend $30,000 on the card in a calendar year.

TTT

I’d love to see more spending bonus perks like the BA Travel Together ticket.

I applaud this because it is a win/win- more spend is brought into the issuer, and the consumer benefits from more perks. While bonus categories are nice, I’d rather see more general spending thresholds (like how you can spend $30,000 on the Amex Premier Rewards Gold and get a 15,000-point bonus) because keeping track of so many categories on so many cards is becoming a chore and I like cards that give bonuses on everyday spend (like Chase Freedom Exclusives 10% on all purchases).

Improved Benefits

The United Explorer card now has no foreign transaction fees.

The United Explorer card now has no foreign transaction fees.

Issuers are also looking beyond sign-up bonuses and spending to improve the products they’re offering. For example, the United Explorer card recently removed foreign transaction fees, and I see that as a trend and hope that American Express lifts these annoying fees on both its Starwood business and personal cards, and the Business Rewards Gold. After all, how can they promote these cards as travel products when they have penalties for using them abroad?

Focus on Gaming
While it is still easy to rack up lots of points and miles on credit cards periodically, and banks are willing to issue multiple rewards cards to the same consumers (some more willing than others), almost every bank I have spoken with recently has stressed that they don’t want a lot of new customers, they want the right customers. This is similar to the recent revenue requirements that Delta and United have implemented to weed out the “cheap elites”- those who derive a lot of value from the elite program and do so on the cheapest/mistake fares and by using backdoor methods like constantly status matching/challenging, but never bringing new business.

That said, if you are interested in getting in on the best credit card offers, you need to take a more comprehensive view of your finances and banking. I would recommend being as good a customer as possible and not blatantly opening cards and closing them right away simply for the bonuses since banks will most certainly start to react negatively to you as a customer. Chase axed a lot of cardholders who abused a 5% rebate perk on the AARP and American Express now conducts financial reviews of customers that they identify might be misuing or abusing card benefits (or misstating information on their applications).

Keep your cards open, spend on them when not just trying to get a bonus or max out a spend category. While this may not seem like “maximizing” at the time, you need to think long-term. All rates being equal, think about getting checking accounts from the key issuers like Chase and consider them for auto/home loans, etc. The more diverse and profitable you are as a customer, the better chance of staying in a bank’s good graces.

Compliance Issues
While competition is heating up amongst the credit issuers, all are stressing compliance to credit card terms as a top priority. That means that as a blogger, I need to ensure that every piece of information I pass along about a credit card as an affiliate is accurate. This can be tricky with numerous offers that constantly change, but times are changing and with the Consumer Financial Protection Bureau out and about putting every bank and credit card issuer under a magnifying glass, it is critical that all offers need to be legitimate.

I’ve spoken with other bloggers and we are all working to come up with solutions that are “compliant” while still delivering the deals our readers demand. I still commit to posting the top deals on my Top Deals page and I absolutely still cover deals that are not my affiliate links, but regardless, there is still a lot of concern over the right deals being promoted at the right times and that you, my readers, will be getting the best possible offers at all times.

On the consumer side, this could be a good thing because in the past people have applied for offers and not gotten bonuses or other terms fulfilled because those offers were not legitimate at the time of application even though the application pages were still up. I believe it is the responsibility of banks to make sure their offers are compliant across all channels, and in fact, banks are liable for lawsuits if that happens, so they want to make sure that if you apply and are eligible, you get the points. I foresee issuers following Amex’s lead and post the exact criteria for getting a signup bonus – like you must not have had XYZ cards in the last x year(s) – in order to avoid these problems in the future.

American Express states exact criteria for being eligible for a sign-up bonus on the application page

American Express states exact criteria for being eligible for a sign-up bonus on the application page

Overall, I have a very positive outlook on the future of rewards credit cards and bonuses, especially as we enter the second half of 2013. However, as credit card companies give more, they’ll want to take more as well and as always, you shouldn’t get into this game if you can’t manage yourself financially, since making mistakes (like late payments) means getting hit with lots of fees that wipe out the value of your points.

Be aware of your credit score and do you your best to keep it in good standing.

Be aware of your credit score and do you your best to keep it in good standing.

If your credit score isn’t in great shape and you’ve been on the sidelines, I’d recommend now more than ever to try to rehabilitate your credit and get your score up so you can get in on all the action that is coming our way. Ideally you want to be over a 700 with FICO, but I know readers who have gotten approved for premium cards in the mid/high 600′s.

For your reference, here are links to posts on understanding credit, educating yourself and getting in on the best deals:

How To Check Your Credit For Free
Understanding How Your Credit Score Works

When To Cancel A Credit Card

Do I Need To Have A Business To Get A Business Credit Card?

Ranking the Top Business Credit Cards

Top Current and Limited-Time Credit Card Offers

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • BNA_Flyer

    How much longer do you see the US Airways Barclays card lasting? I just got one for the sign-up bonus thinking the merged carrier will go with Citi.

  • Little Tea Blog

    How long do you see the Barclays Arrival 40,000 point offer staying around?

  • Thomas

    Hmm, the guy who
    Constantly shoves credit card links down his readers throats is saying that bonuses will keep being great… No conflict of interest there.

    Seriously though, the content of this article was interesting, but you again lost my trust by inserting about 25 cc links in it. You would gain a lot more credibility if you actually had a few points articles that didn’t focus around links….

    Your readers aren’t idiots. We don’t need an ink bold link in every day’s articles to consider applying.

  • thepointsguy

    Actually, wouldn’t it be more self serving if I said all bonuses were coming to an end, so get in on them now and apply, apply, apply?

    As for links in the post- if I’m going to reference an offer, I’m going to hyper-link it just like when I hyperlink past posts that are used as references. If you don’t want to click on it, then you can keep reading. But someone who maybe doesn’t read the blog every day and didn’t know about the offer still has access to that information without having to search for it.

    Appreciate the feedback and just wanted to let you know why all offers (affiliate or not) and past posts are hyperlinked.

  • thepointsguy

    My guess would be at least until the end of the summer, but I have no official information on that offer.

  • Cory

    Wow, there are people on all of these blogs who refuse to let any post with a cc affiliate link go without blasting the writer for. Credit cards are the central component of most people’s points earning strategy. CC info is what we want.

  • Juju

    Do you foresee another Amex 75k or 100k bonus in the pipes?

  • thepointsguy

    The card will go away after the merger is complete. No details have been given by Barclays yet.. but I’d suspect it will be gone by the end of the year

  • thetourvan

    So based on this no article that ever has any advertising associated with it on the website hosting said article could possibly be objective. It must be a dark place one lives to see everything as half empty as that.

    I feel bad for the journalist that constantly has to defend earning a living through advertising.

  • ER

    Ok, I’m missing out on some major bonuses by not having any business cards, but I do not do anything that can in any way be interpreted as having a personal business. In fact, I cannot have my own personal business on the side as a result of my current job. I know there are currently little to no questions asked when you apply for most business credit cards and my SSN should suffice, but it still makes me nervous. I don’t like the thought of lying especially when it comes to something dealing with my credit. Plus, I know it is at least smart to try to tailor your expenses on the business card for business-like expenses. Is my fear unwarranted?

  • Brian L.

    I’d be interested to see if/when any more cards will be issued with EMV chips. The Sapphire Preferred, for example, or the United Club card. Chase has been saying the UA Club card will have a chip since it was first introduced, and still nothing.

  • Guest

    As if on cue to prove that offers are improving, I just received this targeted Delta Platinum Business AMEX offer, which seemed like a good way to acrue 20K MQM with $150 annual fee and $5,000 spend in first three months. I wanted to pass it on to you in case it is available to the public, as it would improve the offering currently posted on the deals tab of your website.

    The top line said “Exclusive Offer for SkyBonus Members” and then: “Don’t miss the chance to earn up to 55,000 bonus miles, including up to 20,000 Medallion® Qualification Miles (MQMs).”

    Other fine print: Earn 25,000 bonus miles, (5,000 of which count as MQMs) after your first purchase on the Card within the first year of Cardmembership. Earn an additional 30,000 bonus miles, (15,000 of which count as MQMs) after you make $5,000 of eligible purchases on the Card within the first three months of Cardmembership.

  • Steve

    TPG, do you have any idea how I can opt into getting targeted offers? I read about one method somewhere on FlyerTalk, but am not sure it actually worked. Should I call the banks directly to ask them to opt me in?

  • Pingback: Crystal Ball Time: What's Ahead for Credit Cards in 2013?

  • Dscott

    I received the same offer this morning. The problem I have is this. I applied for the card yesterday and was approved, but for the one at the American Express website. Does anyone know if it is possible to receive the Exclusive Offer from SkyBonus Members after I already was approved for the other offer the day before. Seams a shame to lose out on such a great deal by just one day.

  • gwe

    “Constantly shoves credit card links down his readers throats”…???

    Please get a life, Thomas.

    No one forces you to read this blog, nor do they force you to click on any links in the content.

    Please take your envy elsewhere, Thomas — or at least grow a pair and make your log-in linkable so we can all see who you really are (likely a competitive blogger?), rather than being a troll here posting foolish criticism anonymously.

    Thanks TPG, for what you do. And thank you for being a good blogger by letting even your critics be posted.

  • hmm

    “I feel bad for the journalist that constantly has to defend earning a living through advertising.”

    Really? Please grab a clue — and quickly…

    1. TPG is not a journalist. He is a blogger and commentator on a specific topic of interest to likely hundreds of thousands of travelers.. And he does not hide that fact. Despite your implied accusation, none of his readers are victims. They are willing consumers of his terrific content, and gladly partake in the exchange of value when choosing to click on any of his affiliate links.

    2. All journalists in the USA, except for those in public broadcasting, earn their income from the advertising dollars collected from their publisher or broadcaster.

    You might find your point of view on journalism more acceptable living in a place like North Korea.

  • Josh

    I suggest this person learn the definition of the word journalist.

    a : a person engaged in journalism; especially : a writer or editor for a news medium

    b : a writer who aims at a mass audience

    Why read this website or any like it if no matter what the person writes you feel it is because they are paid to do so?

    That is a sad state of affairs when one is so anti-establishment that they cannot realize what is going on around them.

  • sfomsp

    Wouldn’t be so sure of that.

  • thepointsguy

    You really think they will keep issuing Dividend Miles when the program no longer exists?

  • ER

    Can someone please comment? I really want to get in on one of the Ink deals and the next 75,000 or 100,000 Amex Platinum deal if it’s no big deal for me to do so. Thanks!

  • Amun85666

    What I don’t get though, is that they restrict all of the lucrative bonuses and or perks to new card members. If they say they are looking for the right customer and not new customers, what about a person like me who uses the cards and is a loyal customer but would to upgrade products and get bonuses. It doesn’t make sense to me, loyal customers should be treated better.

  • thepointsguy

    You shouldn’t lie. If you aren’t comfortable with applying for a business card you shouldn’t do it. Plenty of other ways to get miles and points that won’t make you feel uneasy.

  • thepointsguy

    No one ever said only for new members- they want the right cardholders. Those who will get the card and use it past the sign-up bonus. They are well aware that current customers of competitors can be the ideal customer. I think there will come a time when they won’t want to keep giving bonuses to existing customers who want actually bring any additional spend/business to the company.

  • thepointsguy

    It can’t hurt- also make sure you opt in for marketing w your frequent flyer programs as well.

    Check out this post for more http://thepointsguy.com/2012/07/how-to-check-for-targeted-credit-card-offers-from-chase/

  • thepointsguy

    Amex is very strict about only approving you for what you applied for. You can try and ask though- never hurts.

  • thepointsguy

    I agree- would LOVE to see Sapphire Pref. I always ask and most issuers tell me more are on the way.

  • thepointsguy

    I wouldn’t be surprised to see another 75k on the BRG (but have no definite info). 100k on an Amex- probably only through targeted offers.

  • ER

    Thank you

  • john v

    how about new cards?? any hint of it? something innovative? a game changer?? I’m itching for something new.

  • Ricardo Seir

    Do you have any info on the referral bonuses? Amex SPG used to have a 5000 points referral bonus (some time 10000 for the business card) but they got rid of it…Are they coming back?
    Thnaks

  • Guillaume de Zwirek

    thanks for this post. in your expert opinion, any chance we’ll see chase sapphire preferred or the capital one venture rewards boost their bonus this summer? i’d hate to go in on the venture rewards for 10k when a 100k bonus is waiting around the corner…

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