2020 credit card predictions: How did we do?
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At the beginning of 2020, the credit cards team sat down to predict where the credit cards industry was headed for the new year and beyond. Of course, none of us could have ever predicted that the coronavirus pandemic would turn this year on its head — and the travel and cards industries with it. But looking back at our list from this time a year ago, there were a few things we did get right.
Let’s walk through each of our 2020 predictions to see what we got right — and where we missed the mark.
Annual fees will continue to rise: Partially correct
After American Express consistently hiked up annual fees across many of its credit cards in 2018 and 2019, we figured that 2020 would continue that trend for other issuers. And we were partially right about that.
Back in January 2020 (which feels like so much longer ago than just 11 months), Chase announced a host of new changes for its luxury travel card offering, the Chase Sapphire Reserve. This included new benefits through the issuer’s partnerships with Lyft and DoorDash, but it also meant a higher annual fee of $550.
And while we had confirmation in late 2019 about these changes, January 2020 was also the official date that Amex’s Delta Air Lines lineup of credit cards was overhauled to include new benefits — and in some cases higher annual fees.
Had 2020 continued on the path it was on in January, I imagine we would have seen a couple of other cards increase annual fees, too. But because of the coronavirus pandemic, many issuers shifted focus toward helping existing cardholders get maximum value out of cards they otherwise wouldn’t use much this year. In many cases, this actually meant reducing annual fees temporarily or adding extra non-travel statement credits to help offset the price of holding on to these cards.
Card refreshes will continue to outpace new product launches: Correct
While we did see a few new product launches in 2020 (hey there, Chase Freedom Flex, United Club Infinite Card and Venmo Credit Card), a larger focus was on card refreshes — with both temporary and long-term changes.
Of course, we started the year with plenty of Amex cards getting a change in travel protections, the Delta credit card refreshes and the major Chase Sapphire Reserve update. But we also saw changes to the Citi Premier® Card, Chase Freedom Unlimited and, most recently, the American Express® Gold Card.
Banks will make it harder to earn welcome bonuses: Incorrect
And this may have come to fruition had the coronavirus pandemic not caused such a shift in the industry for the majority of the year. The pandemic caused an economic downturn, which, in turn, had issuers switching away from trying to get new customers and toward keeping existing customers.
Cards as a whole were harder to get approved for this year — but because of changes in underwriting policies, not because of new sign-up bonus restrictions.
Sign-up bonuses will require higher amounts of spending over longer periods of time: Correct
This year, we did see more credit cards start to offer higher sign-up bonuses in exchange for higher spending thresholds required over longer periods of time.
Here are a few notable examples:
- Southwest Rapid Rewards Performance Business Credit Card, which is currently offering up to 100,000 points — 70,000 points after spending $5,000 in your first three months and 30,000 additional points after spending $25,000 in the first six months.
- Capital One Venture Rewards Credit Card, which offered up to 100,000 miles after spending $20,000 in the first 12 months. This card currently offers 60,000 bonus miles after spending $3,000 on purchases in the first three months of account opening.
- United Explorer Card, which is currently offering 40,000 bonus miles after you spend $2,000 on purchases in the first 3 months your account is open. Plus, an additional 25,000 bonus miles after you spend $10,000 in the first 6 months.
We also saw cards try out a new model for sign-up bonuses that included offering temporary elevated bonus categories over a set period of time. The Chase Freedom Flex and Chase Freedom Unlimited, for example, both previously offered this kind of sign-up bonus. Aside from the $200 cash-back bonus you get after spending $500 in the first three months, the cards previously offered new cardholders 5% back on groceries in the first year (up to $12,000 in spending) (The grocery offer is no longer available).
It’s not exactly the same as requiring a higher spend over the course of a longer period for the bonus, but it does show that card issuers are looking for ways to encourage long-term spending on cards rather than short-term spending that may wane after hitting a three-month sign-up bonus.
Card issuers will look to offer more unique perks: Correct
If there is one positive that came out of 2020 for the cards industry, it was the introduction of so many unique perks and benefits — even if many of them were temporary. Though we certainly didn’t realize that this prediction would come true because travel was put on hold for most of the year, it still ended up being accurate.
Throughout the summer, card issuers were adding unique perks left and right — streaming service credits on Amex Platinum, new bonus categories for the Chase Sapphire cards and expanded redemption options for Chase and Capital One cards.
We also got to see a couple of new long-term benefits be introduced, including a new hotel benefit on the Citi Premier and the recent announcement that an Uber credit will be added to the Amex Gold in 2021.
Though many of these predictions did come true, they certainly didn’t come true in the manner we expected. The past year has been filled with ups and downs, and the credit card industry has shifted constantly to keep up with changing needs.
Here’s hoping our 2021 predictions will be just as accurate (but perhaps without the backdrop of a global pandemic).
Featured photo by The Points Guy
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