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 credit card offers would be rare in 2023, and this has proven to be correct. In the previous two years, there were more lucrative welcome offers compared to this year. Many popular credit cards, such as the Chase Sapphire Preferred Card, The Platinum Card from American Express, and the Citi Premier Card, featured lower welcome offers in 2023 compared to the previous year. However, Chase’s cards have been an exception, with the Chase Freedom Unlimited launching a special double cash back offer in October.

We also predicted a shift from premium cards to those with financial benefits, and this has been correct. With economic uncertainty and high interest rates, consumers have been moving away from premium cards and opting for cards that offer cash back, attractive balance transfer rates, and low or zero interest on purchases.

Another correct prediction was that credit card debt would increase in 2023, and this has been proven true. Total debt on credit cards reached $1 trillion for the first time in the second quarter of 2023, reaching an all-time high of $1.08 trillion in Q3. As a result, consumers have been focusing on paying down debt and shifting to credit cards that offer immediate cash-back and interest-saving benefits.

We predicted an increase in the usage of “buy now, pay later” services, and while there hasn’t been a significant increase in the number of offerings, 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 receiving crypto rewards, despite the stability or increase in value of top cryptocurrencies. This prediction has been correct, as consumers prefer cash rewards over crypto rewards.

We predicted that 2% cash back would become the standard going forward, and this has been partially correct. The best cash-back credit cards now offer 2% back on all purchases, making it difficult for credit card issuers to attract new customers with cards offering less than 2% back. This explains why Chase is currently offering a double cash-back offer on one of its popular cash-back cards.

Our prediction that annual fees would continue to climb has also been correct. In the second half of the year, we saw annual fees increase on popular travel rewards cards, particularly from American Express.

We predicted that brand partnerships between credit card issuers and brands would expand in 2023, and while there weren’t many new product launches, there were some new cards introduced in the market. Additionally, we learned about a new product coming from Wells Fargo in 2024.

Another correct prediction was that there would be fewer business-related travel perks, as business travel continues to lag behind leisure travel. Issuers have shifted business credit card perks away from travel towards spending.

We predicted more complimentary subscriptions and challenging-to-use credits, and this has been proven correct. Issuers have introduced more merchant-specific statement credits with stricter restrictions, making it more challenging for cardholders to utilize them.

Lastly, we predicted that customers would look for travel protections after previous travel disruptions, and while there have been fewer disruptions in 2023, consumers are still looking for travel protections either through travel insurance or credit cards that offer them for free.

In conclusion, many of our predictions about credit card rewards in 2023 have been accurate. Best-ever offers have been rare, there has been a shift towards cards with financial benefits, credit card debt has increased, and there have been more merchant-specific statement credits. However, there have also been some deviations from our predictions, such as the limited increase in “buy now, pay later” offerings and the continued popularity of 2% cash back cards. Overall, the credit card industry has seen a mix of innovative developments and persistent challenges in 2023.

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