Latest Look at Credit Card Landscape Reveals Better Offers, Looming Danger
While the attention of most, including an entire presidential election campaign, is fixed firmly on the economy at large, it’s possible that a more microeconomic view can better shed light on the experience of the everyday consumer. Card Hub recently took such a look at the credit card landscape and was able to not only take the pulse of where rates and fees are headed, but also gain a better understanding of people’s priorities as we emerge from the Great Recession.
There are a number of key takeaways from Card Hub’s Q2 2012 Credit Card Landscape Report, but four trends in particular merit further discussion: 1) The changing face of international travel; 2) The two-way credit tango banks and consumers are engaged in; 3) Consumers prioritizing “now”; and 4) The lack of competition in the bottom of the credit spectrum.
The Changing Face of International Travel
The depressed state of the economy, especially in Europe, has made international travel more attainable for the average person. According to the US Department of Commerce’s Office of Travel & Tourism Industries, nearly 10% more US citizens traveled abroad from January through April this year, the only months for which statistics are yet available, than during the same period in 2011.
The uptick in international travel, coupled with increased transparency in the credit card industry, has brought increased exposure to annoying foreign transaction fees – upwards of 90% of all credit cards have traditionally charged a 2-4% premium for transactions processed outside of the United States. This in turn has increased the pressure on banks to reduce them, and they’ve responded by decreasing foreign transaction fees by 6.72 percent in the last quarter alone and 9.02 percent in the last year. Discover also became the second major issuer to eliminate foreign transaction fees altogether on all of its credit cards – Capital One has long held this policy.
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