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Credit Card Growth Accelerates in 2014

[Wednesday, December 10th, 2014]

Although credit card issuers have seen a decline in accounts on file and outstanding balances over the past few years, that trend seems to be turning around in 2014. According to the Mercator Advisory Group’s latest research, this year has been a strong year for credit card issuers. Regular unsecured credit cards, student credit cards, charge cards, and secured cards are all performing well.

Michael Misasi, a senior analyst at Mercator, said that credit card issuers have every reason to have a bright outlook as they head into 2015. “Not only have industry performance metrics shown signs of acceleration, but a few concerning strategic issues have also abated in 2014.”

The Mercator research contains good news for issuers such as American Express, Bank of America, Capital One, Citibank, Discover, Fifth Third, JPMorgan Chase, MasterCard, PNC, US Bank, Visa, and Wells Fargo.

Popular credit cards types across the nation

With the economy looking up and both availability and use of credit looking strong, all types of credit cards are enjoying the benefits. Some of the most popular types of credit cards include:

  • Student credit cards: These are good for young people who haven’t accrued much credit history yet and may not be eligible for other kinds of cards. People who are new to the country, new to credit cards, or rebuilding their credit can also benefit from student credit cards. These cards usually have lower limits, but often come with no annual fee and reasonable interest rates.
  • Rewards credit cards: Cards that offer cash back, reward points, frequent flyer miles, and hotel rewards are perennial favorites. The best cards are reserved for folks with good credit, but even people with average credit can find cards that give 1% cash back or even 5% cash back in rotating categories.
  • Charge cards: Unlike regular credit cards, charge cards must be paid in full each statement period. Cardholders cannot carry debt over from one billing period to the next, and consequently, they will not accrue interest on their purchases.
  • Secured cards: Secured credit cards are designed for people who are rebuilding their credit scores. People put down a lump sum as collateral and are given a credit limit equal to that amount. This way, credit issuers are protected in case of consumer default. These types of cards are typically a stepping-stone to better credit, until credit has improved to the extent that users can be approved for more traditional unsecured credit cards.

The Mercator report can be accessed through their website and gives a full recap and forecast of the 2014 credit card scene.

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