With 2017 on the horizon, many consumers and business owners alike are carefully evaluating their financials, including the use of credit cards and small business loans. It appears that many have prospered over the last 12 months and will continue to do so in the New Year. Now that the presidential election is over, Americans are eagerly anticipating what’s to come in the financial markets, including credit cards.
Read on for some of our credit card predictions for 2017 and start planning now for a financially responsible year.
CREDIT CARD BALANCES WILL CONTINUE TO RISE
According to https://wallethub.com/edu/credit-card-debt-study/24400/ WalletHub, credit card spending reached record highs of $21.9 billion in credit card debt in Q3 of 2016, with an annual cumulative balance of $80 billion — the highest since 2007. Experts predict that by 2017, outstanding balances will reach $1 Trillion. This is due in part to the increasing number of subprime credit cards flooding the market with above average interest rates, combined with a large amount of consumer spending during the 2016 holiday season.
CREDIT CARD COMPANIES WILL BEEF UP SECURITY MEASURES
In the wake of Russian hackers allegedly influencing the US elections, and an increased number of consumer credit card data stolen, 2017 will continue to see a boost in measures to keep credit cards safe. EMV (Europay, MasterCard and Visa) chip cards will keep rolling out and replacing regular stripe cards, according to Creditcards.com. This, along with more authentication measures at point of sale counters and e-commerce sites will help to maintain the safety of more credit cards than ever before.
MERCHANT CREDIT CARD PROGRAMS WILL IMPROVE
The use of credit and debit cards has created a strong need for better and more affordable merchant credit card processing solutions. While there used to be just a handful of companies to choose from, small businesses are demanding better rates and more flexible programs to meet their needs. For example, many more companies have both an online and offline presence, and this can include mobile payment processing. In 2017, look for more merchant credit card programs at rock bottom rates.
THE FEDS MAY INCREASE RATES BY A FEW POINTS
MarketWatch reported early in December that the Federal Reserve would be announcing interest rate hikes, to stimulate an uncertain stock market. In 2017, this should hold steady at just a couple of points above the norm. As a small business owner, however, now may be the best time to lock in a lower interest rate for your small business loans and credit cards.
MERCHANT LOANS AND FACTORING LOANS WILL INCREASE IN USE
One of the biggest problems facing small businesses is poor cash flow, and this is where merchant loans and factoring loans, and credit card programs can help. According to a study conducted by U.S. Bank, 82% of small businesses fail due to cash flow issues. Most are stemming from poor collections and customer management practices, but others due to unexpected emergencies. Merchant and factoring loan programs as well as credit cards can provide a way to manage cash flow to avoid the ups and downs of running a business.
CREDIT CARD COMPANIES WILL TAKE THEIR FOCUS OFF MILLENNIALS
While much of the focus of credit card companies has been on attracting Millennials, the largest group of consumers to enter the market since the Baby Boomers, credit card companies are now putting their sites on Generation Z. This is the youngest generation that is starting their careers post-graduation, and many are choosing to become entrepreneurs rather than taking 9-to-5 jobs. In 2017, credit card companies will be targeting this generation hard with attractive low interest rates and fun rewards programs.
IT WILL BE EASIER TO GET SMALL BUSINESS LOANS THAN BUSINESS CREDIT CARDS
In the last few months, credit card companies have cracked down on the number of credit card programs for those with negative or limited credit ratings. This means small business owners will find it easier to apply for and get approved for bad credit small business loans than credit cards. We predict an upsurge in the availability of small business loans that are geared for bad credit or no credit business owners in the New Year. Most of these programs will be able to help small business owners who are either trying to establish or rebuild credit.
MORE MERCHANTS WILL OFFER BRANDED CREDIT CARD PROGRAMS AND REWARDS SYSTEMS
In order to spur business, in 2017 more merchants, even smaller companies, will be offering their own branded credit card programs that tie directly to rewards programs. This is meant to appeal to all consumers, but will help to create a more loyal customer base. Rewards programs will actively market to women and younger people, who typically make up the largest share of the consumer market. All of this will help to increase the use of store cards vs. main branded credit cards.
SWIPE AND MOBILE CREDIT CARDS WILL REPLACE PLASTIC
For those who still like the feel of a plastic credit card this prediction may come as unwelcome news. In 2017, expect to see more use of mobile credit cards that simply display the account on a cell phone screen. Also, consider the increased use of wearable technology that allows users to put their credit card data on a smart watch and simply swipe their wrist at the counter to pay. All of this may seem like a nightmare for credit card fraud protection teams, but it’s supposed to be safer than losing a card in a store.
United Capital Source is dedicated to helping you make 2017 a profitable and secure year. We have financial programs to meet every type of business, including small business loans and support with credit card processing loans. Just visit our site and contact us today to learn more.