Most consumers look for a minimum of four different features when deciding on a credit card, but some consider as many as six, according to a new study. Among the consumers living paycheck to paycheck, 82% say the safety measures taken are “very” or “extremely” important when determining preferences between different credit cards, and 74% say the same of rewards programs. Other top factors are customer service quality, cited by 64% of the consumers living paycheck to paycheck, and interest rates or fee applied, cited by 62%. Among the active users who are parents, 75% cite credit-building tools as a key factor when deciding between cards.
The Federal Reserve is paving the way for possible interest rate hikes next year, in an effort to contain stubbornly high inflation. At the conclusion of a two-day policy meeting Wednesday, the central bank announced plans to phase out its large-scale bond-buying program faster than initially planned. Ending the bond purchases earlier would give the Fed more flexibility to raise interest rates sooner, if necessary, to keep prices from spiraling out of control. The Fed is taking a harder line against inflation after consumer prices in November jumped 6.8% from a year ago, the largest increase in nearly four decades.
A threat to the Visa-Mastercard duopoly is that new fintech players bypass the networks altogether. So-called digital wallets allow consumers to pay merchants directly through bank transfers. These wallets accounted for 28% of e-commerce on average across North America and Europe, according to Worldpay. But consumers often load cards into their digital wallets rather than using direct bank transfers, meaning Visa and Mastercard still process the purchases. Meanwhile, fast-growing buy-now-pay-later upstarts give shoppers the option of breaking up their purchases into monthly instalments. That threatens credit cards, the traditional mainstay of Visa and Mastercard’s business. None of those risks are as terrifying as they seem.