A look back at 2014 … and a look ahead at 2015

“60 Minutes” may have dubbed 2014 “the year of the data breach.” But so much more happened than that. Here’s a run-down of 2014’s biggest credit card news – and what we think you can expect in 2015.

Table of contents

2014 year in review

Data breaches
Unfortunately, the “60 Minutes” assessment isn’t far off. Several major retailers succumbed to data breaches in 2014, including Michaels, The Home Depot and Staples. These, combined with the enormous Target data breach of late-2013, cost issuers a couple hundred million dollars, spooked consumers and fueled interest in more-secure EMV card technology.

Go here for a list of the year’s breached retailers.

New cards enter the market
Issuers presented several new rewards card options for consumers this year. While some tried out new schemes (such as rewarding consumers for making more purchases), others doubled down on simplicity.

  • The Everyday card and the Everyday Preferred card from American Express (a CreditCardForum advertising partner): This duo rocked the boat by tying bonus points to the number of purchases made per month. The Everyday card is also notable for allowing cardholders to earn Membership Rewards points with no annual fee. (Read more)

  • Wells Fargo Propel: Wells Fargo beefed up its rewards card portfolio with the Propel 365 (a rewards card for everyday expenses like gas stations and restaurants) and the Propel World card (a card for travelers). (Read more)
  • Citi Double Cash: This card is also trying something new. While other cards give you rewards on spending, this one gives you 1 percent back on purchases and another 1 percent back when you pay them off. (Read more)
  • Discover it Chrome: Another card that’s gunning for the keep-it-simple market, the Discover it Chrome (which also has a student version) is a pared-down version of the regular Discover it card. Instead of rotating bonus categories, the Chrome offers a steady 2 percent back on gas and restaurants. (Read more)
  • Expedia+ Voyager card and Expedia+ card: With these cards, you can earn points in Expedia’s reward system and get complimentary Expedia status. (Read more)
  • Diners Club Premier and Elite cards: Unlike the charge cards Diner’s club is known for, these let you revolve a balance. Notable benefits include lounge access and the ability to transfer your rewards to more than 20 travel loyalty programs. (Read more)

We bid some benefits farewell
There’s always the risk that the benefits that convinced you to apply for a card will disappear – and card issuers are allowed to yank them at any time. Here are a few benefits we said goodbye to in 2014:

  • Chase Sapphire Preferred 7 percent dividend: You used to get a 7 percent bonus on all the points earned in a year. While existing cardholders are grandfathered in on points earned through 2015, new cardholders won’t get this benefit. Luckily, the Chase Sapphire Preferred also upgraded its rental car coverage to primary coverage (instead of secondary) and increased its trip cancellation insurance limits. (Read more)

  • American Express Premier Rewards Gold annual spending bonus: No longer can you earn 15,000 Membership Rewards points by spending $30,000 each calendar year.
  • Chase Freedom 10 percent annual bonus: This benefit will actually stick around for 2015, although Chase announced its demise in August 2014. After Dec. 31, 2015, Freedom cardholders will no longer get a 10 percent bonus on points earned during the year for having a Chase checking account. On that same date, Chase will also be retiring the ability to earn an extra point on travel booked through Ultimate Rewards.
  • U.S. Bank Cash+ weakens dining rewards: This card used to offer 5 percent on dining (up to $2,000 per quarter), making it a good year-round complement for 5 percent cards with rotating categories. In late 2014, though, U.S. Bank reduced restaurant rewards to 2 percent.

2015: A look forward

As we bid farewell to 2014, we see two big trends ahead for 2015:

chip-pin1. Your issuer will replace your magnetic stripe card
2015 (Oct. 1, to be precise) is the year of the fraud liability shift that’s expected to convert the U.S. to EMV. Right now, issuers are financially responsible for counterfeit card-related losses. Effective Oct. 1, 2015, merchants will also have a horse in that race; if they haven’t upgraded their equipment to accept EMV cards, and a counterfeit EMV card is used, they (not the issuer) will be financially responsible for fraud losses.

For issuers, the way forward is clear: To minimize their exposure, they need to outfit all their cards with EMV chips. The EMV flood gates already opened in the second half of 2014, with former hold-outs Capital One and Discover beginning to offer EMV cards (for a complete list, view our chart). Aite Group predicts that 70 percent of credit cards and 40 percent of debit cards in the U.S. will be EMV enabled by the time 2015 draws to a close.

2. Mobile wallets and rewards will co-evolve
Mobile wallets aren’t new (although Apple finally entered the race this year with Apple Pay). But they haven’t exactly gained mass appeal yet, despite promises of speedy transactions and enhanced security.

“It’s more about psychology than it is technology,” says John Espey, founder and CEO of Reward Summit, a reward-maximizing app and browser add-on. “I care that my card information is secure, but I also know that my bank is going to assume that risk anyway. You’re not going to convince the consumer to change behavior and pay with a mobile wallet on their phone by saying it’s more secure.”

Mobile wallets that interface with rewards, Espey predicts, will give consumers a reason to embrace them. For one thing, linking all your rewards cards to a wallet is just easier for consumers.

“Having 12 cards in a digital wallet is a lot more realistic and less cumbersome than having 12 cards in your physical wallet,” Espey says.

But dig deeper, and there are even more possibilities:

  • Instead of using “blunt instruments” like rotating quarterly categories, Espey says, cards might utilize a partnership with a wallet to offer shifting bonuses that reflect the individual’s shopping habits.
  • Cards you haven’t used a while could ping you with offers of extra cash back in exchange for using them that day.
  • Wallets could even reverse the “backwards” process of a cashier offering you a store card when you’re “in the checkout line with your screaming kids and ready to just get out of there.” If your wallet could sense you’re in Target, for example, it could allow you to apply for the card as soon as you walk in the door so that the card would be waiting for you at checkout.

Of course, instantaneous credit card applications via mobile wallets aren’t yet a reality. Nor do wallets like Apple Pay work with store cards not tied to a major card network.

“But it’s only a matter of time before every payment instrument you use links to a wallet,” Espey says. “It’s not something I expect right away in Q1 or Q2, but it’s a very real opportunity.”

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