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Will 2013 Be the Year of the Consumer? NerdWallet’s Finance Predictions

Dec. 10, 2012
Credit Cards
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Get ready for 2013: if it’s anything like we predict, we’ll see some substantive shifts in banking and personal finance in the consumer’s favor. From the (much-needed) expansion of mobile payments, to the mainstreaming of prepaid debit cards, to increased credit union membership, everyday customers will see expanded and more consumer-friendly products in the new year. Read on for an in-depth look at our predictions for an improved 2013.

1. Prepaid broadens appeal beyond the unbanked

The prepaid debit card marketplace has changed dramatically since we launched our prepaid comparison tool at the beginning of the year. In January, it was natural to see the average consumer’s cost well over $300 a year, but in the months that followed, we’ve seen a number of low-fee, easy-to-use, game-changing offers. As the American Express Bluebird demonstrated, prepaid debit has become mainstream, incorporating novel features such as mobile deposits and basic ones such as free cash deposits and withdrawals.

But it’s not just that those who usually buy prepaid now have better options. Typical checking account customers, wary of overdrafts and maintenance fees, can now view prepaid debit cards as a perfectly viable alternative. The Chase Liquid, for example, is less than half the cost of a basic Chase checking account for someone who can’t meet the minimum balance requirements. Such FDIC-insured cards, which are virtually fee-free but for a low monthly cost, offer a middle ground for those who still have savings accounts or credit cards, but no longer see value in checking.

The shift to prepaid benefits banks as well. Checking accounts are expensive – around $300 a year – and a tight lending and regulatory climate have made them less profitable than ever. Shedding customers who can’t make the minimum balance isn’t necessarily skin off the banks’ noses. If they can do so while maintaining a relationship with the customer, who may well take out a mortgage or credit card loan in the future, so much the better.

2. Credit card bonuses keep rolling in

2012 was a great year for signup bonuses; 2013 will be no different. Banks will continue to court high-spending prime customers for the interchange fees, but as the memories of the 2008 crisis fade, they’ll begin to loosen their purse strings once more. This means that everyday consumers can look to exciting $300+ signup bonuses in the mail.

There are also a few once-a-year bonuses likely to resurface in 2013. Look for seasonal favorites such as:

March: Capital One Venture Rewards’ 100,000 mile-match program – they’ll match the miles earned on another travel card last year, up to 100k miles. However, they only give out 1 billion miles a year.

  • 2011: Match My Miles program, March 10th – May 13th, but ended on April 5th
  • 2012: Double Miles Challenge, March 7th – May 1st, but ended on March 30th

Summertime: Starwood Preferred Guest’s 30,000-Starpoint promo (NerdWallet values this at $690)

  • 2011: late July – late August
  • 2012: early August – early September

Sporadically, and going on now: Chase British Airways Visa’s 100,000 Avios promo – you can redeem Avios for American Airlines miles, making them a lot more useful.

In case you’re itching for a signup bonus before then, consider the $500 signup bonuses going on now:

3. Banks will continue to raise fees – quietly, region by region.

After another year of bank fee increases, consumers can expect more of the same in 2013.  Bank of America has already announced that fee increases will be pushed to late 2013.  Consumers, be aware though: by 2012, big banks already turned to less noticeable fee increases (raising overdraft fees and other ancillary fees instead) and inconveniencing customers by enacting cost-cutting measures.  At the end of the day, with big-bank CEOs openly stating that customers with balances under $100,000 are “no longer profitable,” consumers can expect to see banks putting their money where there mouth is.

4. More customers leave their big-banks and move to local credit unions and community banks.  

In 2012, almost half of federally insured credit unions grew from the previous year – we expect more of the same for 2013.  This prediction also results from a comprehensive analysis of the fee structures of banks and credit unions – if you want banking with lower fees and fewer gotchas, in almost every major banking category, credit unions are better than big-banks.  Separately, with banks in the news all the time for unacceptably bad behavior, from money laundering to discriminating against minorities, consumers really do have to question the integrity of their financial institutions.

5. Mobile banking (finally) catches up to the 21st century.  

Is it just us, or does it feel like the banking industry was slow to adopt technology? Only at the end of 2012 did all four big banks finally have mobile deposit capabilities.  We’re happy to report that mobile banking significantly in 2012 – a trend we expect to continue, allowing customers to check balances, view history, locate ATMs, and mobile check deposit.  After all, it’s a win-win situations: most customers don’t want to deal directly with their bank for rote and simple tasks, while banks can save money servicing these requests via mobile banking, which is far cheaper to maintain than physical branches and tellers.   We’re just holding out hope that banks give an option to send money to an individual (person-to-person payments)!

6. Investors will continue to be overcharged by their online brokers.

A recent NerdWallet study found that at least 17 million investors overpay their online brokers in unnecessary fees to the tune of $1.8 billion total every year.  Unfortunately these numbers aren’t expected to change dramatically next year, but individual investors should take charge: be sure to shop around to find the best brokerage account before opening a new one up.