What credit cardholders should know for 2025: Predictions, interest rates, changing benefits, and more

Core Insights - The credit card industry is facing challenges with rising debt balances and fluctuating interest rates as it approaches 2025, with potential changes in policies affecting fees and rewards programs [1][3][4] Interest Rates - Interest rates on credit cards have begun to decrease as the Federal Reserve lowers its target federal funds rate, but the average credit card interest rate remains above 21% [3][5] - Experts predict further rate cuts in 2025, but the extent and speed of these cuts remain uncertain [4][5] Credit Card Balances and Delinquencies - Outstanding credit card balances in the U.S. have reached $1.17 trillion, an increase of 8.1% year-over-year, while delinquencies remain a concern with 8.8% of balances being delinquent in Q3 2024 [6][7] - Projections indicate that credit card balances will grow by 4.4% year-over-year by the end of 2025, a significant decrease from previous years [8] Economic Conditions - The trajectory of credit card debt levels will be influenced by economic factors such as interest rate changes and consumer spending habits, with moderating inflation potentially reducing reliance on credit cards [9] Changes in Rewards Programs - Significant changes to travel rewards programs are anticipated in 2025, including access limitations to Delta SkyClubs for certain American Express cardholders and updates to Alaska Airlines' loyalty program [10][11][12][13] Fraud Risks - Cardholders continue to face risks of identity theft and account fraud, which are expected to persist into 2025 [14][15][16] Fees and Charges - Interchange fees, which are paid by merchants to credit card networks, are a topic of discussion, with potential impacts from the Credit Card Competition Act [17][19] - Annual fees for credit cards may increase as issuers face rising costs associated with providing rewards and benefits [21][22] Corporate Movements - Major acquisitions and mergers in the banking and travel sectors, such as Capital One's proposed acquisition of Discover and the merger between Alaska Airlines and Hawaiian Airlines, could impact cardholders in 2025 [23][24][26]