In December 2019, I wrote a post featuring my predictions for the year 2020 in credit cards, issuers, and trends. The year 2020 is almost over and the time has come to look back to see how accurate my credit card predictions were.
Furthermore, 2020 was a terrible year overall for the travel industry. It was also one of great change for the credit card industry. The COVID-19 pandemic threw the world for a loop as nobody could have predicted what has become the great pandemic of the 21st Century.
Premium Cards Will Become Less Valuable
My first prediction was that premium credit cards would continue to lose their value as they did in 2019. This prediction was correct, but not in the way that I thought. In 2020, premium credit cards became less valuable because travel slowed down so considerably. I predicted that issuers such as American Express, Chase, and Citi would continue to devalue or eliminate perks from premium cards. But this part of my prediction was incorrect.
In fact, all three issuers added a plethora of limited-time benefits to their premium and select mid-tier cards. The purpose of this was to keep cardholders happy and earn annual fees during the pandemic. For example, both Chase Sapphire cards added Peloton credits and the Pay Yourself Back feature. The latter benefit expanded the 25% (Preferred) or 50% (Reserve) multiplier on Ultimate Rewards (UR) Points for grocery and gas redemptions.
American Express also added $320 in streaming and cell phone credits to the Platinum Card from May to December 2020. These credits helped Platinum cardholders justify more than half of their card’s $550 annual fee.
Meanwhile, Citi has expanded its $250 General Travel Credit from the Prestige Card. The credit can now cover travel, dining, or grocery expenses. It can also help cardholders justify roughly half of the Prestige Card’s $495 annual fee.
American Express Will Continue to Close Accounts and Claw Back Rewards
American Express’ Rewards Abuse Team (RAT) has been on a war path since 2019. Unfortunately, there are no signs of stopping at the end of 2020. In other words, this prediction has come true.
Furthermore, Amex has continued to claw back offers, sign-up bonuses, Membership Rewards (MR) points, and credits for those who they believe have been “gaming the system”. The limited-time COVID-19 perks from all eligible cards are also included.
Earlier this month, Doctor of Credit (H/T) and a plethora of other sources reported that Amex account shutdowns were occurring in masses. This wasn’t just clawbacks, but total account shutdowns.
Chase Will Release A Premium Business Card
Unfortunately, Chase did not release a premium business credit card in 2020. This prediction did not come true in the wake of the COVID-19 pandemic and the resulting economic downturn. Instead, Chase’s underwriting standards for business credit cards became more strict.
Mid-Tier Cards Will Become More Competitive
Last year, I predicted that 2020 would bring more revamps, new cards, and overall competition to the mid-tier card market. But issuers were hesitant to make any major changes after the pandemic hit. Nonetheless, mid-tier credit cards became slightly more competitive as American Express, Citi, and Chase offered new permanent and limited-time perks.
For example, American Express added the Uber Cash credits and will eliminate the airline incidental credits on the personal Gold Card. The Gold Card did not receive any limited-time COVID-19 perks because it’s earning structure and perks are centered on food instead of travel. But Amex made their middle charge card more valuable for some cardholders by adding the Uber Cash credits starting in January 2021.
Amex also added $80 in cell phone credits from May to December 2020 on the Green Card. I hope these credits become permanent in January 2021.
Chase also improved the Sapphire Preferred (and Reserve) by adding a groceries category multiple times. Groceries became a huge focus in the credit card industry (and not just American Express) in 2020. In fact, Chase is currently offering 2x UR points on Groceries for the Sapphire Preferred Card.
Capital One Will Improve Their Transferrable Points Program
Capital One improving their transferrable points program was something that I wanted to happen in 2020. Unfortunately, they did not improve much of anything, making this prediction incorrect.
Capital One Miles are currently the least valuable transferrable points currency. However, Capital One can see this as an opportunity to improve their program. I predict that they will take a step in the right direction and make their miles more valuable.
Barclays Will Not Bring Back the Arrival + Card
Furthermore, I predicted that Barclays will not bring back the Arrival + Card. I correctly predicted this outcome, but not for the reasons I was thinking. The pandemic and the economic downturn that came with it prompted Barclays not to try again with the Arrival + Card.
Last year, my reasoning for this prediction was that the credit card market had changed. Fewer people wanted “travel cash back” credit cards. This is still true, but only because the pandemic slowed travel to a halt in 2020. More people want regular cash back credit cards or other rewards credit cards whose rewards can easily be liquidated.
With fewer than two weeks left in 2020, I figured that now was a good time to look back at my predictions for the credit card landscape. This post conveyed the results of my credit card predictions for the year 2020. I am pleased to report that I went 4-2 in my predictions. In other words, I had four correct predictions and two incorrect ones.
I incorrectly predicted that Chase will release a new premium business credit card and that Capital One would improve their transferrable points program. However, I correctly predicted more competition among mid-tier credit cards, an active Amex RAT, premium cards would lose value, and that the Barclays Arrival + would not return again.