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While 2024 gave many credit cardholders the opportunity to earn incredible rewards or cash in for big travel plans, they also faced rising debt balances and an ever-changing interest rate environment.
As we approach 2025, there’s still uncertainty about what the future holds — new policies could affect the current state of card fees and rewards programs, interest rates will continue to change, and the value of benefits is constantly evolving.
Here are a few trends and predictions we’re looking for in the year ahead.
Since the Federal Reserve began lowering its target federal funds rate range earlier this year, we’ve already seen some credit card interest rates go down. Of course, rates haven’t lowered enough to ease the burden for cardholders with high-interest credit card debt.
In the new year, experts expect the Fed to cut rates further — but we’ll have to wait and see just how quickly they’ll do so and how low rates will go.
At the 2024 Yahoo Finance Invest conference in November, Federal Reserve Bank of Minneapolis president Neel Kashkari said the Fed will “have to wait and see what the data says” to determine its interest rate decisions in 2025. Recently, some expert predictions say the frequency of rate cuts may slow in 2025.
If the Fed does cut rates more, you will likely see interest rates on credit cards to continue falling too. But that doesn’t mean you’ll see a significant difference in your APR. Average credit card interest rates are still upwards of 21%. Even if the Fed’s target rate range falls by a full percentage point or more, you shouldn’t wait to get started on paying down your balances — that won’t make a significant difference in your APR, and waiting can leave you with even higher mounting debts.
Even as interest rates fall, credit card debt balances and delinquencies are growing. The most recent report from the New York Federal Reserve on Household Debt and Credit shows that Americans have an outstanding $1.17 trillion in outstanding credit card balances, 8.1% higher than a year ago. While credit card delinquencies have improved slightly, 8.8% of American card balances still became delinquent (or were more than 30 days late) in the third quarter of 2024.
“Looking ahead to 2025, this upward trend in credit card balances may continue,” Barry Coleman, vice president of program management and education for the National Foundation for Credit Counseling, said in an email to Yahoo Finance.
The 2025 Consumer Credit Forecast from TransUnion also points to balances and delinquencies increasing but at a slower pace.
The credit bureau projects credit card balances will increase by 4.4% year over year by the end of 2025 (down from 18.5% in 2022 and 12.6% in 2023). Delinquencies, too, are projected to increase much more slowly in 2024 and 2025 than they did in 2022 or 2023.
The exact trajectory of credit card debt levels will depend on evolving economic conditions, Coleman says, like interest rate changes and consumer spending habits. “However, moderating inflation could reduce the reliance on credit cards for covering everyday household expenses. Additionally, with credit card issuers not showing significant signs of tightening lending standards, credit usage may remain high.?”
A few travel programs have already announced changes that will affect cardholders starting in 2025.
First is cardholder access to Delta SkyClubs. As of Feb. 1, 2025, the following limits will apply for certain American Express cardholders:
Delta SkyMiles® Reserve American Express Card and Delta SkyMiles® Reserve Business American Express Card: 15 days of Delta SkyClub access per Medallion year (earn unlimited access after spending $75,000 on your card per calendar year). This is an increase from the previous 10 allowed visits.
The Platinum Card® from American Express and The Business Platinum Card® from American Express: 10 days of Delta SkyClub access per Medallion year (earn unlimited access after spending $75,000 on your card per calendar year). This is an increase from the previous six allowed visits.
Alaska Airlines is changing its loyalty program too. The airline’s rebooted rewards program is getting several updates, from new milestone rewards as you work toward elite status to the ability to earn elite-qualifying miles on award flights with Alaska and its partners.
Plus, cardholders get an extra boost. In addition to the miles you’ll earn on spending with the Alaska Airlines Visa® credit card, you’ll also earn one elite-qualifying mile for every $3 in purchases (up to 30,000 EQMs per calendar year) starting on Jan. 1, 2025.
If you’re a Capital One cardholder, you may face limited access to Capital One Lounges in 2025. Starting Jan. 1, you’ll no longer have complimentary access to Capital One Lounges using a Capital One Venture Rewards Credit Card or Capital One Spark Miles for Business card. However, you can still pay $45 to access Capital One Lounges instead of the standard $90 rate.
Cardholders are still at risk of having their identities stolen and new accounts created in their names — and that risk isn’t going anywhere in 2025. If you fall victim to account fraud, it could not only cost you money but also put your credit score at risk. Data breaches, too, can still make you vulnerable to identity theft. When your username and password for a site is breached, fraudsters can use your information to create new accounts in your name.
“Those risks are real, and they're going to continue into 2025 and beyond,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center.
And the risk isn’t just online. Even as mobile wallets and contactless payments have made point-of-sale transactions much safer, you should always stay aware of your surroundings and protect access to your card info.
“We're also starting to hear more about what I call kind of traditional tactics, or old-school tactics making a comeback,” Velasquez said. “It's things like the theft of physical cards, either through getting them out of your wallet or even out of the mail, just stealing mail, that still happens.”
Even as cardholders may get a slight break from high interest rates, they’ll still have fees to deal with in the new year.
Interchange fees are a hot topic among banks and merchants who take payment via credit cards. These “swipe fees” are paid by merchants to credit card networks to process each card transaction.
Credit card networks — the largest in the U.S. are Visa and Mastercard, though American Express and Discover are major networks, too — tend to update these fees regularly. While fees charged by card networks may not always directly impact you as a cardholder, they can end up costing you if merchants raise purchase prices as a result. On the flip side, these fees may be used by issuers to offset the cost of rewards and benefits.
The Credit Card Competition Act, first introduced in Congress in 2022, could impact swipe fees in the future. It would require credit card issuers to allow transactions over at least two networks (and only one of those can be Visa or Mastercard). There’s been little movement on the bill this year, and it hasn’t been brought to vote — though it was the subject of a recent November 2024 Senate Judiciary Committee hearing.
We wouldn’t be surprised to see higher annual fees in the year ahead too. There’s no guarantee that annual fee hikes are in store, but as the costs of providing rewards and benefits increase for issuers and their partners, so could your annual fee.
We already saw increasing annual fees in 2024. One of the most notable, for example, was the American Express® Gold Card’s fee, which rose from $250 to $325 (see rates & fees) — while also adding several new benefits to help savvy cardholders offset the cost.
Look out for more premium credit cards, too, especially among co-branded travel cards. Alaska Airlines, for example, has teased a new premium credit card option that’s expected to roll out next summer.
And as recently as November, Delta Air Lines President Glen Hauenstein hinted toward potential future premium card options within the airline’s partnership with Amex: “...okay, we've got the Reserve card out there, but is there even a better card? So we'll put our thinking caps on that. Never stay satisfied.”
In 2024, there were some big shakeups from major banks and travel companies, like Capital One’s proposed acquisition of Discover and the merger between Alaska Airlines and Hawaiian Airlines. We haven’t yet seen the direct impact from those deals, but they could become more clear for cardholders in the new year.
For example, adding Capital One cardholders to Discover’s payment network could make a huge difference in the size of the network over the other major U.S. competitors (Visa, Mastercard, and American Express). However, the deal between the two banks is still moving through the regulatory process and hasn’t yet been finalized.
So far, Capital One says it will continue to offer Discover credit cards. After the acquisition, though, there’s always the chance for new card offerings as well as different features and benefits on existing cards.
Alaska Airlines and Hawaiian Airlines aren’t credit card companies, but each has loyalty programs and co-branded credit cards for customers. The loyalty programs will merge eventually, though the airlines say more details will be announced in mid-2025. Cardholder benefits (free checked bags, companion fares, etc.) apply only to the airline you opened the card with. In the meantime, you can transfer miles at a 1:1 ratio between the programs and get an instant status match (or a potentially higher status when you combine elite-qualifying miles you’ve earned between programs).
And there’s always the potential for more corporate movements to come. Reports earlier this year pointed to JP Morgan Chase in talks with Apple about taking over its credit card from Goldman Sachs, for example.
