To help consumers to make smarter financial decisions in the post-recession landscape, leading personal finance websites CardHub and WalletHub recently released their Q2 2015 Credit Card and Banking Landscape Report.
Credit card offers often fluctuate in value and correspond to changes in the economic climate or issuer strategy. Market trends surrounding credit cards reveal interesting details about today’s consumers and the general financial climate, so following them can help you find the best deals and better anticipate the near future for your own business.
As for the banking world, the Federal Reserve is believed to be close to raising interest rates after nearly seven years. To figure out what this means for the small business owner and offer some guidance, WalletHub analyzed the rates, fees and features associated with more than 2,000 accounts and CDs from banks and credit unions across the country.
Careful consideration of this information can help you determine the best place for your funds. Read on for some highlights of both reports.
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Credit Card Landscape Report
Credit card rates held fairly stable recently. Notable exceptions? APRs for people with fair credit rose 3.61 percent while rates for those with excellent credit fell 1.47 percent. Cash is getting more expensive—credit card companies have increased cash advance fees by about 60 percent since the end of 2010.
Image via CardHub
The value of credit card initial rewards bonuses experienced a bit of a correction during Q2 2015 after a 40 percent rise over the past 3 years. Cash-based bonuses dropped 5.09 percent and points/miles fell 2.84 percent.
The takeaway? It’s a good time to jump on the opportunity to apply for a bonus while their value is still relatively high.
Stabilized zero percent balance transfer periods suggest that issuers are focused on attracting new customers who have existing debt. Zero percent purchase terms, however, are becoming shorter, which might mean credit card companies are moving away from people interested in accruing new debt.
Image via CardHub
Consumer complaints regarding “advertising and marketing” as well as “rewards” rose roughly 180 percent and 169 percent, respectively. Fully 64 percent of the “advertising and marketing” complaints and 71 percent of the “rewards” complaints pertain to U.S. Bank, the worst culprit in the report.
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Banking Landscape Report
The data reflects a declining interest rate environment for deposit accounts despite of all the talk about impending rate hikes. Rates for checking fell 6.03 percent during the second quarter of the year. Rates for savings accounts fell 11.52 percent during this period. Still, personal online-only savings accounts provide the market’s highest interest rates. They offered 61 percent greater returns than personal online checking accounts.
The rates provided by Certificates of Deposit (CDs) rose 3.44 percent on average during Q2. However, the average 2-year CD offers a lower yield than an average online savings account these days, so in general they aren’t worth the sacrifice of total liquidity.
Pay attention to the details: during Q2, the minimum balance required to avoid a monthly fee increased noticeably for both checking accounts (11.76 percent) and savings accounts (9.07 percent).
The good news? Non-bank ATM fees fell an additional 3.95 percent during Q2, after declining 14 percent since the beginning of 2014.
Personal bank accounts are cheaper than business accounts, so it might pay for you to keep using yours. Business checking accounts are 147 percent more expensive than personal online checking accounts, and provide 80 percent lower interest rates and half of the features.
Image via WalletHub
The most expensive checking accounts out there are business accounts at a branch bank.
The least expense? Student checking accounts at a branch bank, followed by personal online checking accounts. Fees are highest at national banks and lowest at credit unions.