Every year I like to make a list of predictions for the upcoming year, we are getting into the swing of things for January so I thought it was a good time to finalize my predictions for 2018. You can see the predictions I and other sites made for 2017 here. You can also see a rating of my predictions and other sites predictions for 2017 here.
Contents
Other Sites Predictions
Below is a list of other sites that have made predictions for 2018 in this space. If you’re a blogger and have made some predictions, let us know in the comments so I can add it here. This list is oldest to newest.
My Predictions
Best Basic Savings Rates Will Hit 2% APY
This one should be fairly self explanatory but I think the best savings account with no requirements will be over 2% APY at years end. This doesn’t take into account rewards accounts that are already at up to 5%. The current highest rate is 1.65% but that requires a $50,000 balance. The highest without a balance requirement is 1.6% so I’m predicting an extra 0.4%, although I think that would be on the lower side of the movement we see. This might make things like balance transfers and 0% introductory APR offers more attractive as well.
2%+ Credit Cards Will Be A Thing Of The Past
Believe it or not I wrote this before the USAA Limitless and JCB cards were discontinued. But I don’t think offering 2%+ cash back on all purchases is sustainable long term (when I say this I’m talking about cards that earn 2.01% cash back or more, not cards that earn at the 2% level). Because those two are already out, my prediction is really that the Alliant 3%/2.5% card will be no more. The card was launched in March and I think they will see a lot of cardholders cancel after the first year, the cardholders that keep the card will be big spenders that are unprofitable for Alliant causing them to rethink this strategy. I’d say the card will likely be changed by June or July.
Southwest Will Announced Negative Changes To Companion Pass For 2019
I think the companion pass is just too valuable for Southwest to keep offering, especially when you can effectively get it with two credit card applications. The pass will only get more valuable when Southwest adds service to Hawaii. My guess would be that the amount of points required will increase, credit card sign up bonus points won’t count or some other negative change will occur. I think 2018 will just see an announcement made that qualification for the pass will change for the 2019 year.
Mobile Wallets Will Dominate
In 2017 we saw some promotions for mobile wallets like Samsung Pay and more recently Chase Pay. This area is just getting warmed up, expect to see all of these companies spend a significant amount to try and grab market share as spend on mobile wallets skyrockets. I made a similar prediction last year, but this year it’s really going to kick up a notch.
Final Thoughts
I’d love for readers to tell me what their thoughts of my predictions are in the comments. I’d also love to read your own predictions for 2018.
amzn hits 1800, amd hits 15, apple sinks to 140
ethereum hits 2000 , bitcoin sinks to 8000, most altcoins take hugh hit
My Prediction: Hyatt will introduce 5th night free on award nights, and introduce a new higher hotel category.
What does 2%+ mean? Does it mean 2% cards like Citi DoubleCash are going away (which is 2.000% only if you redeem your cashback by check, otherwise it’s slightly less than 2.000% if you redeem your cashback by statement credit), or just that cards OVER 2% are going away? This is very confusing phrasing IMHO.
It means cards that earn 2.01%+ or more, it doesn’t include 2% cards like the Citi Double Cash. I’ll try to rephrase to make it clearer.
Cryptocurrency $MTL and their app Metal Pay will be the top talk of all churners. 5% cashback on all transacations.
I predict Citi will force us to convert our Dividend cards after this year.
Depresses me if the Citi Dividend Card bites the dust. Fits well into my spending pattern.
DoC, what about creating an info post on mobile wallets? I’d be interested in reading your taken on how to set up (for noobies) and the pros/cons of different types. It could tie in to pass offers and also your speculation on the future of them.
The problem is most are restricted to a single device (e.g Google Pay for android, Apple Pay for iOS and Samsung Pay for samsung devices) I don’t think it makes sense to pick a phone based on the mobile wallet so not sure how useful such a post would be.
I’d say changes at the CFPB under a Trump director will diminish it’s role as a consumer focused watchdog, and in turn, will reduce banks willingness to hear/resolve complaints from our community. This can be from changes in the way the agency accepts and processes complaints to a reduced enforcement portfolio.
I don’t think 2+% cards will go away; but they might be moving to a relationship-based eligibility / redemption, like BofA cards. I think Alliant will be just restricting the card.
>2+% cards such as Alliant going away…..Makes me wonder didn’t these “smart” Bankers know this when they started it and got it approved? How did they argue it would succeed? What was their business plan?
Most of the 2%+ cards have some sort of restriction (e.g annual fee for Alliant, direct deposit for USAA). I guess when they do their modeling they don’t account for any high spenders due to MS.
Great article! I am hoping in particular that your prediction about the Companion Pass is not correct as I have grown accustomed to this perk! One thing that gives me pause is the recent offer in California for the companion pass. What are your thoughts on this? How can this possibly make financial sense for SW? Thanks!
This could make financial sense for SW. (1) When flight loads are between 80-85%, providing a free seat often does not cost anything as most costs per flight are fixed. So SW is giving away something consumers all find valuable, while it doesn’t necessarily cost SW anything. (2) While SW doesn’t incur costs, CP does impose costs to (or reduce revenue for) its competitors. SW is in a known battle for CA and is trying to curb Alaska/Virgin’s strategy to grow market share in CA. Both SW and AS have increased route frequency and launched new routes in CA, which to the first point lowers flight loads. The targeted CP promotion to Californians suggests CP provides competitive advantages. (3) CP permits SW to charge higher fares. I just did a random search for a LAX-SFO round trip. AS is $79; SW is $114. CP holders fly SW, but how much did SW really lose? Focusing on the two hypothetical passengers alone, SW either has $114 in revenue or AS has $158 in revenue. Considering the entire plane, SW may even have generated more revenue since non-CP holding but loyal SW passengers routinely pay the premium. (4) SW benefits from years of building a reputation as a low-cost alternative, regardless of whether that remains true. Those loyalists often don’t even price compare now. CP essentially guarantees brand loyalty, as it creates further economic irrationality at times. As an example CP holders are more likely to fly more than they would have. And SW is assured that those flights will be on SW metal. (5) All that said, SW did make CP more difficult to obtain last year by eliminating CPs through Marriott travel packages, so I’m pretty sure they know exactly what they’re doing with CP.
Good comments! Thanks for the insight! So do you believe that the companion pass will get still harder to obtain in 2018?