5 Credit Card Trends to Watch for in 2025

Last year was dominated by a dramatic presidential election and an economy that, while strong on paper, didn’t feel that way for many Americans. Here’s what we saw in 2024 when it came to credit cards and debt:

• Interest rates began to fall, but credit card APRs are still catching up: The Federal Reserve lowered interest rates three times toward the end of 2024, but it took a few months for average credit card interest rates to follow suit and come down slightly from a record high. 

• Debt and delinquencies rose, but things could be stabilizing: According to NerdWallet’s 2024 American Household Credit Card Debt study, revolving credit card debt increased just 1.5% from September 2023 to September 2024. But when you look at that same timeframe for the year prior, debt levels increased by 15%. Credit card delinquency rates rose steadily since the latter half of 2021, but they leveled off a bit between the third and fourth quarters of 2024.

• Attempts at certain industry changes stalled. The Credit Card Competition Act — first introduced in 2022, but still hotly debated in 2024 — aims to indirectly lower the credit card swipe fees merchants pay, by allowing them more choice among payment processing networks. Opponents, though, argue that any savings are unlikely to trickle down to shoppers, and they note that history suggests the plan could also negatively affect credit card rewards programs. Regardless, the legislation hasn’t meaningfully advanced in Congress. Separately, attempts by the Consumer Financial Protection Bureau (CFPB) in 2024 to cap credit card late fees stalled out when a federal judge blocked the new rule.

And just like that, we’re a quarter of the way through the 21st century. Here’s what’s coming in 2025 that could have unexpected impacts on credit cards.

The second Trump administration is here. While that news seems more political than financial, decisions made in Washington can affect banks, financial technology companies and, of course, consumers.

One big unknown at this point is the fate of the CFPB, as the new Department of Government Efficiency — co-led by businessmen Elon Musk and Vivek Ramaswamy — takes aim at federal spending deemed to be wasteful. Musk has called for the elimination of the CFPB, which was originally created to enforce federal consumer financial laws.

But if the CFPB’s future is at risk, it’s going out with a bang. Since December alone, the CFPB has been busy:

• It finalized a rule to eliminate medical debt from credit reports.

• It sued Experian, saying the credit bureau failed to properly investigate consumer disputes, which have resulted in incorrect information appearing on credit reports.

“In my view, the CFPB in the last year has done a lot of things, and all of them help consumers,” says Adam Rust, director of financial services at the Consumer Federation of America. “If there’s a deregulatory shift in Washington, all of those things are at risk.”

Potential deregulation in the banking industry, which essentially would loosen some of the rules banks must follow, could have positive and negative consequences for consumers. It could make credit easier to access for those with a wider range of credit scores, and open up possibilities for new technological advancements in the industry. But it could also limit (or eliminate) some consumer protections.

For the many Americans who’ve attained some immunity from vaccines or past infections, COVID-19 has become just one of the litany of seasonal respiratory viruses to be aware of, but not necessarily afraid of. It seems our spending habits have mirrored the ups and downs of the past five years, too. First, we stayed home and spent less. Then, we got back out there and revenge-spent our way into higher debt levels. Now, we’re getting closer to achieving moderation.

“For 2025, we predict stability,” says Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. According to TransUnion’s 2025 Consumer Credit Forecast, credit card balances and delinquency rates will still increase, but at lower rates than we saw in 2022 and 2023.

Raneri says TransUnion predicts inflation will lower to 2.26% by the end of the year, down from 2.9% in December 2024. Of course, this depends on a number of factors, including whether the Fed will adjust interest rates again in 2025.

Capital One announced its intention to acquire Discover in February 2024, which would make it the largest credit card issuer in the country. Capital One estimates the acquisition could be done early this year.

Capital One will still offer Discover-branded cards, but the big get for the bank is Discover’s payment network, even though it’s smaller than Visa, Mastercard and American Express. The plan is to grow the Discover payment network, perhaps making Visa and Mastercard sweat a bit. In theory, this could lead to lower interchange fees for merchants, which may lead to lower prices for consumers — but there are no guarantees there.

One detail that has frequent travelers concerned is Discover’s overseas acceptance rates, which aren’t as robust as Visa and Mastercard. If Capital One’s cards join the Discover payment network, will they lose their top-of-wallet status for anyone who travels abroad often?

You can take this off your list of things to worry about right at this moment, because the whole merger process could take years, according to Michael Hershfield, CEO and founder of Accrue Savings, a B2B payments and loyalty platform that allows its partners to create FDIC-insured digital wallets. “You have pre-existing deals with partners that are time-bound. I don’t think 2025 consumers will begin to feel some of those changes.”

Artificial intelligence is coming for everything eventually, but even now it’s so much more than a way for college students to fast-track their next research paper (you think you’re being clever, but your professor can tell). Credit card issuers are increasingly using AI to more quickly evaluate credit card applications, prevent fraud and target consumers for marketing campaigns.

Plus, it can help you solve issues with your card without sitting on hold.

“I expect apps to continue to improve, with a current focus across the industry on AI in chatbots and search to help consumers solve problems faster,” Matt Lattman, senior vice president of card acquisition marketing at Discover, said in an email.

Since 2019, median income hasn’t kept up with major expenses like housing, food and transportation. Consumers are looking for a deal, and credit card rewards programs remain a popular way to feel like you’re getting one. “Rewards have become something that’s really important to consumers, and a way to offset the cost of the things that they’re buying,” says Beth Robertson, managing director of Keynova Group, a financial services intelligence firm.

And it’s not just about redeemable points and miles — it’s also about scoring discounts. “One thing that we know is already happening — the card value proposition now is not just the rewards program,” says Jessica Duncan, assistant vice president of research and insights at Competiscan, a company that tracks and analyzes direct marketing activity. “It’s experiences, shopping deals.”

Still, the allure of cheaper travel remains strong. “People look at their rewards and they treasure them. It’s almost like a layaway plan for vacation for a lot of people,” Rust says. But he recommends you don’t cling onto your miles too tightly for too long. “It doesn’t make sense to bank them because you’re not going to earn interest on them.”

According to Duncan, travel and premium cards will continue to get revamped, which could lead to higher fees in exchange for more interesting perks. She cited multiple cards from American Express as examples of products that continue to make changes and target younger generations.