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The seven in 10 Americans who have at least one credit card are in for some surprising changes to their accounts and account benefits in 2020. Since most of our JCN community members are in that number, we have been keeping up with some of the expected changes. Some economists say the changes are in response to the uncertainty about the American economy, according to a recent survey of senior loan officers by the Federal Reserve.  The national buzz about a possible recession has caused credit card companies to proceed cautiously into the coming year. Here are some of the expected changes:

AMERICAN EXPRESS: Starting January 1, AMX is canceling or changing some of its services. Cardholders will no longer be able to purchase travel accident insurance. Also, the 120 days of purchase protection AMX previously offered will be reduced to 90 days. The 24-hours dispatch hotline for roadside assistance will be phased out by the beginning of the year. AMX is also unveiling changes to its extended warranty program for purchases made using the card. Those benefits will also be downsized. A good-news change for some users is a new policy for the traditional green card. Cardholders no longer have to pay their balance in full at the end of the month. Balances can be carried over.

CITI: Some credit card companies took early action to trim benefits. CITI actually cancelled some of its services and benefits a couple of months ago. It eliminated its roadside protection service, 90-day return protection, lost baggage protection, travel accident insurance, and worldwide car rental insurance, among several others. Upon cancellation of these services, CITI issued a statement that faulted “sustained low usage of selected benefits” as the reason for the cutbacks.

FRAUD PROTECTION: Increasingly, credit card companies are using a fraud prevention strategy called “tokenism.” Under this system, every single purchase gets its own unique code. Think of it as being as though every purchase is made with a different credit card, even though you are always using your only card. Because each purchase gets classified as from a unique number, the card itself never becomes compromised. Since companies using it have already reported great success, it is likely others will adopt this technology.

STREAMLINING THE APPLICATION PROCESS: Banks are always looking for ways to increase the speed and efficiency of the approval process for consumers who apply for their cards. Some are looking at one click processes, in which the applicant sends a text message to retrieve the application link, and then applies using their phone. If the bank already has financial information on file about the applicant, the approval process is expedited and the applicant can start using the account immediately. The flip side of this news is that in the third quarter of this year, banks generally tightened their standards for approval. One factor that may be more heavily scrutinized is your credit score. It is possible that some banks will require higher credit scores than they used to before approving an applicant.

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