While 2013 was a solid year in personal finance, this coming year promises to be even better. As 2014 nears, look forward to expanded benefits, greater perks and an increasing effort by banks to educate consumers. Read on for NerdWallet's 2014 financial predictions.
|Non-traditional partnerships will increase|
Last year, more and more credit cards began offering perks beyond the typical one-time bonus and access to a card's online rewards mall. Certain American Express cards added a free year of Amazon Prime as part of the signup bonus; select Barclays and Discover cards offer free FICO score monitoring. Keep an eye out for more cards to try out such partnerships, perhaps switching between offers as they look for a good fit.
|Top perks become more widely available|
During the financial crisis, banks courted low-risk, big-spending consumers and were wary about lending to those with less-than-perfect credit. Now banks are again looking to serve a wider base of potential borrowers. Expect to see the same perks that banks used to woo the prime customers to become available to more people and at a lower cost. For example, the revamped GM Credit Card from Capital One is a World Elite MasterCard, with benefits like free upgrades to business class on some airlines and travel insurance. It also has no annual fee. Similarly, the no annual fee Barclaycard Arrival World MasterCard comes with exclusive events and concierge service, and isn't limited only to big spenders.
|Credit scoring will improve|
Increasingly, consumers and lenders are realizing that the traditional FICO score may not be the best indicator of creditworthiness. As anyone with no credit knows, the current scoring system often leaves people who haven't taken out lines of credit in the lurch – even if they're otherwise perfectly able and willing to pay their bills. In 2013, TransUnion joined Experian in accounting for on-time rent payments when possible to better gauge whether someone should have a high credit rating. Look for credit rating agencies to expand the criteria in their formulas to be friendlier to people with no credit.
|0 percent interest will be around for longer, and on more cards|
The average length of a promotional 0 percent APR period rose from eight months in 2010 to 11 months in December, as banks shook off the financial crisis and began to court people with existing credit card debt. In 2014, 0 percent periods will lengthen and be available on more cards, as banks try to poach each other's interest-paying customers.
|Alternative lending won't be so alternative|
Small businesses have faced strict lending standards ever since the recession: because banks often ask for years of financial statements, recently launched companies have trouble getting loans. New startups have stepped in to match up potential borrowers with lenders willing to overlook history in favor of other measures of creditworthiness. Kabbage, for example, looks at small business' shipping records and even social media, while On Deck Capital looks at suppliers' records. With the prevalence of big data and a clear market need, look for startups like this to proliferate and become more mainstream.
|Banks will step up to educate customers|
While many credit unions and community banks have long offered financial literacy tools, larger banks typically stayed clear. Now, Bank of America and PNC both have financial education programs; Bank of America actually partnered with the Khan Academy to develop theirs. As banks try to strengthen their brand and gain trust, they'll develop and expand financial literacy tools for customers.
|Black Friday will run the entire month|
While the influence of Black Friday will remain strong, the day itself will diminish in significance during 2014. As we saw, retailers are beginning their cost-cutting sales earlier and earlier in an attempt to steal competitors' shoppers. And 2014 will see retailers continuing to move their bargain-basement deals earlier in the month. And with online shopping – which allows retailers to change prices at will – the idea of a set discount may soon become obsolete.
|Life insurance will become more accessible|
Life insurance policies will attempt to meet the needs of younger consumers by becoming more understandable, web- and mobile-friendly, and easier to compare. Insurers will also reach out through more channels to broaden their base. You can buy MetLife policies at Walmart and Aetna ones at Costco; look for other retailers to feature life insurance as well.
|Use-based car insurance will grow more popular|
Increasingly, drivers are moving away from the traditional model of car insurance, which factors in relatively stable traits like age, gender, car and driving record. Instead, they will favor use-based, or pay-as-you-go, car insurance. This model rewards drivers for staying under the speed limit and keeping the mileage low, and reward drivers whose premiums are too high for the miles they drive.
As the average American's commute time continues to decline, drivers will seek out premiums that reward their changing habits. Technological innovation will also drive change in the car insurance market. Telematics devices will provide insurers with data on drivers' speed, mileage and driving habits, potentially lowering premiums further.
|More brokerage firms will incorporate social features|
Many consumers feel unprepared to start investing, particularly if they don't have a finance background. To address this, some online brokers are now allowing users to share investing ideas with each other. For example, foreign exchange specialist eToro boasts 2.75 million users in its online community, while Ditto Trade lets you view other users' trade history to buy what they buy. As everything from advertising to news becomes more social, brokerage firms will continue the trend.
This work is the opinion of the columnist and in no way reflects the opinion of ABC News.
Anisha Sekar is the chief consumer advocate at NerdWallet, a website dedicated to helping consumers make and save more money.