Credit Cards in 2026: Big Card Changes Are Rolling Out — Here’s What to Re-evaluate Now

9:53Sean Pyles:Yeah, I mean, it's January. So the garden's pretty sleepy right now. But yeah, come spring, more than that way for sure.

9:58Elizabeth Ayoola:As you're talking, one more thing that I would like to spend money on is, I think since we're on the topic of feel good things, is giving random gifts to people in my life just because gifts. I know it's easy to give birthday gifts and when there's a special occasion, but isn't it such a great feeling when you just receive a gift out of nowhere just because of nothing, because someone just loves you?

10:17Sean Pyles:That's so sweet. I love giving really thoughtful random gifts to people. So whenever I travel, I try to pick up something for a friend if it reminds me of them. And I won't hold onto it until Christmas or their birthday unless it's like less than a month away. But I will just send my friends random things and just say, thinking of you, love you, miss you. And then they get to enjoy whatever random trinket I pick up. So I love that. It's very sweet.

10:39Elizabeth Ayoola:Very sweet. And I'm realizing now that I have all of these financial goals for this year, I'm going to need lots of buckets for them. I mean, these giving goals and things like that. So I'm going to open more accounts, Sean.

10:51Sean Pyles:There you go. You're coming over to my way of doing things. I love it. It's all about staying organized, right? That's the whole purpose is you want to make sure that you're saving enough for each distinct goal and not just taking from one account to fuel another and then kind of muddying the waters a bit.

11:05Elizabeth Ayoola:Not being loosey-goosey, as you say.

11:07Sean Pyles:Yes, loosey-goosey, exactly. What else are you going to spend more money on this year?

11:11Elizabeth Ayoola:One of the things, I guess I'm going to double back to what you were talking about earlier, is just, I guess, in the spirit of random acts of kindness, is giving more to people in need. So you know that I mentioned from my birthday celebration that we put together gift bags for homeless people, and I think it just opens something in me to want to do that more regularly. So I would love to put some of my funds into that and also just do more fundraising for people in need and give them things randomly, not just on the holidays or my birthday.

11:42Sean Pyles:We are such good people. Also, let's hold each other accountable because we have all these altruistic things that we want to do. Let's make sure we actually do them, Elizabeth. So let's check in every few weeks because it's easy to say you want to do these things. Actually doing them is a different thing. Not that I doubt us at all, but you know, it's good to have an accountability partner.

11:59Elizabeth Ayoola:Yeah.

12:01Sean Pyles:Okay. And now let's turn to what we want to spend the same amount of money on, roughly the same amount of money on this year. What's yours, Elizabeth?

12:08Elizabeth Ayoola:Travel and food. You know, I looked at, and sometimes I'm like, hey, girl, you might have eaten out a lot of times this week. And do we want to change that? And I'm like, hey, girl, absolutely not. So I'm still going to be eating out. It's still in my budget. I enjoy eating different food. I don't want my food that I cook every single day of my life. And travel is always going to be a love for me. I just want to do a better job at budgeting for my travel this year because I'll just be like, hey, I want to go on a trip and I'll have surplus in some account. And then, you know, but it's I think it's nicer to actually save towards a trip.

12:39Elizabeth Ayoola:I do not do that.

12:41Sean Pyles:Well, let me tell you, as someone who saved a lot for my honeymoon and wedding and didn't have to go into any debt for all of that, it felt great knowing that I wasn't going to feel bad at the end of it because I had all that money tucked away ahead of time.

12:51Elizabeth Ayoola:I did a pretty good job last year. You know, I did lots of thrifting and consignment stores of focusing on quality clothing. I do like to shop, so I don't feel like I have to stop myself from shopping, but it's just doing budget-friendly shopping. So I'm going to keep doing that this year.

13:06Sean Pyles:Yeah, I love that. Well, I'm kind of following you two around going out to eat. I'm planning to spend about as much and maybe even a little more on going out to eat at restaurants. I mean, Portland is a food haven. We have so many incredible restaurants here. and I really cherish the time that I spend having a good meal at a great restaurant with the people that I love and I think it's one of the best investments that I can make in like developing my relationships and having quality time with the people that I love in my life so I view it as a really important part of my day-to-day life so I'm just going to keep throwing money at all these restaurants I'm going to keep tipping well because I know it's worth it.

13:44Elizabeth Ayoola:Do you have any restaurants in mind that you would like to tackle this year or it's just randomly coming up with ones or researching or TikTok? Are you TikTok influenced?

13:54Sean Pyles:I'm not so big on TikTok in part because my ADHD brain gets too sucked into it. So I'm not on TikTok at all. But there was just a list put out by the Oregonian, the local newspaper of the best new restaurants in Portland. And one of them is a good ramen spot. So I'm going to go there. And then one of my favorite restaurants in town, Coquine, kind of a fancy place, just opened an oyster bar right next to their restaurant. So I'm going to check that out. Sounds good.

14:20Elizabeth Ayoola:I love oysters. Sean, I don't know if you love oysters too. Do you love oysters?

14:23Sean Pyles:I love oysters. Yes.

14:24Elizabeth Ayoola:Oh, another thing we have in common discovered in 2026.

14:28Sean Pyles:Next time we get together, IRL, we got to get some oysters.

14:31Elizabeth Ayoola:We got to get some oysters and we'll film some content and you guys can watch it. Don't ask me how yet, but you'll watch it of us eating oysters together.

14:38Sean Pyles:I'm adding it to the list of things that I need to do in 2026.

14:42Elizabeth Ayoola:Thank you. In a moment, we're going into the next installment of our series about your money in 2026. This time, it's all about credit cards.

14:51Sean Pyles:But before we get into that, listener, think about your values and how you'll spend your money this year. What are you going to spend more on or less on? We'd love to hear from you, so leave us a voicemail or text us on the nerd hotline at 901-730-6373. That's 901-730-NERD. Or email us at podcast at nerdwallet.com.

15:10Elizabeth Ayoola:And while you're at it, send us your money questions. Do you not know how to set some goals for yourself for the new year? Do you need some help? Do you need some accountability? We can answer whatever questions you have. Just send us an email or call us. All right, let's get to this episode's money question segment. That's up next. Stay with us.

15:32Elizabeth Ayoola:Today's episode is sponsored by Spectrum Business.

15:35Sean Pyles:Picture this. You're running a business and the internet drops during business hours. Your to-do list instantly becomes, one, panic. Two, stare at the router like you're negotiating with it.

15:46Elizabeth Ayoola:And three, start offering customers a brief moment of mindfulness while the checkout screen loads.

15:51Sean Pyles:For business owners, being connected isn't a perk. It's how you take payments, talk to clients, and keep things moving.

15:57Elizabeth Ayoola:Spectrum Business keeps businesses connected seamlessly with fast, reliable internet and advanced Wi-Fi. Plus, phone, TV, and mobile services if you need them.

16:06Sean Pyles:And Spectrum Business offers 100 % U.S.-based customer support 24-7 to help you stay up and running. That means you get actual help, not submit a ticket and hope for the best.

16:16Elizabeth Ayoola:Our colleague Carrie is a Spectrum customer. Shout out to our social media team. And she told us that she chose Spectrum because people online kept recommending it as a reliable and affordable option for internet and phone service.

16:28Sean Pyles:Carrie told us she was actually a little hesitant to switch at first because she'd been using a different service for a while. But after a year with Spectrum, she's had a really good experience. Her phone gets strong, reliable service, and it automatically connects to Spectrum Wi-Fi everywhere.

16:41Elizabeth Ayoola:Join the millions who rely on Spectrum Business. Visit Spectrum.com slash business to learn more. One more time, that's Spectrum.com slash business.

16:50Sean Pyles:Restrictions apply. Service is not available in all areas.

16:55Elizabeth Ayoola:In a classroom of sodas, most stay quiet. Then there's Mr. Pibb. Sweet cherry, bold outbursts. the kind of flavor that gets attention. Boom, kick up cherry. And you missed the pin. We are back and continuing our series about your money in 2026. So far, we've covered investing in housing and now we're moving on to credit cards, the plastic money millions of Americans use every day, including myself. We're gonna chat about how you can use them efficiently, what direction interest rates are going in, and also how you know the best ones in the market. Now, as we've been doing in this series, we will also explore NerdWallet's Best of Awards for, of course, credit card products.

17:39Elizabeth Ayoola:Now, I can't do this alone, so to help us navigate the world of plastic money, I'm joined by a credit cards nerd, Caitlin Mims. This is your first time on Smart Money, Caitlin. It is. I'm happy to be here. Welcome, welcome. We're happy to have you. All right, we're going to start with an icebreaker because Elizabeth loves a good icebreaker. Now, Caitlin, if you had to describe credit cards in 2025, what one word would you use?

18:05Sean Pyles:Chaotic, for sure.

18:07Elizabeth Ayoola:That's one of my favorite words, and I need to tell you why credit cards were chaotic in 2025.

18:13Sean Pyles:Yeah, issuers seem to be refining who they view as their ideal customer, so there were big changes to basically every class of card we cover. Several cards for fair and bad credit launched last year, and others updated key features, but we saw the most changes with travel credit cards. Just about every suite of airline card made major overhauls, and we had huge changes to general travel cards like the Amex Platinum and the Chase Sapphire Reserve.

18:38Elizabeth Ayoola:Yeah, I have both of those cards, and I am sorry to say that I did see those price increases, and no, I didn't get rid of my cards, so another expense for me, but I think it's worth it. All right, Caitlin, what were a couple of highs and lows that the credit cards industry experienced in 2025?

18:56Sean Pyles:Yeah, we're seeing a lot of issuers add perks, increase rewards, and just provide a lot of consumer-friendly benefits. One of the things that I've really loved is that issuers are, by and large, adding the ability to see if you're approved for the card before you actually apply. But along with this, issuers are increasing fees, like we just talked about, and offering a lot of niche perks that might not be relevant to everyone.

19:21Elizabeth Ayoola:I know. I think I don't know if it's the Chase Sapphire Reserve or the Amex Platinum, but I just remember they were offering like a Peloton membership. And I'm like, I'm not going to use a Peloton bike and I'm not going to start using it just because I want to use the membership. So I think it's important for people to think about whether they really are going to use the niche benefits.

19:41Sean Pyles:Yeah, definitely. And a lot of those benefits don't even cover the full cost of the actual membership.

19:46Elizabeth Ayoola:You see, Caitlin is educating us. All right. Can you talk about consumer patterns with credit cards in 2025? Maybe as it relates to things like spending, debt and consumer behaviors. And also, did anything stand out to you?

20:01Sean Pyles:Yeah, we've noticed that a lot more people are using buy now, pay later options for just general purchases and not even just on specific companies like Affirm and Afterpay. But we're also seeing more installment plans on credit cards. U.S. Bank even launched a credit card recently where every purchase is automatically put into an installment plan. These programs can offer some flexibility when you need it, but they can also encourage overspending.

20:27Elizabeth Ayoola:Yeah, that's my main concern, the overspending element, because sometimes you tell yourself, hey, if I am able to pay this off in four or in six, then I have more time to pay it. But then you start buying more things and then you're just paying things for a long period of time. Totally. and doing what you call buy now, pay later loan stacking.

20:46Sean Pyles:Yep.

20:46Elizabeth Ayoola:Now, something I noticed towards the end of 2025 is that buy now, pay later was becoming standard on many credit cards, as you mentioned. So can you talk a bit about how this works and whether it may be a helpful feature for consumers to lean into in 2026?

21:00Sean Pyles:Yeah, every issuer's program is a little different, but generally any program or any purchase over$100 is eligible. and you can choose a payment length of anywhere from three to 12 months. And it can be really great for one-off purchases. I moved cross country last year and used this on my credit card. I was able to purchase some items for my apartment during way day and prime day without having to pay off the balance right away. But just like standalone companies, it's not really a sustainable option to use all the time. The monthly fees will be lower than interest most of the time, but payments will still add up like you were talking about buy now pay later stacking and really it's just not going to be a sustainable solution if you feel like you need to use these programs for everyday purchases i highly recommend looking at your budget and seeing if you can cut

21:53Elizabeth Ayoola:any expenses first i love that and i love that you mentioned that you know sometimes there is a really huge payment and it will be cheaper to use a buy now pay later loan rather than put it on a credit card and get charged all that interest if you can't paid off in one month. But I think what you said, budget is the key word there. So even when you're using these buy now pay later loans, you still need to bake those payments into your budget.

22:14Sean Pyles:Totally. And, you know, if if your expenses are significantly higher than your income, sometimes that can't be helped. But again, buy now pay later will come back in the end and just be unsustainable.

22:28Elizabeth Ayoola:Absolutely. All right. So So credit card debt has ticked up since the pandemic. Experts predicted this would be the case, so it's no surprise. Things like cost of living pressures, economic uncertainty, and less than impressive job reports are factors that may have pushed more people to rely on credit cards. What were debt and delinquency rates like in 2025, and how do you think they'll change this year?

22:53Sean Pyles:Yeah, I mean, credit card debt has increased, but we're not seeing it increase at the same rate across all income brackets. According to the Fed, debt for low and middle income earners has surpassed pre-pandemic levels, but it's actually stayed pretty steady for people who make above$121 ,000. But interestingly, we've seen credit card delinquency rates drop slightly. This could be because more consumers are paying at least the minimum, or it could be that issuers are less willing to approve applications for risky borrowers.

23:25Elizabeth Ayoola:Or people are listening to our podcast and they're applying our advice. Yes, or reading the wonderful articles that you're writing, Caitlin. The Fed cut rates multiple times last year. And do you think that made a dent in the APR on credit cards? I know some people assume that the Fed cuts will dramatically decrease their APR. Meanwhile, the needle doesn't tend to move much.

23:48Sean Pyles:So most credit cards have a variable interest rate that is tied to the Fed's interest rates. So issuers will generally lower rates in tandem with the Fed. But issuers don't always lower APRs immediately, and they don't always lower APRs at the same rate. Even if they do pass on the full amount, though, consumers might not feel much of a reprieve because interest rates are just significantly higher on credit cards than on something like mortgage rates. If your APR drops from 20 percent to 19.75 percent, you're looking at maybe a few dollars saved over the course of several years.

24:22Elizabeth Ayoola:Caitlin, what do you think will happen this year as it relates to APRs and consumer credit card debt? Could we see people pull back on spending and balances go down?

24:32Sean Pyles:I don't want to speculate too much just because there's so many factors at play, like job loss, inflation, and just general economic uncertainty that a lot of people are feeling right now. But regardless of what happens in the future or what the Fed does, consumers with credit card debt should be proactive and make a plan to pay it off.

24:50Elizabeth Ayoola:For consumers carrying credit card debt into 2026, what are some options they can explore to minimize that debt?

24:56Sean Pyles:My first recommendation would always be to get a credit card with a 0 % balance transfer offer. It sometimes seems counterintuitive to get another credit card for credit card debt, but this really is the best way to pay off your debt without accruing interest. You can also look at credit cards you already have. A lot of them will give existing cardholders a 0 % interest rate as a retention offer. on balance transfers. But it's important to know that you generally can't transfer a balance from one card to another with the same issuer. So if you have debt on a Capital One card, you'll want to look at a card on a different issuer like Citi or Wells Fargo.

25:36Sean Pyles:And if you can, try to pay more than the minimum payment. Even if you can only afford a couple of dollars each month, that will help you get out of debt faster. Another option is you could look into a debt consolidation loan. you will be charged interest. So it's not my first choice, but it will still likely be lower interest than you're paying on your credit card.

25:56Elizabeth Ayoola:Let's talk about fees now, Caitlin. We've seen many major credit cards substantially increase their annual fee amount, as you mentioned earlier. I have the Amex Platinum and the Chase Sapphire Reserve, as I also mentioned, and both have raised their annual fees to ridiculous amounts. Now, while they're allegedly adding more value in rewards in exchange for these higher fees, some consumers simply can't afford or justify paying$800 to$900 every year for a credit card. Do you think we'll continue to see increases in 2026? I'm crossing my fingers and my toes, and I'm hoping that's not the case.

26:31Sean Pyles:It's really tough to say. We saw a lot of annual fee increases last year, particularly with premium travel cards and airline cards. But issuers only tend to raise annual fees every couple of years, and other card categories have remained relatively stable. One area I'm personally watching is travel cards with an annual fee under$100, so cards like the Chase Sapphire Preferred and the Capital One Venture. These cards and their competitors have all had very stable annual fees over the last several years, but both the Sapphire Preferred and the Venture lost some key benefits last year, which tells me that issuers might not think that their current annual fees are sustainable.

27:10Elizabeth Ayoola:I like what you're saying about tracking cards with stable annual fees, because it really does feel like heartbreak when your fees go up and you realize you have to pay more for the card. All right. How should consumers approach weighing out whether it's worth keeping a card, especially if fees go up again this year?

27:28Sean Pyles:For me, there are really two factors to consider, value and effort. A lot of issuers have been adding what we call coupon book benefits to credit cards in exchange for these higher fees. So instead of general yearly credits on certain spending categories, we're seeing a lot of specific credits that are doled out monthly or quarterly. Some of these credits can be extremely valuable, but it also takes a lot of effort to use. If these credits take so much effort for you that it's unsustainable, it's probably not adding much value to your life. I also have the Amex Platinum, and when the annual fee increased from$6.95 to$8.95, one credit they added was a$100 quarterly credit to any restaurant on Resi.

28:08Sean Pyles:I live in a big city and already eat at restaurants on Resi, so this new credit easily added a net value of$200 for me after factoring in the annual fee. But if you don't eat out often or you won't spend at least$100 per quarter at Resi restaurants, this credit isn't that valuable for you because you'll just lose the amount that you're not spending on Resi restaurants.

28:29Elizabeth Ayoola:I love that you bring that up. Towards the end of 2025, me and my boyfriend were on a mission to spend our StubHub credit from the Chase Sapphire Reserve. And we love going to concerts. So we're like, let's look for a concert to go to so that we could each use that credit and it doesn't go to waste. So that's a really good point.

28:50Sean Pyles:Yep. I don't go to concerts that much. So that benefit really doesn't have much value for me.

28:56Elizabeth Ayoola:You see?

28:57Sean Pyles:Yeah, so if these benefits already match your spending like Rezzy does for me and StubHub does for you, and you can afford the higher annual fee, don't be scared to keep the card. But if the benefits don't add much value for you or maximizing the card is becoming too much of a stressor, just consider getting rid of it or downgrading it to another product the issuer offers. You can also contact customer service, tell them you're considering closing the account, and ask about any retention offers. They might offer you a temporary fee reduction or bonus points. This doesn't always happen, but it is worth asking.

29:34Elizabeth Ayoola:Well, speaking of which, some people may be looking at getting new credit cards this year and ditching the old ones. Now, your team did a best of credit cards roundup, which I think will help consumers make an informed decision, which is what we're trying to do here at NerdWallet. Talk us through the work that went into compiling this list and the metrics that you use to choose the winners.

29:53Sean Pyles:We take both an objective and subjective approach to picking winners on credit cards. Throughout the year, my team reviews products and gives them a star rating, which considers things like fees, rewards rate, and perks. Our star ratings are a really helpful guide, but they capture a card's value today, not what it will be tomorrow or a year from now. The credit card landscape changes very rapidly, and our winners need to hold up throughout the year. So we use our star rating as a jumping off point for cards we would consider for each category. Then we have several team discussions about consumer spending, credit card trends, and whether any card or its issue or brand has any concerning changes that point to less value in the future.

30:33Sean Pyles:So one example from this past year is Southwest made sweeping changes in 2025, including adding baggage fees and getting rid of open seating that just went into effect this year.

30:45Elizabeth Ayoola:Boo. Sorry.

30:50Sean Pyles:Yeah, I love me some open seating. But so their suite of credit cards changed as a result of those changes. And the Southwest Priority now offers seat upgrades when available. That's a great benefit and could be a lot better than the card's previous four upgraded boardings because it's unlimited. But right now it's mostly untested. We don't know how often cardholders will be able to use it or if there will be such high demand for upgraded seats that cardholders rarely get the option to use it. So right now, it doesn't make sense to consider that perk when we're looking at winners.

31:29Elizabeth Ayoola:Thanks for explaining that and giving us insight. So what were the top credit cards and did any make the list that you underestimated initially?

31:36Sean Pyles:So we have more than a dozen winners, which you can find at NerdWallet. But some of the winners I think most listeners would be interested in is the Chase Sapphire Preferred, which won our all-purpose travel category, the Wells Fargo Active Cash, which won our all-purpose cash back category, and the City Simplicity, which earned the award for best balance transfer card. But you asked if anything was surprising. I think the thing that's most surprising to me is that even though the credit card landscape changed so drastically in 2025, we picked the exact same cards that we did last year. Oh, wow.

32:11Sean Pyles:Yeah, it was pretty surprising to me when I looked at the list. Several cards closed the gap, but they just didn't really pull ahead. One example would be in our all-purpose travel category. The Chase Sapphire Preferred used to have a 1.25 redemption rate on all travel booked through Chase. That was a huge benefit that Chase got rid of. And at the same time, the City Strata Premier added American Airlines as a transfer partner, which makes it significantly more valuable. It's the only issuer to have American Airlines as a transfer partner. But even though the Chase Sapphire Preferred was no longer a shoe-in for the award, it still had enough perks to keep winning, like primary rental car insurance, which is boring, but frankly, my favorite perk on the card, and multiple great transfer partners like United and IAD.

32:58Elizabeth Ayoola:Okay. Well, now that we talked through last year and looked ahead to this year, we want to leave listeners with words of wisdom, Caitlin. in. There are always lessons that we can learn from the past. And what are some lessons that credit card users can carry forward from 2025?

33:13Sean Pyles:Pick the card that's right for you, not the one that's trendy or making headlines. The Chase Sapphire Preferred is such a great card, and it's my personal favorite card that I have. But if you don't travel, it's not going to be that valuable for you. And a cashback winner might be better. Also, remember that if you're not paying off your balance in full each month, any reward you earn is going to be canceled out by interest. If you're in a financial situation where you need to carry a balance, a card with a long 0 % introductory APR on purchases is going to be a much better option.

33:44Elizabeth Ayoola:Caitlin, thank you so much for coming on and talking to us about credit cards in 2026. Thanks for having me. All right. And that's all we have for this episode. Join us next time as we continue our series about your money in 2026. We're going to talk all things insurance during the next episode. But before then, we want you to follow Smart Money on your favorite podcast app. That's Spotify, Apple Podcasts, and iHeartRadio. And we want you to automatically download new episodes in the process. And here's our brief disclaimer. We are not your financial or investment advisors. This nerdy information is provided for general educational and entertainment purposes.

34:19Elizabeth Ayoola:And it might not apply to your specific circumstances. This episode is produced by Tess Vigland, Hillary Georgie helped with editing. Nick Karisamy mixed our audio and a big thank you to NerdWallets editors for all of their help and with that said until next time turn to the nerds