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Top Credit Card Stories of 2012

7. Major strides in technology
Technological changes made last year will re-shape the card industry.

A number of products are now on the market that turn smartphones and iPads into credit card readers, allowing independent vendors to accept credit cards in remote locations. Products such as Square, Paypal's Here, Bank of America's (BAC) Mobile Pay on Demand and Groupon (GRPN) Payments are becoming more popular.

Digital wallets showed tremendous growth in 2012. These products make online check-out faster, thus decreasing shopping cart abandonment. Instead of entering a long credit card number and shipping address, customers enter an email address and password and the shipping information is filled in automatically.

American travelers run into complications when card readers in a foreign country do not accept magnetic strip cards, since many have converted to chip technology known as EMV (for Europay/MasterCard/Visa) in which with cards are embedded with a microprocessor chip that encrypts and stores account information. Now banks are slowly adding EMV here.

MasterCard announced plans to test a credit card in the next few weeks in Singapore that contains a built-in LCD display and a keyboard. While functioning as a traditional credit card, the MasterCard Display Card will allow customers to use these unique features to create one-time passwords to buy items online.

8. Spending on mobile devices
Consumers are changing the way they spend their money. A greater number of people are feeling more comfortable with spending via their mobile devices, and the rapid growth underscores how retailers need to adjust to this booming mobile commerce. A study by Javelin Strategy & Research reveals that more than $20.7 billion in sales took place on mobile devices in 2011. Another report from IDC Financial Insights predicts that purchase volume on mobile devices throughout the world by consumers and businesses will exceed $1 trillion by 2017. The majority of this volume will come from mobile commerce, which includes e-commerce through a mobile Web browser and the purchase of digital media.

9. Discontinuation of payment protection
After a series of consumer lawsuits and new fines from the Consumer Financial Protection Bureau, some credit card issuers got out of the payment protection business. The payment protection plans were marketed as a way to help consumers through difficult times, but the protection plans had restrictions and were criticized as misleading consumers. The Government Accountability Office found that cardholders got just 21 cents in tangible financial benefits for every dollar spent in debt protection product fees from the nine largest credit card issuers.

Bank of America stopped promoting its Credit Protection program in August and no longer offers the program to new customers. It plans to drop the payment protection business next year. American Express dropped its Account Protector program Dec. 31.

10. Elizabeth Warren
In November, Elizabeth Warren was elected to be a senator from Massachusetts. Warren helped create the Consumer Financial Protection Bureau, and the possibility of her leading the CFPB alarmed Republicans. She did not get the post and instead entered politics. After her victory over Scott Brown, Warren was picked to have a seat on the Senate Banking Committee where, ironically, she will be a watchdog over banks and financial institutions.

Bill Hardekopf is chief executive of LowCards.com, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."
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