The financial world will undergo big changes in 2017. These changes will impact investments, taxes, credit cards and debt. Here are the 7 biggest trends for finance in 2017.
1. Major tax reform.
With a new president in the White House, there will be new changes to taxes. President Trump vowed during the campaign to make sweeping changes with the U.S. tax code. First, Trump wants to reduce the income tax brackets. He then wants to repeal the alternative minimum tax, eliminate standard deductions and end the estate tax. He also plans to cap itemized deductions and repeal the Affordable Care Act. While Congress still has to approve which — if any — of these changes will occur, it would be wise for people to consult their accountants to see how the tax changes will impact them.
2. Credit cards evolving.
2017 will mark the beginning of a change in the credit card industry. Credit card companies will start breaking away from their standard as payment systems and focus squarely on retail sales. This explains why numerous credit card companies developed new software and applications geared towards handling alternative e-commerce payments. All of these changes could result in higher credit card fees for consumers.
3. Higher interest rates.
After years of low interest rates at around 0 percent, it seems that that will change in 2017. The Federal Reserve is expected to raise interest rates to a range of 0.25 percent to 0.5 percent. The first interest rate hike will occur in early 2017, with more potential rate hikes later in the year. For savers, this rate hike could eventually boost bank interest rates for savings accounts. However, for borrowers, a rate hike could be problematic. One potential way to avoid the interest rate hike would be to refinance for a fixed rate loan.
4. The rise of robo advisors.
More investors are turning to robo advisors to handle their portfolios. Robo investing typically involves online financial technology companies that allow investors to easily allocate funds. Instead of a traditional advisor, robo investing involves computer algorithms that help investors grow their portfolios at a low cost. Robo advisors are generally very user-friendly. As result, their popularity has grown in just a few short years. In 2017, more investors will flock to robo advisors. Within a few years, up to 10 percent of all global assets will be run tied to robo investing.
David Milberg is a financial analyst in NYC with nearly 3 decades of experience in the finance industry. He is a long-time owner of Milberg Factors, a factoring and finance company with locations in New York, California, and North Carolina.