Though impenetrable financial terms and opaque rewards programs still plague cardholders, we are increasingly satisfied with our plastic
For the fourth year in a row, the consumer survey company J.D. Power and Associates has found that credit card customers are increasingly satisfied with the way they are being treated by most credit card issuers. Overall satisfaction averages 767 on a 1,000-point scale, an increase of 14 percentage points over 2012 and a continuation of an upward slope in approval that began in 2010.
“There are a lot fewer negative things going on with our credit cards and with our economy,” said Jim Miller, senior director of banking services at J.D. Power, which issued the report Thursday. “People are not having as much trouble paying off their credit cards and paying down other debts. So, we’re feeling a lot better about our credit cards.”
Several factors appear to be behind the affirmative trend, he said. Most importantly, the nation’s slow but noticeable recovery from the Great Recession.
Asked about their economic situations compared to a year ago, 27 percent of this year’s respondents said they were better off, up from 23 percent in 2012 and 20 percent in 2011. Only 17 percent said they were in worse shape, compared to 23 percent last year and 29 percent in 2011.
As a result, the latest credit card satisfaction scores are the highest since J.D. Power began conducting the survey seven years ago. Each of the 11 surveyed card companies experienced increases in their customer satisfaction ratings.
“There’s a lot less to be upset about,” Miller said. “People clearly are feeling better about their personal situations and their ability to handle their credit cards.”
Other major contributors: A broad range of consumer protections required by the federal Credit CARD Act of 2009, a relatively new national credit card complaint system established by the federal Consumer Financial Protection Bureau, and heightened activity on behalf of consumers by the Federal Trade Commission and other agencies.
Of course, your experience may vary, particularly when it comes to understanding the terms, benefits and rewards associated with your credit cards.
The latest J.D. Power survey found noticeable slippage in the percentage of credit card users who understand how to earn and redeem rewards such as statement credits, cash payments or free goods and services.
Only 59 percent of those surveyed said they fully understood how to earn credit card rewards, compared to 66 percent in 2012. In addition, one of every three respondents had no idea how to even access his or her credit card rewards program.
So, what is going on here? Are the credit card companies making this more difficult than it should be? Apparently so, Miller said, but not necessarily with intention.
“You see all these wonderful benefits in the initial marketing spins, but once you have the card, the company is not going to worry so much about communicating with you and helping you understand those benefits,” he said. “With all the information available to the credit card companies, I’m sure they know when I buy something that qualifies for their extended warranty, but they’re not likely to be reminding me of that protection.”
At the same time, 53 percent of the surveyed credit card customers report that they do not completely understand their credit card terms. The most common areas of confusion: interest rates (73 percent of respondents) and late payment fees (31 percent).
“Some of the crazy billing cycles and yucky terms that were ‘gotchas’ have disappeared, but there’s still all the legalese and small print that none of us ever read,” Miller said. He agreed that even the 47 percent of those who claimed to completely understand the financial nitty-gritty of their credit card agreements probably really meant, “I understand the parts I need to understand.”
Still, for most of us, our relationships with our credit card issuers have become, if not exactly exemplars of mutual love and devotion, at least models of toleration.
The annual survey measures six factors: credit card terms, billing and payment systems, customer service, rewards, problem resolution, and benefits and services. The credit card industry registered improvements in all six of the categories, Miller said.
Some other results:
- Once again, American Express led the way among the 11 companies surveyed. For the seventh consecutive year, American Express ranked highest in credit card customer satisfaction. Its score of 816 beat the industry average by 49 points. AmEx fared particularly well when it came to rewards, benefits and services, and billing and payments.
Company officials expressed their own satisfaction over the results of the survey and pledged to extend their track record.
“This prestigious recognition demonstrates the importance of putting customer satisfaction and service at the heart of everything we do and delivering outstanding value through extraordinary products, service and experiences,” Kenneth I. Chenault, American Express’ chairman and chief executive officer, said in a written statement Thursday. “The feedback provided by consumers through this study will help us continue to raise the bar as we work to exceed the expectations of our customers.”
- Discover came in a close second, with 812 points. It performed notably well in the areas of credit card terms, interaction with customer service representatives, and problem resolution. Discover has held the No. 2 slot in this survey since it began seven years ago.
“We are pleased to be ranked among the industry’s best across all factors in the study and are grateful for the incredible loyalty our customers have shown us year after year,” said Carlos Minetti, the company’s president of consumer banking and operations. “At Discover, we remain committed to providing our card members with the best possible customer service, with relevant rewards, experiences and value that really makes a difference in their lives.”
- In last place, as usually seems the case, was HSBC, with 709 of 1,000 possible points. Perhaps mercifully, this likely will be the last time HSBC will appear in the survey. It sold virtually its entire U.S. credit card operation and has transferred those customers to Capital One, which placed eighth in the latest survey, with 756 points.
“HSBC still issues credit cards for its branch customers, but we are no longer a major player in the U.S. credit cards market,” said Neil Brazil, HSBC’s vice president and senior manager of communications.
- Relatively few U.S. consumers are using mobile apps or text alerts associated with their credit card accounts. Only 5 percent of those surveyed responded affirmatively to that question, and most of them were young adults. That places the credit card industry considerably behind closely related retail banks, which boast a 19 percent penetration rate when it comes to customer adoption of mobile technology.
The latest study surveyed more than 14,000 U.S. credit card customers. It was conducted in May and June 2013. For the most part, Miller said, it delivered good news to credit card customers and card issuers.
“We’re definitely feeling better about our credit cards,” he said.