Wednesday, Sept. 2
Posted 2 p.m. EST
Bankrate reporter Leslie McFadden contributed this entry.
Customer satisfaction with their credit cards sunk to its lowest level in three years, according to the J.D. Power and Associates 2009 Credit Card Satisfaction Survey. Satisfaction fell to 703 on a 1,000-point scale, a record low since the first annual survey in 2007.
"The largest decline was attributed to the fees and rates factor, down 37 points overall, says J. Michael Beird, director of banking services at J.D. Power and Associates, a global marketing research firm. Not surprisingly, satisfaction with fees and rates plummeted 53 index points year over year among those who carry a balance month to month. APR increases don't mean much if you don't pay finance charges.
Overall about 20 percent of credit card users reported an increase to their interest rate since 2008, up from 10 percent who reported a rate hike in the 2008 survey. Among revolvers the ratio is higher, one-fourth of this group experienced a rate hike.
About 14 percent of respondents were hit with late fees, up from 11 percent last year. Most people who triggered a late fee also carried a balance: 22 percent of revolvers incurred a late fee, versus 6 percent of "transactors," or those who pay the balance in full every month.
"Revolvers were the ones who seemed to get hit hardest within the context of the study," says Beird. Revolvers represented a slight majority of survey respondents: 5,120 to 4,308 transactors.
Surprisingly only 5 percent of all card users saw their credit lines decrease, up from 1 percent in 2008, while 20 percent reported an increase. A year ago, 37 percent said their credit lines increased.
Beird said the low number of credit line changes could be due to awareness. At present, issuers are not required to tell customers in advance of a change to the credit limit. The Credit Card Accountability, Responsibility and Disclosure Act, most of which takes effect in February, doesn't require 45 days' advance notification of credit limit changes. The burden remains on consumers to check their limits each month.
In the study, 89 percent said that credit line adjustments occurred without their prior knowledge.
Winners and losers
Issuers were scored according to cardholder satisfaction in six categories: customer interaction, fees and rates, billing and payment process, rewards, benefits and services, and problem resolution.Seven card issuers ranked above the industry average of 703 for overall satisfaction. American Express leads the pack, followed in order by Discover Card, National City, Wells Fargo, Barclaycard, U.S. Bank and Chase. Citi rated right under the industry average, while Bank of America and Capital One came in 11th and 14th place, respectively, out of 18 spots on the chart. Issuers that didn't make the list had too small of a sample size.
Beird suggests that issuers could improve customer satisfaction by stepping up communication about rates and fees. They could use multiple disclosure methods, such as e-mail and notification letters that arrive separately from the statement.
Find out how the top credit card issuers ranked in each category.
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