Customer satisfaction with credit cards has rebounded this year from a three-year low in 2009, according to a new study from J.D. Power and Associates. Overall credit card satisfaction with the top 10 issuers averaged 714 on a 1,000-point scale for 2010, up 9 points from 705 last year. The study, in its fourth year, measures customer satisfaction by looking at six main factors - - interaction; credit card terms; billing and payment process; benefits and services; rewards; and problem resolution.
Despite the uptick in overall satisfaction, fewer cardholders declared that they "definitely will not switch" primary cards in the next 12 months. "So, they're more satisfied, but they're thinking they may go elsewhere," says Michael Beird, director of banking services at J.D. Power and Associates.
American Express leads the pack
Four card issuers beat the industry average of 714. For the fourth consecutive year of the study, American Express ranked highest in customer satisfaction, followed by Discover, U.S. Bank and Wells Fargo, respectively. Chase, Barclays Bank, Bank of America and Capital One ranked in the middle of the pack, while Citi and HSBC garnered the lowest consumer ratings for satisfaction.
What are the issuers of highly satisfied customers doing right? For one thing, they're doing a good job of making customers aware of available benefits and services, according to Beird.
"Satisfaction goes up if I'm aware that I'm getting more from my card," he says. "That's a very prominent trait of certainly of American Express, also of Discover, that customers can cite more benefits and services for being a cardholder for them than for others."
Customer interaction also proves key to satisfaction. For example, having a user-friendly website where customers can easily find information. "They're making it easy for customers to find out about their accounts. And when need be, they're making it easy to get a hold of live agent," says Beird.
Some issuers did a better job than others when it came to informing customers about the Credit Card Accountability, Responsibility and Disclosure Act, or Credit CARD Act. About 16 percent of consumers say they didn't receive disclosures about the CARD Act, which was rolled out in stages through 2009 and 2010. For those who did receive notices, just two-thirds said the disclosures improved their understanding of what the law meant for them.
Beird says that "American Express, Discover and even Bank of America did a good job of getting out ahead of the game" by using multiple channels to explain the new rules.
Overall, consumers reported fewer problems and issues. The problem incidence rate declined 4 percentage points since the 2009 study to 14 percent.
Those in debt more satisfied
Satisfaction actually increased this year among "revolvers," or people who carry a balance on their card, but remained flat for "transactors" that typically pay their balances in full each month. The reason could have a lot to do with the CARD Act, which among other changes, requires 45 days advance notice before most rate increases and increases to certain fees take effect. New rules for credit card disclosures that took effect in July 2010 also make billing statements and agreements easier to read and understand.
In the press release for the study, Beird explained that revolvers, who tend to be "more sensitive" to interest rates and fees, are "significantly more likely to say that CARD Act disclosures improved their understanding of their credit card terms." Revolvers also may have felt that their changes in terms could have been worse, he added.
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