The latest J.D. Power survey shows credit card issuers are not meeting consumer expectations. Here's what went wrong. (iStock)
Credit card customers’ expectations for credit cards are revolving, and a new J.D. Power survey shows many card issuers are failing to keep up.
The decrease in customer satisfaction was led by midsized card issuers who couldn’t keep up with the evolving needs of consumers during today’s volatile economy.
"While there are some bright spots this year among individual issuers, the pandemic really broke a multi-year trend of improving satisfaction," said John Cabell, J.D. Power director of banking and payments intelligence, in a release. "The industry missed the mark on supporting customers’ changing needs when many were facing significant financial challenges.
"Whether through blunt actions, such as tightening credit limits at the very moment when customers were most reliant on their cards as a source of short-term funding, or through lack of customer service accessibility, credit card issuers experienced declines in overall satisfaction, trust, brand perception and Net Promoter Scores this year," Cabell said.
If you are struggling with your credit card company interaction or want to find an issuer that works best for you and your purchases, visit Credible to compare multiple card options and choose the one that best fits your needs.
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What led to satisfaction decrease
On a 1,000-point scale, overall satisfaction fell to 805, down from 811 a year before. Among midsize lenders, the score dropped by 17 points to 796. However, not all card issuers disappointed consumer expectations. Goldman Sachs, issuer of the new Apple Card, held a score of 864 - the top score and 47 points higher than its nearest competitor.
American Express ranked highest in customer satisfaction among national issuers, with a score of 838. Discover at 837 ranked second and Capital One at 815 ranked third. Among midsize issuers, Goldman Sachs ranks highest in customer satisfaction with a score of 864. BB&T, Huntington and PNC rank second in a tie, each with a score of 817.
The study showed that specific pain points for consumers over the past year included:
Decreasing credit limits: Across the U.S., 2% of cardholders said their credit limits were reduced, and 3% of those with cards from midsized issuers reported the same. For those that had their credit limit lowered, overall satisfaction scores were 141 points lower than those who didn’t.
Not happy with rewards: During the past year, many national card issuers made changes to their rewards programs. Key examples include making grocery shopping and takout dining eligible purchases to earn points. However, satisfaction with earning perks still decreased. With Credible, you can see what kind of bonus cashback you could earn with reward credit cards. Or, for example, if you are looking for something more specific like travel rewards, narrow your search to browse cards that offer no foreign transaction fees, higher cashback on airline purchases and more bonus categories for frequent travelers.
Fintech entrants raise the bar: Fintech companies are increasingly entering the credit market and setting higher standards, making it hard for others to keep up. For example, 33% of cardholders in 2021 are using mobile payment services - satisfaction among these cardholders is an average of 39 points higher. Also, buy now pay later (BNPL) loan services are allowing shoppers to pay off loans in installments for their shopping trips and avoids revolving credit lines or high-interest debt.
If you are wondering if a credit card is right for your transactions, it helps to compare multiple cards at once to ensure you get the best credit limits and rewards programs. Visit Credible to find the credit card that’s right for you by comparing options in multiple categories and see a card’s rewards.
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Make sure you have the right card
Some decreases in customer satisfaction could be alleviated if the consumer ensures they have the right card to fit their financial needs. Misalignment between rewards programs and spending patterns is associated with an average of $756 in lower monthly spending, the J.D. Power study showed.
This misalignment also results in a seven percentage point higher likelihood of switching cards and a four percentage point higher likelihood of reporting a problem. About 53% of cardholders who struggle to pay bills or struggle with financial planning have their cards misaligned.
Customers should review their card usage to ensure they are getting the best value for their card, and if the cash rewards they earn offset annual fees or a high interest rate on card balances. It’s important to determine if the card will be used more for balance transfers, travel purchases such as rental cars or airfare, or on everyday spending such as merchandise, gas stations, grocery stores and more. At Credible, consumers can choose the type of spending they will most likely use their card for, and find multiple cards that are specifically catered toward that spending type. Visit Credible to get prequalified in minutes without affecting your credit score.
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