U.S. consumers are less satisfied with their credit cards than they were a year ago. The biggest gripes, according to the J.D. Power and Associates 2009 Credit Card Satisfaction Study-fees and rates.The study found that overall credit card customer satisfaction decreased to 703 on a 1,000-point scale, the lowest level since the study's inception in 2007. Overall satisfaction among credit card customers reeained the lowest across the financial services industries in which J.D. Power conducts research, including insurance, banking and investment services.
The study measures customer satisfaction with credit cards by examining six key factors: interaction; fees and rates; billing and payment process; rewards; benefits and services; and problem resolution. Satisfaction with fees and rates dropped to 603 points, down 37 points from 2008, contributing considerably to the decrease in overall satisfaction.
Furthermore, almost 20 percent of consumers said their interest rates increased in 2008, almost double from findings in the study from last year. This dissatisfaction was even more pronounced in those who carry a balance from month to month, with a drop of 53 index points from the previous year.
Those card companies that rated highest in satisfaction were American Express, Discover Card and National City (which was acquired by PNC Financial).
I can't wait to see what the results will be for next year's study. This will be J.D. Power's first look at the credit card business post-implementation of the Credit Card Accountability Responsibility and Disclosure Act of 2009 legislation. As a consumer, it will be great to have a more straightforward relationship with my card company and not have to worry as much about the seemingly arbitrary rate increases. However, card companies will likely have to change their operating models at some point in order to turn a profit. I tend to agree with those analysts who anticipate a return to annual fees on credit cards. And once these come back into play, I wonder at the degree to which this will impact the card companies' relationships with their customers. It's one thing to sign up for an American Express card-you know up front there will be an annual fee for the kind of service Amex provides. However, the average Joe and Jane might be a bit stunned once they find the MasterCard or Visa credit card they've had with their bank for 10 years suddenly starts charging them an annual fee.
And that's not to mention the likelihood of cutbacks to rewards programs that card companies are starting to examine. This has already begun in some cases.
Also, some card issuers are ramping up their efforts to deactivate credit cards that have been used sparingly by their owners or were attached to some low teaser rate. This, say analysts, is being done by some banks to jettison potentially higher risk customers, thinking it best to just cut themselves free of potential losses.
I think it's great to curtail some of the more consumer-unfriendly practices of the card companies, but like it or not, there will probably be some consequences to this legislation that the ordinary American just isn't aware of right now.