Credit card users are more satisfied with their cards in 2013, but a substantial number remain confused about their rewards and terms, according to the 2013 Credit Card Satisfaction Study by J.D. Power.
The study showed the credit card industry is making positive strides with its customers as cardholder satisfaction improved for the fourth year in a row.
Nonetheless, the study showed fewer than one-half (47 percent) of credit card customers say they “completely” understand their card terms. Among these customers, 73 percent indicate a lack of clarity regarding interest rates, and 31 percent lack an understanding of late-payment fees.
In addition, many customers say they are confused about their credit card rewards. Customer understanding of how to earn and redeem rewards with their credit card has dropped over the past year, with 59 percent saying they “completely” understand how to earn rewards in 2013, compared with 66 percent in 2012. One-third of customers said they are unaware of the benefits associated with their card.
Reasons to Explain Rewards
The study showed there could be a strong financial incentive for issuers to do a better job explaining the rewards programs to their customers.
“Customers who use their card’s benefits spend an average of $400 more per month on their card, compared with those who are aware of benefits but do not use them, so clearly this is an area of importance to card issuers,” said Jim Miller, senior director of banking services at J.D. Power.
Improving Household Finances
The study also shows signs that economic conditions are slowly improving for households: 27 percent of credit card customers indicate they are better off in 2013, up from 23 percent in 2012 and 20 percent in 2011. On the other hand, 17 percent indicate they are worse off, down from 23 percent in 2012 and 29 percent in 2011.
For the 7th year in a row, American Express ranked highest in satisfaction by the 14,000 customers polled for the survey. Here are the five issuers with the highest ratings:
The study measures credit card customer satisfaction in interaction, credit card terms, billing and payment, rewards, benefits and services, and problem resolution. It was conducted in May and June of this year.
J.D. Power 2013 U.S. Credit Card Satisfaction Study,” J.D. Power: http://heartland.org/policy-documents/jd-power-2013-us-credit-card-satisfaction-study