Amex tops credit card reward rankings
Customers confused by card terms, finds survey
American Express has been ranked top for customer satisfaction in a survey of credit card rewards schemes
Although credit card satisfaction continues to improve, a large percentage of customers indicate they do not fully understand their card’s terms, benefits and rewards program, according to the survey of customer satisfaction among US credit cardholders conducted by J.D. Power.
The study measures customer satisfaction with credit cards by examining six key factors: interaction; credit card terms; billing and payment; rewards; benefits and services; and problem resolution.
It found that customer awareness of earning and redeeming rewards with their credit card has declined year over year, with 59% of customers saying they “completely” understand how to earn rewards in 2013, compared with 66% in 2012. Furthermore, 33% of customers indicate they are unaware of the benefits associated with their card.
Amex has tipped the survey since it started seven years ago. It achieved a score of 816 (out of 1,000) and performed particularly well in rewards; benefits and services; and billing and payment. Discover followed with 812, performing well in credit card terms; interaction; and problem resolution. Chase was ranked third at 783.
The full list of customer satisfaction rankings is:
“Customers who use their card’s benefits spend an average of US$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. “While most customers change cards for a better rewards programme, they often don’t fully understand the rewards offered with their current card. There is a clear opportunity for issuers to better communicate rewards programs and benefits to not only keep customers loyal, but also to attract new customers.”
Fewer than one-half (47%) of credit card customers say they “completely” understand their credit card terms. Among these customers, 73% indicate a lack of clarity regarding interest rates, and 31% lack an understanding of late payment fees.
Despite low customer understanding of card benefits and terms, credit card satisfaction has improved for a fourth consecutive year. Overall satisfaction averages 767 on a 1,000-point scale, which is a 14-point improvement from 2012. The study also finds a lower incidence of interest rate increases, compared with 2012 (5% vs. 6%, respectively).
“The fact that the economy is improving and consumers generally feel better about their personal financial situations is certainly helping to improve satisfaction with credit card issuers, especially considering there was such instability in the industry just a few years ago,” said Miller.
When surveyed about their financial outlook compared to a year ago, 27% of credit card customers indicate they are better off in 2013, up from 23% in 2012 and 20% in 2011. Conversely, 17% indicate they are worse off, down from 23% in 2012 and 29% in 2011.
The study also finds that the percentage of credit card customers indicating they use mobile apps or text alerts to interact with their issuer has increased slightly from 2012 (5% vs. 4%, respectively), driven primarily by increased usage among customers in the Gen X and Gen Y segments.
Notably, credit card customers have been significantly slower to adopt mobile technology as an interaction method, compared with retail banking customers1 (5% vs. 19%, respectively). The slower adoption of mobile app technology among credit card customers may be related to a lack of desired functionality currently offered by credit card issuers. Mobile app features that provide the greatest lifts in satisfaction include viewing card benefits and features, redeeming rewards and receiving special promotions/offers. However, these offerings are currently available to less than one-fourth of credit card customers.
The 2013 Credit Card Satisfaction Study includes responses from more than 14,000 credit card customers and was fielded from May through June 2013.