J.D. Power finds credit card satisfaction on the rise

Written by Geoff Williams
Posted On: September 1, 2011

A new survey from J.D. Power and Associates has come out, showing that for the second year in a row, more Americans are happier with their credit cards.

Out of a 1,000 point scale, customer satisfaction is currently 731. Two years ago, it was 705. It crept up to 714 in 2010 and is obviously a little more substantial now. And what I can't help but find amusing is that the reason for the satisfaction may be due to the Credit CARD Act, something that credit card companies fought against and collectively seemed to hate.

Three cheers for the Credit CARD Act

In a press release, Michael Beird, director of banking services at J.D. Power and Associates, said, "It appears that credit card companies are doing a better job of communicating with customers, which may be an effect of the CARD Act. This improved communication is key to ensuring that customers fully understand their credit card terms, particularly benefits and fees, which helps reduce the number of problems reported and improves the overall experience."

For instance, as any credit card user knows, your statement makes it much more clear how much in interest you'll pay overtime if you only pay the minimum monthly payment versus if you pay considerably more.

It always baffled me a little why credit card companies didn't seem to recognize that the Credit CARD Act might end up benefiting them as well. Sure, a lot of money can be gained by not being transparent, but happier customers presumably use your products more, which, of course, brings up profits.

How individual credit cards did

In any case, it's nice to see some good news in the credit card industry after plenty of lackluster news throughout the last few years. And according to the survey, American Express has the best news. They rank the highest in customer satisfaction for the fifth year in a row (the survey has been conducted for five years now) with a score of 786.

Discover is close behind with a 779, and Barclaycard has 739. Chase was just a few points behind with 735. And for anyone wondering, at the bottom in customer satisfaction is HSBC. It received a 689. Ouch.

Certainly, there's plenty of room for credit cards to continue improving, but there seems to be little doubt that there has been progress. For instance, last year, 14 percent of credit card consumers reported problems with their credit cards; this year, it was 11 percent in the survey.

Credit card companies were also able to resolve dilemmas more quickly this year than last (on average it took 5.8 days for a problem to be resolved in 2010; this year, 4.9 days) with fewer customer service reps having to get on the phone (an average of 2.2 in 2010, and 1.8 in 2011).

Let the bragging begin…

Naturally, American Express wasted no time in getting out their own press release lauding this brilliant survey whereas, oddly, I haven't seen any press releases from HSBC yet.

AmEx didn't mention the CARD Act, instead chalking up the customer satisfaction to their expanding benefits, services and rewards to their card holders, including offering a $200 airline fee credit, eliminating the foreign transaction fees for Platinum Card members and offering perks like access to more than 600 airport lounges through Priority Pass select for Platinum Cardmembers.

American Express also stated that their updated offerings like the Blue Sky Preferred Card, which gives cardholders a $100 airline allowance to cover things like checked bags and in-flight meals, had something to do with their high customer service rankings.

OK, could be, but I still think Beird is right, that overall customer satisfaction is up due to the Credit CARD Act. But, hey, the extra rewards don't hurt.