Fewer than two-thirds of American consumers fully understand the perks and benefits associated with their current credit cards, according to a study by consumer satisfaction researchers at J.D. Power. The agency's seventh annual U.S. Credit Card Satisfaction Study revealed improvements in customer service during a period when fewer Americans might have reasons to request late fee waivers or credit limit extensions.
Just 59 percent of survey respondents said they "completely" understood how to earn and redeem points with their rewards credit cards. Researchers found that those cardholders typically spent about $400 more with their accounts, compared to the 33 percent of respondents who reported being unaware of their cards' rewards.
That lack of awareness could sap the value of some rewards points balances, especially among the 31 percent of survey respondents who indicated they didn't know their lenders' policies about late payment penalties. Although revisions to federal banking regulations eased many bank policies regarding late fees and penalty APRs, the same rules don't apply to rebates from cash back credit cards or balances of rewards credit card. Many cardholders forfeit unused rewards balances when closing an account, or after missing multiple minimum payments.
In a written statement, Jim Miller, senior director of banking services at J.D. Power, urged credit card issuers to preserve customer relationships through consumer education.
"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," Miller said.
Miller's associates also recorded the fourth consecutive annual increase in the index J.D. Power uses to track trends in overall credit card satisfaction. American Express, Discover, and Chase all beat the index's industry average score. Researchers cited the increased use of mobile banking applications and growing optimism about the economy as reasons for improved relationships between banks and cardholders.