In the Market for a New Credit Card? New Information Will Make It Easier to Choose

J.D. Power and Associates, the same people we turn to for customer service ratings before we buy a car, just ranked credit card issuers for the first time. Based on a survey of 7,812 credit card cardholders, their “2007 Credit Card Satisfaction Study” puts American Express in first place for customer satisfaction. Discover came in a close second.

Questions were asked about how lenders handle the following:

• Benefits and features
• Rewards
• Billing and payment process
• Fees and rates
• Problem resolution

American Express, which got high marks in benefits and features as well as in problem resolution, got a score of 735 on the 1,000-point satisfaction scale J. D. Power and Associates created to analyze the findings. Discover, at 728 points, did best in rewards as well as billing and payment.

Overall, the ten card issuers in the study got a score of 658, which is much lower than the customer satisfaction scores in other financial areas: mortgage servicing (798), online investing (773) and retail banking (763). That’s not surprising to me, given all the fine print and fees card issuers hit us with, to say nothing of the way they jack up the already high interest rates.

Click here to see how your credit card company made out.

Choosing a Credit Card
Another set of findings had to do with card selection. According to J. D. Power and Associates, “rewards are key in credit card selection across the industry, and 80 percent of card holders receive some type of reward with their credit card usage.”

The survey showed that almost 65% of people who say they always or usually pay the full balance due on their credit cards – named “transactors” by J. D. Power – think that rewards programs are most important. So do 29% of “revolvers,” those who carry a balance. I sure hope you’re not in that 29%!

Tip for revolvers: What should be most important to you is a card with a low rate. Whatever the reward, it can’t make up for the effect of a higher rate, especially one that is compounded month after month. Ignore all the ads for rewards cards, and get the lowest rate you can.

Now that they’ve begun to be available, I’m sure going to take a look at the customer satisfaction rankings before applying for a new card. I encourage you to do likewise. All other things being equal – and with so many choices out there – why not choose a company that has a better track record? Over time, I expect that the rankings will get as complex as the ones issued for cars, which will only make our card choices that much clearer.

Sounds like good news to me. What do you think?

Nancy Castleman – Co-author of "Invest in Yourself: Six Secrets to a Rich Life" and founder of Good Advice Press. Nancy has spent the last 23 years teaching people how to get out of debt, save money, and live better on less. She writes on all these subjects for CreditBloggers.com.