How Does Your Credit Card Stack Up Among the Rest?

Do you ever wonder if dealing with another credit card issuer might be more pleasant? Thanks to J.D. Power and Associates and its 2008 Credit Card Satisfaction Study, you can find out how your lender compares to other card issuers ... and make your decision accordingly. For the second year in a row, the same people we go to for customer service ratings before we buy a car have turned their attention to the purveyors of plastic. By examining responses from 7,665 credit card users, they've measured how cardholders feel about:

• Their interactions with lenders
• The billing and payment process
• Fees and rates
• Reward programs
• Other benefits and services

The Results Are Striking
Just like last year, American Express and Discover are the clear winners – and the only two issuers to score above the industry average, based on the 1,000-point satisfaction scale that J. D. Power and Associates (JDP&A) created to analyze the findings. American Express ranks highest, with a score of 783, Discover Card is in second place, with a score of 751, and the industry average is 724. The two card issuers with the worst ratings are Capital One, at 678 and HSBC, at  667. Click here to see how your lender scored.

“Amex’s customers are generally what the industry calls ‘transactors’ – customers who pay off their bills in full every month,” reports JDP&A. “Nearly 8 out of ten transactors select their card because of the value they feel they get from its rewards programs, with interest rates of little importance because of their purchasing style.”

That makes perfect sense, although all transactors might as well benefit from reward or cash-back cards. Certainly, if you don’t carry a balance, pick and choose your credit card based on the perks that best suit your pleasure.

Discover cardholders are primarily “revolvers,” according to JDP&A, people who carry a balance from month to month. “For 65% of this type of purchaser, low interest rates and fees are the driving force behind their choice of card. Discover Card has found success by offering its cardholders simplicity, with easy reward redemption, a particularly low incidence of reported problems and no annual fees.”

Are You a Revolver?
If you’re a revolver, I urge you to use a card with the lowest interest rate you can get. No matter how tempting a reward or rebate sounds in some lender’s sales pitch, it can’t make up for the effect of a higher rate. Ignore the ads for reward cards, get the lowest rate you can, and pay off what you owe. When you’ve caught up, if you know you can trust yourself not to carry a balance in the future, go get your rewards!

Need extra motivation? Given how keen the competition is between lenders, there's one set of JDP&A findings that leads me to issuers wil soon be making it easier to take advantage of reward programs: “Customer satisfaction improves with use of rewards, therefore it is critical for credit card issuers to ensure that cardholders are taking advantage of these programs,” says Rocky Clancy, executive director of financial services at J.D. Power and Associates. “Making the reward redemption process as easy as possible by removing limits - such as point expiration dates or restrictions on use - encourages use of reward programs, thus enhancing overall satisfaction.”

I love the idea that customer satisfaction with credit cards is now being tracked and discussed. It's bound to make issuers take notice! So let's keep the discussion going. Do the JDP&A findings jibe with your own satisfaction level with your card issuer? Please let us know why ... or why not. Are you going to try to get a card with a better customer rating? Here's hoping your answer is YES!

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 24 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.

Comments

[Joe Morgen]

I tend to be a revolver. So I try to find cards with fixed rates.
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