Sunday 20th of October 2019

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Consumer Satisfaction With Credit Cards Plummets

In reaction to higher fees and penalties and increasing interest rates, U.S. consumers have reported an increased dissatisfaction with their credit card companies, according to a poll conducted by J.D. Power and Associates. The result isn’t a surprise, given the struggling United States economy, rise in unemployment, and struggling banking industry.

According to the poll, approximately 20 percent of respondents said that the interest rates on their credit card accounts had risen since 2008. Similarly, the largest percentage of dissatisfied customers were those who are called “revolvers,” or people who keep balances on their accounts from month to month rather than paying them off with each statement.

In a similar pool conducted a year ago, 10 percent of respondents were unhappy about credit card fees. That number increased to 18 percent in this year’s poll. In fact, customer satisfaction, as rated by J.D. Power and Associates, fell to its lowest level since the poll began in 2007. For this year’s poll, approximately 9,000 consumers were contacted in May and June.

Reuters reported some industry surprise in consumer reaction. While it is anticipated to have some consumer dissatisfaction, particularly in an economic climate like ours now, and after the massive bailouts of Wall Street and other financial-services companies, the data showed widespread unhappiness across several different segments of consumers. This may be why so many consumers are looking to get online quotes for financial services, rather than work with other lenders. Analysts were surprised that consumer satisfaction with credit card companies was lower than other financial services such as banking, investing and insurance.

Consumer rights put in focus

But while the extent of the consumer unhappiness could be a surprise to business analysts, it’s probably not much of a shock to lawmakers or even the general public. In fact, outcries from the public to Washington for credit card reform resulted in some change in early 2009. Those laws are set to take effect starting in February, 2010. Among the reforms are:

  • Credit card companies can’t raise the annual percentage rate on an account in its first 12 months
  • Consumers are given the right to a 45-day notice of any changes in interest rates
  • Promotional interest rates must be in effect for at least six months
  • Consumers under age 18 are not to be extended credit, unless a parent/guardian approves it
  • Payments are to be credited to higher APRs first
  • Credit card companies cannot charge fees for making payments via phone or the Internet

Some areas of satisfaction

While the J.D. Power and Associates poll wasn’t full of glowing news for the credit card industry, there were areas with positive responses. American Express received the highest ratings from consumers, and was particularly singled out for its membership-rewards program. Discover came in second, and J.P. Morgan Chase received better-than-average responses. Citigroup, Bank of America and Capital One were rated as below-average.