Consumer Reports released its survey of 36,298 readers yesterday ranking the best and worst credit cards. Readers gave the highest rankings to credit cards from American Express, Discover and credit unions. Credit card issuers Bank of America, Capital One, Chase, Citi and HSBC all earned mediocre scores from consumers. These issuers of primarily Visa and MasterCard branded cards make up about 80 percent of credit cards issued.
The highest ranked card issuer was USAA Federal Savings Bank, receiving 95 points of 100. USAA‘s membership is limited to current and retired members of the military and their families. Navy Federal Credit Union and other credit unions ranked closely behind USAA‘s top ranking. Credit unions also have limited membership, but many have begun to loosen membership policies.
Credit cards from these issuers generally charge cardholders between 9 and 11 percent. Most cardholders don’t anticipate unexpected interest rate increases or interest rates higher than initially offered. Bill-timing problems where minimal because survey respondents felt they received their bills with enough time to make on-time payments and were not likely to be assessed late fees when sending their payments a week before the due date.
The two best-ranked retail credit cards were from Cabela’s and Nordstrom. These cards scored 88 and 85 respectively. Both issuers have an average interest rate of 14 percent and both are well known for having superior customer service. Cabela’s and Nordstrom promise 100 percent satisfaction on purchases and will accept returns or exchanges for any reason.
Respondents with credit cards from the top five largest issuers: Bank of America, Capital One, Chase, Citi and HSBC – all received scores of less than 80. A score of 80 in the survey would mean very satisfied. Most cardholders complained of being assessed unfair lates fees, unexpected rate increases, and below-average problem resolution.
The lowest ranked credit card issuers were Direct Merchants and Providian. Direct Merchants is a brand of HSBC and Providian is owned by Washington Mutual. These issuers generally charge 17 percent interest on their credit cards. Respondents said Providian was worst for unexpected interest rate increases, billing problems, and being assessed late fees even when payments were mailed a week before the due date.
When it comes to customer service, USAA again ranked in the top spot. Credit unions, American Express and Discover also all had favorable scores. Capital One and HSBC were both ranked below average and Providian received the lowest ranking for customer service. Customer service problems included unreasonable wait times, difficulty navigating automated voice systems, or having to make multiple calls or speak to several representatives. Twenty percent of the time the problem took too long to resolve or was never satisfactorily resolved. Overall, 27 percent of respondents reported a problems with getting help from a customer service representative.
If you are looking for a credit card offer, then stick with ones from American Express or Discover. Also, check with your local credit union or take of advantage of offers from USAA if you are current or retired military.
To search and apply for American Express, Discover and other credit card offers, visit our homepage.
