JD Powers and Associates, a highly respected global marketing information services with a solid reputation for over 40 years of business, released results of its 2011 US Credit Card Satisfaction Study℠ showing that American Express® ranks highest of the top 10 US credit cards when it comes to customer satisfaction. American Express has taken top honors all five years the survey has been conducted.
Conducted in May and June 2011, and with over 8,700 responses from credit card customers, the survey ranks the top 10 US credit cards in six key areas.
- Interaction
- Credit Card Terms
- Billing and Payment Process
- Rewards
- Benefits and Services
- Problem Resolution
Results are tabulated on a 1,000 point scale and indicate that overall customer satisfaction with credit card companies is up 17 points from 2010 to 731. The JD Power study indicates increased customer satisfaction was recorded with both customers who typically pay off their credit card balances each month as well as those who take advantage of the revolving credit and maintain an ongoing balance.
The survey showed gains in all six areas measured, but the increase in customer satisfaction in problem resolution was most notable. Customers reported fewer problems in 2011 (down 3%), faster resolution of any problems reported, and fewer contacts with the credit card company in order to resolve the problems.
Although many factors could contribute to the increase in overall customer satisfaction, the JD Power’s survey press release speculates one possibility is there has been a decline in credit card interest rate increases over the last year. In addition, there has been a corresponding decrease in the reports of credit card dissatisfaction based on increased interest rates.
Another factor boosting 2011 credit card ratings is an apparent attempt by credit card issuers to communicate more clearly with their customers. The number of people indicating they understand their credit card terms is up 3% from last year.
“It appears that credit card companies are doing a better job of communicating with customers, which may be an effect of the CARD Act,” said Michael Beird, director of banking services at JD Power and Associates. “This improved communication is key to ensuring that customers fully understand their credit card terms—particularly benefits and fees—which helps reduce the number of problems reported and improves the overall experience.”
It seems significant that on a 5 star ranking system, the only two cards to achieve a 5 star overall satisfaction ranking were American Express and Discover Card. The rest of the playing field ranked average (3 stars) or below on overall satisfaction. American Express scored 786 on the 1,000 point scale, up 17 from last year, and Discover Card was a close second, scoring 779. The next closest card scored 40 points lower.
American Express consistently outranks competitors especially in areas of benefits and services, credit card terms, and rewards. JD Powers and Associates notes the increase in overall customer satisfaction with all cards, credit card companies appear to be making efforts to level the playing field. Striving to level the playing field is definitely tied to the increased competition to gain new cardholders that JD Powers also noted for 2011, making it more important for consumers to educate themselves on credit card terms and services and to evaluate their personal needs before shopping for a new credit card.
Click here for the full results of the survey.
For those headline readers who are interested in the bottom line, the short answer to the question is American Express.
If you want an explanation as to who says American Express is the best credit card service provider or why American Express can claim to be the best at providing credit card services, read on.
According to a 2010 study just released by JD Power and Associates, consumers have given American Express the highest customer satisfaction ratings of the nation’s top 10 credit card issuers. American Express not only rated highest in in customer satisfaction in the 2010 study, the company also took top honors each year since the study’s inception in 2007.
JD Power and Associates, a global marketing information service that has been in business over 40 years and is probably most well-known for their customer satisfaction reports on new car quality, conducts research on six key areas of credit card customer satisfaction: interaction; credit card terms; billing and payment process; benefits and services; rewards; and problem resolution. The data gathered is then put through a mathematical formula which weights each of the key areas according to importance. The final result for each of the 10 companies will be a numerical value on a 1000 point scale.
Outstripping competitors significantly, American Express scored 769 in overall satisfaction. Discover Card ranked second with a score of 758. US Bank came in a distant third with an overall satisfaction score of 727. Not only is it significant that the American Express Company earned the JD Power Highest Customer Satisfaction Award, but the company’s score was a whopping 55 points above the customer satisfaction average score of 714.
Another item of note is that the average customer satisfaction score has risen from 703 points recorded in the 2009 report. On one hand, 11 points seems somewhat negligible. However, school teachers have repeatedly pointed out to struggling students that it is much more difficult to bring up a low grade than to maintain a high score from the outset. The overall customer satisfaction score in 2009 was the lowest in three years. Perhaps the increased average over last year is another minor indicator that the economy and the public’s trust in the economy is, like the media has recently begun to state, beginning to recover.
From the outset of the study in 2007, American Express has consistently maintained high performance scores in benefits and services. Past reports on the study have also singled out consumer satisfaction with American Express problem resolution. High scores in both billing and payment and in rewards have been highlighted in previous years’ reports. The 2010 JD Power and Associates report simply states American Express “performs well across all six factors that drive satisfaction.”
Two of the most talked about factors driving customer satisfaction seem to be a card’s rewards program or a card’s low interest rates or lack of annual fees. The importance of each of those factors is usually determined by whether or not the card holder carries a monthly balance. People who pay their card balance off each month generally seek a card offering an attractive rewards program while people who maintain a balance from month to month generally place an emphasis on finding a credit card issuer offering low interest rates and no annual fees.
Since the study was begun in 2007, two factors consistently influencing lower consumer satisfaction scores are an increase in interest rates or fees and a lack of clear communication on the part of the card issuer, specifically in relation to credit card terms. Because of legislation that went into effect in Feb. 2010 (the CARD Act), many credit card companies have made huge efforts to help consumers more clearly understand their credit card terms. The JD Power and Associates report indicates that although progress has been made, many consumers still feel they do not fully understand the credit card terms, and some of those consumers do not believe the card issuers are concerned with what is in the customer’s best interest.
In an economy that, over the past three years, has seen an extreme down turn in the housing market, multiple bank failures, and government bailouts of huge corporations, the good news is, along with an increase in the average of overall customer satisfaction, consumers generally believe that their card issuers are financially stable and reliable.
Source: JD Power and Associates
Last week, J.D. Power and Associates released their 2009 Credit Card Satisfaction Study with results of what customers really think about credit card issuers. The results weren’t surprising as most customers this past year have seen rate increases, fee increases, credit lines slashed or accounts closed completely. As a result of the economy, credit card issuers have been forced to cover rising defaults and losses. Customers haven’t responded well to the recent changes and credit card issuers have seen their customer satisfaction ratings plummet.
In fact, the J.D. Power and Associates survey found that the customer satisfaction level has reached a three-year low. Michael Beird, J.D. Power and Associate’s director of banking, said, “Overall satisfaction declines 86 index points when a customer incurs a late fee. Issues with fees also contribute to the high incidence of problems and complaints in 2009, with 18 percent of customers reporting problems, compared with 10 percent in 2008.”
In 2008, only 10 percent of customers reported that their fees and rates were increased. That number has almost doubled in one short year. That’s right…20 percent of credit card customers now say that they have seen an increase in credit card fees and rates. But, does the type of customer affect satisfaction?
Absolutely.
The survey found that those who are among the unhappiest are those credit card holders who do not pay off their credit cards in full each month. Credit card customers who carry a balance from month to month gave credit card companies the lowest ratings. American Express ranked highest in customer satisfaction for the third straight year with an index score of 761. Discover Card and National City came in second and third with index scores of 751 and 740, respectively.
So, what have these companies all done well? Customers reported being satisfied with credit card companies when they received consistent communication from the creditor. Even when a fee or rate increase did occur, customers reported being satisfied 97 percent of the time when they received notification of the increase beforehand.
Although customers are not overly satisfied with credit card companies currently, there is one thing credit card issuers can do to keep customers happy. Communicate. Credit card companies need to keep their customers informed and customers need to do their part by staying informed. Customers can actively participate in the communication process by researching different credit cards and educating themselves before applying.
Surely, the level of overall credit card satisfaction will increase when well-informed customers team up with credit card companies who communicate.
Have you had a good or bad experience with your credit card issuer this past year? Give us your feedback.
For me personally, the answer to that question is a resounding yes! Customer service isn’t just about talking with someone on the phone or at a counter and having them answer my question or conduct a transaction for me. It’s more about my overall impression of the entire experience; the atmosphere, the goods or services and the way I was treated makes the complete package, not just some salesperson sucking up to me to get a sale. I understand that not every person at every company has the capacity to perfrom at such a standard every time, but there are a few companies out there who just seem to get it right while others can’t.
Take for example two credit card companies – USAA and American Express. Both companies have received the highest rankings for customer satisfaction, one from Consumer Reports and the other from JD Power and Associates. Is this a coincidence that I have accounts with both of these companies? Not exactly. USAA is more by coincidence for me, but without surprise, while American Express is solely by choice. My experience with both of these companies has been excellent and it is no surprise to me that either of these companies receive high ratings from other customers and ultimately from organizations like Consumer Reports and JD Power and Associates. Using a credit card from American Express does come at some cost, but I knew that before I became a customer. To me that additional cost or slight inconvenience is more than worth it.
Just like you I’ve also had bad customer service experiences too. For many years I used cellular services provided by Sprint because I was getting a “great deal” (price) on my monthly bill. However, anytime I had a problems with my phone or service, I had to go to a Sprint store where I expected to leave there completely frustrated with my blood near its boiling point. Sure the reps were nice for the most part, but no one could ever seem to really help me or fix my problem. Why I stayed with them for so many years, I don’t know, but I now recognize the money I saved on my monthly bill was not worth it at all. When the opportunity to switch to a different provider presented itself, I did so without hesitation. The money I saved resulted in a lot of frustration and an overall bad customer service experience.
So I beg the question, does customer service influence where you shop or which companies you use? For me the answer is clear, I would rather pay more, sometimes a lot more, to have customer service experiences like those I’ve had with USAA and American Express. Leave us your comments and feedback.
And the award goes to…American Express – again. American Express prides itself on its outstanding customer service. According to a nationwide survey conducted by J.D. Power and Associates, American Express ranked the highest of all the credit card companies in customer service. This is, in fact, the second year that customers have rated them highest in customer service.
The J.D. Power and Associate study carefully measures each credit card company in five key areas. The five factors are: interaction, billing and payment processes, fees and rates, reward programs, and benefits and services. As you can see, the study really encompasses every factor of credit cards. The study is based on a 1000 point scale and relies on real customers’ answers. American Express scored 783 points. Discover Card came in second with a total of 751 points.
American Express performed well in every category. American Express got the highest score out of any of the other credit card companies in all of the five categories. Discover performed well in the interaction, billing and payment processes, and reward program sections. According to the executive director of financial services at J.D. Power and Associates Rocky Clancy, American Express and Discover both offer a variety of services and benefits to a wide variety of customers. He said, “American Express and Discover Card are very different in their fees, reward programs and incentives, and their strong performances indicate their ability to suit the various needs that dissimilar types of cardholders have.”
The study also showed that people who pay off their balances every month (also known as transactors) tend to choose their credit cards by rewards programs 77 percent of the time. People who carry balances on their credit cards (also known as revolvers) look for low interest rates and low fees when choosing their credit cards 65 percent of the time. American Express has really honed in on these credit card trends. This is why they offer a wide variety of services and perform so well on this customer service satisfaction study.
J.D. Power and Associates also compared the use of cash back credit programs and reward programs. They found that 72 percent of all credit cardholders use some kind of reward program. Cash back programs were found to be the most common type of reward program. Customers also reported that getting cash back is the second most satisfying type of reward program. Any idea what the most satisfying reward program is? Customers who participated in the study said that getting free hotel stays is the most satisfying type of reward.
Customers who took advantage of reward programs tended to be more satisfied with the credit card provider than those who didn’t. Customers want to be rewarded for using credit cards. They want the redemption process to be as easy and quick as possible. This is another reason why American Express scored so high in their overall customer service ratings.
The 2008 Credit Card Satisfaction Study examined the spending habits of 7,665 credit cardholders. They carefully asked these credit card users to rate their credit card company based on five key factors. American Express took the lead in overall customer service satisfaction for the second year in a row. American Express has found the key in making their customers happy and giving them the opportunity to let their credit cards work for them.
