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In 2012, Consumers Are Happier With Their Credit Cards

The past several years have been rough for consumers and credit card issuers. Prior to the Credit CARD Act of 2009, credit card issuers were cutting credit limits without notice, raising interest rates to the default, and charging consumers interest on balances that had already been paid. Fortunately, things are starting to settle and, according to a study from J.D. Power and Associates, consumers are more satisfied with their credit cards than they were six years ago.

The 2012 U.S. Credit Card Satisfaction Study measures how satisfied consumers are with their credit card terms, billing and payment process, interaction with the card issuer, rewards, benefits and services, and problem resolution. Close to 14,000 credit card users responded to the survey.

Increased satisfaction may be due in part, to the Credit CARD Act, which limits the instances card issuers can raise interest rates and requires more disclosure from card issuers. For example, card issuers can’t raise a fixed interest rate without giving a 45-day advance notice. They also can’t impose a penalty rate unless the cardholder is more than 60 days late on payment. Basically, consumers want stability with their credit cards.

Credit card billing statements include a wealth of information about late payments and penalties and well as what it takes to pay off a credit card balance. This information is undoubtedly empowering for consumers.

Of all the factors, consumers are most satisfied with problem resolution and rewards. Cardholders say it takes less time for card issuers to resolve their issuers. Many consumers say they had their problem solved the first time they contact their card issuer. In cases where credit card fraud was the problem, many cardholders were happy that their card issuer proactively helped resolve the issue.

The new Consumer Financial Protection Bureau may play a role in the improvement in problem resolution. Not necessarily because the bureau is directly involved in disputes, but their presence as a watchdog may keep credit card issuers in line.

Also on a positive note, more consumers are happy with their rewards problem. The majority of cardholders understand how to earn and redeem rewards. According to the study, cardholders also feel that the value of their rewards has increased since last year.

The study also ranks satisfaction with specific credit cards. American Express is the favorite credit card, as it has been for the past six years. Discover and Chase rank second and third.

At the bottom of the list are Bank of America, GE Capital Retail Bank, and HSBC. The study ranked a total of 11 credit cards.

The CFPB, who made credit card complaints public this year, receives more complaints about Capital One and Citi than any other card issuer. It’s surprising that these two aren’t at the bottom of the list. They rank 6th and 8th respectively, below the industry average

What’s also interesting about the rankings is that Amex and Discover, the top two, both issue their own credit cards and process their own transactions. The other issuers on the list are either Visa or MasterCard-branded cards.

If you’re looking for a new credit card, keep these rankings in mind. If you get one from Amex or Discover, you’re more likely to be happy with the card. However, a card from most other major credit card issuers (with the exception of Chase and Barclaycard) will probably leave you disappointed.

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Tuesday, 07 July 2020

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