Americans have a love-hate relationship with this banking product



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If you’re not used to reading JD Power’s customer satisfaction surveys, you’re missing out on some interesting information. For example, according to the JD Power 2021 US Credit Card Satisfaction Study, many Americans are currently unhappy with their credit card satisfaction. credit card providers. We spoke with John Cabell, director of banking intelligence and payments at JD Power, to find out why.

Another side effect of COVID-19

As millions of Americans lost their jobs early last year, more and more people turned to credit cards to pay for essential daily expenses. For some, it was a shock to learn that their credit limits had been lowered just when they needed access to funds the most.

According to Cabell, only 2% of Americans experienced a reduction in their credit limit, but 2% of consumers felt deeply affected. “Cardholders relied more on their card as a borrowing tool, due to the economic situation,” he explained.

Cabell points to other potential reasons why consumers may have cooled their credit card issuers. He says the pandemic has caused a disruption in the market. Not only were some credit limits lowered, call center wait times were longer.

At the same time, credit card companies have taken advantage of the pandemic to raise interest rates for many customers. And, according to Cabell, consumers were paying more attention to their interest rates back then. It is reasonable to imagine that those who experienced a rate hike were frustrated.

Struggling to connect

At a time when people were under increased financial stress, some reported a lack of responsiveness from card companies. In other words, when cardholders needed them most, credit card issuers disappointed many who depended on them.

“While there are some bright spots this year among individual issuers, the pandemic has shattered a multi-year trend of improved satisfaction,” Cabell said. “The industry missed its mark in responding to the changing needs of customers as many faced significant financial challenges. “

One of the most interesting things about JD Power’s findings was how addicted Americans have become to credit cards – to the point of seeing them as a liferaft during a financial crisis.

While it’s clear that credit card issuers have had their own financial problems during the pandemic, they don’t seem to have given any thought to how cardholders will feel about them when COVID wanes. Time will tell if consumers are moving away from their cards to focus more on the other financial tools available to them, or emergency savings accounts big enough to carry them through the next crisis.

Here are some of JD Power’s other findings:

  • The reduction in credit limits has rubbed customers the wrong way. Only 2% of US credit card customers report a reduction in their credit limits. Among customers with a credit card from a medium-sized issuer, this number climbs to 3%. Unsurprisingly, these issuers experienced the biggest drop in customer satisfaction.
  • Consumers are less satisfied with credit card rewards. Despite additional opportunities to earn rewards through activities like grocery shopping and take out, satisfaction is declining.
  • Co-branded cards are the big winners in the rewards category. A co-branded card associates a network of cards (such as Mastercard or Visa) with a company. Many retail stores offer co-branded cards.

According to Cabell, some consumers may be upset because they have the wrong credit card. For example, if a non-traveler offers a rewards card air miles, they naturally tend to be less satisfied than a frequent traveler who can use the miles. People can help themselves by regularly reviewing their credit cards for value for their money and choosing cards that reward them with the things they need and want.

A snapshot in time

So this is it? Will Americans continue to feel less affectionate about their credit cards, or is there something credit card issuers can do? Cabell reminds us that customer satisfaction can change from quarter to quarter. This is simply a snapshot in time.

While waiting to see what cardholders think about their credit cards the next time they’re surveyed, credit issuers might want to take a page from Goldman Sachs, Apple’s card issuer and midsize issuer. highest ranked in the JD Power study. According to reviews, Goldman Sachs has learned that offering good service and rewards that cardholders will use makes people happy. And happy customers are good for business.

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