Credit card issuers struggle to meet changing customer expectations
Credit card providers are failing to meet the needs of many of their customers in the wake of the Covid-19 pandemic, new research finds.
The 2021 U.S. Credit Card Satisfaction Study from consumer research firm JD Power found that midsize credit card issuers reported a larger drop in customer satisfaction compared to their counterparts. larger nationals.
The report says the drop in satisfaction is due to increased financial stress, unresponsive providers, and misaligned terms and rewards. This combination created a “Recipe” for declining customer satisfaction with credit card issuers, said JD Power.
Average customer satisfaction with domestic credit card issuers has increased from 811 on a scale of 1,000 in 2020 to 805 this year. Customer satisfaction for mid-sized issuers fell 17 points to 796.
American Express was the highest rated issuer with a score of 838, followed by Discover with a score of 837. Goldman Sachs, the Apple card issuer was the highest rated average size with a score of 864, followed by PNC , BB&T (now Truist Bank) and Huntington, each with a score of 817.
The reduction in credit card limits has also affected customer satisfaction, with 2% of U.S. customers with a credit card reporting that their credit limits have been reduced. Among medium-sized customers, this number rose to 3%.
On average, satisfaction scores were 141 points lower among customers who said they had a problem with their credit limits, compared to those who said they didn’t.
“While there are some bright spots this year among individual issuers, the pandemic has really shattered a multi-year trend of improved satisfaction,” said John Cabell of JD Power.
Whether it was through brutal actions, such as tightening credit limits at a time when customers were most relying on their cards as a source of short-term funding, or through the lack of accessibility of customer service, issuers of credit cards have seen a decline in overall satisfaction. “
Fintech companies are setting higher standards across the industry, the JD Power survey showed. A third (33%) of cardholders in 2021 used mobile payment services with their card. The level of satisfaction of these carriers is 39 points higher than the national average.
A separate research study from JD Power recently found that retail buyers tended to opt for “buy now, pay later” offers over credit cards to avoid high interest rates and revolving debt. Kaleido research predicts that this form of credit will reach over 12% of total global e-commerce spending on physical goods by 2025.