It's not exactly love, but American consumers appear to be developing growing affection for -- or maybe it's just growing toleration of -- their credit card companies, according to a comprehensive survey released Thursday.
For the third year in a row, J.D. Power and Associates found that credit card users are becoming increasingly satisfied with the way they are treated by most card issuers. Overall satisfaction averages 753 on a 1,000-point scale, an increase of 22 points over last year, 39 points over the result in 2010 and 48 points over the 2009 findings.
The latest score represents the highest credit card customer satisfaction since J.D. Power began conducting the survey six years ago. Every credit card issuer, even those lagging at the bottom of the list, registered some improvement in customer satisfaction over 2011.
"This is great news for the users of credit cards," said Jim Miller, senior director of banking services at J.D. Power and Associates. "For customers in general, their experiences clearly are improving."
He and other survey specialists attributed the positive trend to a growing sense of stability throughout the overall financial system, but particularly when it comes to credit card fees, credit limits, credit terms and the like.
"A lot of the changes we were seeing in the industry are now two or more years old," Miller said. "Actually, we are seeing these improvements show up more in the credit card industry than in the rest of the banking system."
As in the past, the survey evaluated these six factors: customer service, credit card terms, billing and payment systems, rewards, problem resolution, and benefits and services. The credit card industry registered improvements in all six of the categories.
Some notable examples:
- An impressive 31-percentage point improvement in problem resolution -- a major source of customer discontent in the past. The average amount of time required to resolve a problem fell to four days this year from five days in 2011. Moreover, a solid 61% of the respondents had their problems resolved during their first contact with their card company. The increase in problem resolution coincided with the first year that a new, national credit card complaint system has been offered by the new federal Consumer Financial Protection Bureau.
- A nearly-as-impressive 28-point improvement in customer satisfaction with credit card rewards programs.
- Only 11% of the surveyed customers reported experiencing a problem of any kind with their credit card issuer, a 7-point decrease from 2009.
When all of that is combined with a period of relative calm -- including stability in interest rates and other financial aspects of credit cards -- customers respond affirmatively. That applies to both major types of customers -- people called "revolvers," who don't pay their full balances every month, making them sensitive to interest rate increases, and people called "transacters," who do pay their full balances every month and have a special interest in rewards programs.
"When it comes to stability, when rewards aren't being taken away from you and interest rates aren't going up, people become more accustomed to what they're seeing and they're more satisfied with the results," Miller said.
In addition to an enhanced sense of economic stability (even as the nation still struggles to recover from the Great Recession), the relatively new consumer protections required by the federal Credit CARD Act of 2009 certainly didn't hurt the results. The J.D. Power study involved responses from 13,725 credit card customers and was conducted in June 2012.
"The advantages of the CARD Act certainly are a factor, along with the competitive nature of the business, which is driving issuers to become more customer focused," Miller said. "It's the combination of the two that is coming into play."
American Express, Discover lead
Looking at the major issuers, at the top of the heap this year, as they consistently are: American Express (with a score of 807) and Discover (799). Those two companies have held the same top two slots since the first year of the survey.
American Express' results were noteworthy for high marks in customer service and the company's rewards program; Discover scored particularly well in the areas of problem resolution, customer service and rewards.
"They're both very strong, even this year when the industry average has increased and every company in the study saw some increase," Miller noted. "American Express and Discover are particularly strong in communicating with their customers, whether that be in helping them understand the rewards programs or helping them understand the benefits that come with the cards."
American Express representative expressed their own satisfaction over the results.
"While our goal is to satisfy our customers, and not to get awards, we are thrilled to have received this terrific recognition every year since 2007," said Kenneth I. Chenault, the company's chairman and chief executive officer. "Hearing that we scored the highest in customer satisfaction directly from consumers through an independent and prestigious source like J.D. Power is very gratifying."
A spokesman for Discover declined to comment until the company could fully study the survey.
At the bottom of the pack, as in the recent past, was HSBC (703 out of 1,000 points), which announced last year that it was selling virtually its entire U.S. credit card portfolio to Capital One. Capital One (734 points) finished in eighth place in the 11-company survey.
As was the case last year, Bank of America finished in ninth place, this time with a score of 728 points. One of the nation's largest issuers of credit cards, Bank of America had no immediate comment regarding the survey.
Of course, despite the advances, some credit card customers obviously experience problems.
About 1 in 4 of those problems involved the stubborn and aggravating problem of credit card fraud, according to the survey. Now, the good news: more than half of those customers were contacted by their credit card issuer before they realized they had been victimized.
"Credit card companies are very proactive in detecting credit card fraud and protecting their customers," Miller said. "In fact, when their credit card company detects fraud, it actually improves customer satisfaction. It's still disruptive to the customer, but the customer appreciates that their card company is looking out for their best interests."
Overall, he said, the survey's message to credit card customers was clear.
"They can expect to find an issuer who can meet their needs and provide them with the product and service that they expect," Miller said. "And if they are not getting that where they are doing business, this shows that there are places they can go and be very satisfied with their credit cards."