Cash-Back Credit Cards Score Highest as Banks, Card Companies Wage Incentive War, J.D. Power Finds
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American Express Ranks Highest in Overall Customer Satisfaction among All Card Issuers
COSTA MESA, Calif.: 17 Aug. 2017 — A perfect storm of increasing interest rates, deeper credit card penetration and persistently strong consumer spending has ratcheted up competition and created a customer incentive war among banks and credit card companies. According to the J.D. Power 2017 Credit Card Satisfaction Study,SM one incentive driving the high levels of overall satisfaction among credit card customers is cash-back rewards.
“It’s a really good time to be a credit card customer. Overall satisfaction is up across the board, and growing numbers of card companies and regional banks are coming to the market with new products that offer rich sign-up bonuses, increased cash-back rewards and new benefits,” said Jim Miller, Senior Director of the Banking Practice at J.D. Power. “The key for issuers in this highly competitive marketplace is to develop strategies that increase customer satisfaction, which, in turn, decrease attrition and promote higher levels of credit card spend.”
Following are some of the key findings of the study:
- Cash (back) is king: Overall customer satisfaction with credit card issuers reaches its highest level in the history of the study (802 on a 1,000-point scale), but scores are highest for cards that provide cash-back rewards programs. By contrast, airline cards and store-branded Visa/MasterCard rewards credit cards have the lowest levels of satisfaction among rewards cards.
- Regional banks getting competitive with large Visa/MasterCard issuers: Regional banks are focused on increasing credit card penetration among their customer base. The number of active regional bank credit card accounts has increased 24% since Q4 of 2014. Additionally, satisfaction scores for regional banks are holding their own against larger national brands. On average, there is just a 10-point difference in overall satisfaction between regional bank card issuers and national Visa/MasterCard issuers.
- Digital channel plays key role: Credit card issuer websites and mobile offerings are playing an increasingly important role in cardholder satisfaction. When customers do not use either digital channel, satisfaction is only 780. Satisfaction rises to 807 when customers use online only and increases further to 827 among customers who use mobile only. Satisfaction is highest (834) when customers use a combination of online and mobile.
- Customer satisfaction diverging between older and younger customers: Although overall satisfaction scores are nearly identical among customers who are over 40 years old and those who are under 40, the trend line is diverging between the two age groups. Customers over 40 are becoming more satisfied, while satisfaction scores among customers under 40 are declining. Younger customers are more likely to spread spending across multiple cards and also indicate a greater propensity to switch their primary credit card. Among older customers who are likely to switch cards, the primary reason is for better rewards (44%), while younger customers are most likely to switch for better benefits (38%).
American Express (835) ranks highest in customer satisfaction with credit card issuers, followed by Discover (827) and Capital One (808).
The study, now in its 11th year, measures customer satisfaction with credit card issuers by examining six factors (in descending order of importance): interaction; credit card terms; billing and payment; rewards; benefits and services; and problem resolution.
The 2017 U.S. Credit Card Satisfaction Study includes responses from 22,896 credit card customers. The study was fielded from September 2016 through June 2017.
For more information about the 2017 U.S. Credit Card Satisfaction Study, visit http://www.jdpower.com/resource/us-credit-card-satisfaction-study.
J.D. Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable J.D. Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968, J.D. Power is headquartered in Costa Mesa, Calif., and has offices serving North/South America, Asia Pacific and Europe. J.D. Power is a portfolio company of XIO Group, a global alternative investments and private equity firm headquartered in London, and is led by its four founders: Athene Li, Joseph Pacini, Murphy Qiao and Carsten Geyer.
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