Credit Card Holder Satisfaction Sinks During Pandemic, Survey Finds
J.D. Power finds customers want more proactive communication from card issuers
People are now less confident in the companies that issue their credit cards as the pandemic and economic uncertainty persist, according to the latest J.D. Power U.S. Credit Card Satisfaction Study.
Unsurprisingly, cardholders who have been financially impacted by COVID-19 report they are less satisfied with their card issuers than those who have not suffered financially. Banks have been offering a variety of financial relief options and other benefits for cardholders struggling during the ongoing pandemic, but this new report shows it may not be enough.
- Overall credit card customer satisfaction fell during the pandemic, but the current score is still higher than the 2019 average rating, thanks to high customer satisfaction scores pre-pandemic. The survey was completed in “waves” and several had been completed before the pandemic struck.
- Card issuer communication is lagging: Only 36% of cardholders say they’ve been proactively contacted by their card issuer in the past year, compared to 60% of mortgage and 48% of retail banking customers.
- J.D. Power has been tracking customer satisfaction across several financial services (such as banking and mortgages), and credit card issuers are the only segment now viewed less favorably.
- Despite the gloomy sentiment shift, 89% of credit card holders said their current card meets their needs and they don’t plan on switching issuers—yet.
The annual study measures credit card customer satisfaction in six areas: interaction, credit card terms, communication, benefits and services, rewards, and key moments. The 2020 study includes survey responses from 29,106 cardholders gathered in four waves from September 2019 through June 2020. J.D. Power combines customer responses to create a numerical score (out of 1,000 possible points) to represent overall satisfaction with each card issuer.
Credit card customer satisfaction ratings were on track to break records before the pandemic slammed the U.S. in March. J.D. Power began to note steep declines in positive survey responses, especially in May. Along with credit card holders who were struggling financially, the satisfaction ratings also dropped significantly during the pandemic among people with stable finances.
“Affluent customers tend to use a greater number of cards and spend more per month with their cards, so consequently have more invested into their card experience,” said John Cabell, director of banking and payments intelligence for J.D. Power in an email to The Balance. “Those who have been impacted financially by the pandemic are also more likely to be interacting with their issuer because of changes to their personal finances. During recent months, these higher exposure customers are more likely to reflect a change in satisfaction, trust, and brand opinion.”
American Express Bumps Discover Out of No. 1 Spot
American Express received the highest customer satisfaction rating (838, unchanged from 2019) among national card issuers this year, followed by Discover (837, down from 842 in 2019). Bank of America is now on the podium, ranking third with a score of 812, up from 798 last year. The average customer satisfaction score among national card issuers is 810.
Regions Bank Tops Regional Issuer Rankings
Among regional banks, Regions Bank is viewed most favorably by cardholders and topped the 2020 list with a score of 816. BB&T and PNC Bank tied for second place with a score of 815. For perspective, the average customer satisfaction score among regional banks is 813.
Next Steps for Credit Card Issuers
Since an end to the pandemic and its economic turmoil is not yet in sight, it’s on credit card issuers to restore consumer trust, especially if they want to maintain a loyal customer base in the long run.
According to J.D. Power’s Cabell, there are three things card issuers can do to help consumers through this uneasy time: communicate quickly and frequently about the topics consumers care about most (interest rates, credit limits, and benefits), adapt to consumer spending patterns, and improve digital communication options to help consumers solve problems fast.
Consumer advocacy organizations, such as the United States Public Interest Research Group (U.S. PIRG), are also calling on card issuers to step up to the plate for the sake of consumers’ financial wellbeing.
When the pandemic first started, regulators advised banks to work closely with struggling consumers, but additional help is not mandatory. Credit card complaints filed with the Consumer Financial Protection Bureau (CFPB) since March 1 have risen substantially, indicating there is more work to be done by banks.
“The banks are saying they are working with everybody, but it does not seem to be the case based on the number of complaints received by the CFPB,” Senior Director for Federal Consumer Programs for U.S. PIRG Ed Mierzwinski told The Balance in a phone interview. “We have found that complaints have set a record each month during the pandemic. Credit card complaints are among the leaders, right behind complaints about credit reports, bureaus and debt collectors. People are unhappy.”
If you are struggling to make credit card payments during the pandemic, reach out to your card issuer. The Balance has found many major banks are still advertising relief options such as deferred payments and waived late fees. Financial assistance may be available even if you received help earlier this year, too. If you need help, it doesn’t hurt to ask.
J.D. Power. "Customers Losing Faith in Credit Card Issuers as COVID-19 Pandemic Lingers, J.D. Power Finds." Accessed Aug. 20, 2020.
J.D. Power. "Frequently Asked Questions." Accessed Aug. 20, 2020.