Credit Card Issuers Struggle to Meet Evolving Customer Expectations

Credit card providers are failing to meet the needs of many of their customers in the wake of the Covid-19 pandemic, according to new research.

Consumer research company JD Power’s 2021 US Credit Card Satisfaction Study found that midsize credit card issuers reported a greater drop in customer satisfaction compared to their larger national counterparts.

The report said that the drop in satisfaction stemmed from increased financial stress, lack of responsiveness from providers, and misaligned terms and rewards. This combination created a “recipe” for declining customer satisfaction with credit card issuers, JD Power said.

The average customer satisfaction with national credit card issuers decreased from 811 on a scale of 1,000 in 2020, to 805 this year. Customer satisfaction for midsize issuers declined by 17 points to 796.

American Express was the highest-ranked issuer with a score of 838, followed by Discover with a score of 837. Goldman Sachs, issuer of the Apple Card was the top-rated midsize with a score of 864, followed by PNC, BB&T (now Truist Bank), and Huntington, each with a score of 817.

Reduced credit card limits have also affected customer satisfaction, with 2% of US credit card customers reporting that their credit limits have been reduced. Among midsize customers, this number increased to 3%.

On average, satisfaction scores were 141 points lower among customers that said they had an issue with credit limits, compared to those with that said they had no such issue.

“While there are some bright spots this year among individual issuers, the pandemic really broke a multi-year trend of improving satisfaction,” said JD Power’s John Cabell.

“Whether through blunt actions, such as tightening credit limits at the very moment when customers were most reliant on their cards as a source of short-term funding, or through lack of customer service accessibility, credit card issuers experienced declines in overall satisfaction.”

Fintech firms are setting stronger standards across the industry, JD Power’s survey showed. One third (33%) of cardholders in 2021 were using mobile payment services with their cards. The satisfaction level for these cardholders was 39 points higher than the national average.

A separate JD Power research survey recently found that retail shoppers tended to opt for ‘buy now, pay later’ offers over credit cards to avoid high interest rates and revolving debt. Research from Kaleido predicts that this form of credit will reach over 12% of total global e-commerce spend on physical goods by 2025.