With total U.S. consumer credit card debt now exceeding $1 trillion for the first time, consumers appear to be less satisfied with their credit cards. J.D. Power’s 2023 Credit Card Satisfaction Study concludes “customer satisfaction with rewards programs and other perks designed to build loyalty is suffering.”
One contributing factor may be consumers’ increasing reliance on credit cards to make ends meet. The study found 51% of U.S. credit cardholders now carry revolving debt at an average overall self-reported interest rate of 14.8%.
“The pandemic-era savings cushions are gone, the economy is shaky and consumers are leaning more heavily than ever on their credit cards to cover day-to-day expenses,” said John Cabell, managing director of payments intelligence at J.D. Power. “This is a make-or-break moment for card issuers.”
Cabell says it’s not unusual for high levels of expensive credit card debt to erode satisfaction. He says credit card companies can improve their standing with consumers by encouraging the use of payment plans and taking other steps to build goodwill and trust.
In particular, the study found that satisfaction with rewards cards is declining. Rewards earning had the lowest level of overall satisfaction of the seven factors evaluated in the study.
The study’s authors suggest this is driven by less favorable ratings on the amount of rewards earned per dollar spent, especially among cashback cardholders. In fact, the top reason given for switching card providers is seeking a better rewards program.
Cardholders paying annual fee are most satisfied
Interestingly, consumers with an annual fee credit card were the most satisfied. Cardholders who say their annual fees average $100 or more had the highest satisfaction with benefits and rewards earning, even more so than those who have cards with lesser or no annual fees.
However, satisfaction levels begin dropping sharply among cardholders paying $500 or more in annual fees.
Capital One SavorOne Rewards Card ranked highest in customer satisfaction among bank rewards credit cards with no annual fee, with a score of 666. Discover it Student Cash Back was close behind and Blue Cash Everyday Card from American Express was a close third.
Bank of America Premium Rewards Elite ranked highest in customer satisfaction among bank rewards credit cards with an annual fee, with a score of 712. American Express Gold Card ranked second and The Platinum Card from American Express was third.