Survey: 72% of Card Users Take Part in Reward Programs

Two credit card companies stood out with higher than average performances in a recent survey of credit card users by J.D. Power and Associates.  The results also reflect the growing popularity of reward programs.

The two companies, American Express and the Discover Card, each catering to a different type of credit consumer, scored the highest in a customer satisfaction survey of 7,600 card users. The study measured customer satisfaction with credit cards in five key areas: interaction; billing and payment process; fees and rates; reward programs; and benefits and services.

Here are some additional findings by J.D. Powers:

• Transactors, those who pay off their bills every month, are, as a whole, more satisfied with their credit cards than revolvers and are twice as likely as to remain with their primary credit card issuer.
• Even though transactors are most interested in reward programs, 72 percent of all cardholders participate in some type of reward program.
• Hotel stays are the most satisfying type of reward, followed by cash rewards.
• One quarter of all cardholders don’t know if their card offers them additional benefits and one-third haven’t used any during the past year. Those users have lower satisfaction levels than their better informed counterparts.

“The results are illuminating,” conclude J.D. Power. “Two credit card company leaders in customer satisfaction stood out significantly from all the rest and were the only ones to perform above the industry average. They accomplished this with distinctly different offerings that appealed to customers with very different needs and expectations. Other cards excelled in some areas but not others and, depending on your individual needs, might also provide solid choices.”

American Express ranked highest among all credit card companies and performed well in all five customer satisfaction factors. American Express’s customers are what is known in the industry as “transactors” – customers who pay off their balances every month. Amex focuses on the rewards and benefits for cardholders, and it excels in meeting their expectations, the survey found. Nearly 8 out of ten transactors select their card because of the value they feel they get from its rewards programs, with interest rates of little importance because of their purchasing style, J.D. Powers said.

Discover Card, the second highest ranking company in the survey, caters primarily “revolvers,” who carry a balance forward each month. For 65 percent of this type of purchaser, low interest rates and fees are the driving force behind their choice of card. Discover Card has found success by offering its cardholders simplicity, with easy reward redemption, a particularly low incidence of reported problems and no annual fees, J.D. Powers said.

Here’s how cardholders scored top performers in areas they identified as important to them:

Rewards (Transactors)
AmEx
Discover
Chase

Fees/Rates (Revolvers)
AmEx
US Bank
Discover

Call Center
AmEx
Discover
Chase

Problem Incidence
Target Visa
Discover
WaMu

Accepted Everywhere
National City
WaMu
Chase
Target Visa