American Express ranks highest in credit card satisfaction; Big Banks lag behind competitors
Melbourne: 14 July 2016 — Credit card issuers in Australia need to make their rewards programs more attractive for customers or else they may face a significant reduction in consumer spending, according to the J.D. Power 2016 Australia Credit Card Satisfaction StudySM. And even as the Big 4 make small strides in improving their customer satisfaction scores, the other competitor banks outpace their improvement by a significant margin. The study also finds that American Express customers are the most satisfied with their cards.
However, while overall credit card satisfaction continues to improve, a large percentage of customers still report that their rewards program is either unattractive or only slightly attractive. Only one-fourth of cardholders say that the cards’ rewards program resonates with them. Furthermore, nearly one in five cardholders thought that the value of their rewards had declined in the last 12 months. This presents a double setback for card issuers as a lackluster rewards program not only depresses satisfaction scores but also has the effect of lowering monthly spend by as much as 300%.
“Clearly Australian customers are not getting enough from the loyalty and rewards programs offered by credit card issuers in Australia; or simply don’t know how to access the benefits or understand them,” said Dr. Gordon Shields, director at J.D. Power. “The overall decline in value of some programs should prompt consumers to look around for the best offerings in order not to squander the potential benefits they can get from cards.”
The most popular rewards amongst Australians are gift cards, airline tickets and cashback offers. Special events, hotel stays and donations are least preferred.
The study also reported an increase in cardholders (26%) actively using a bank app to track their credit card activities, up from 15% in 2015. On average, eight of 10 cardholders also are visiting their banks’ website to service their accounts.
“With the increasing use of digital channels, card issuers have a greater opportunity than ever to reach out to customers and inform them directly about the benefits attached to their cards,” said Loi Truong, senior country manager, “Issuers should personalise customers’ online experience as much as possible. Those that can effectively communicate the value of their products to customers will not only gain in terms of increased satisfaction, but more importantly, greater loyalty, spend and word-of-mouth.”
About the Study
This study, now in its second year, measures customer satisfaction with their credit card issuer by examining six key factors: interaction; credit card terms; billing and payment; benefits and services; rewards; and problem resolution. Satisfaction is calculated on a 1,000-point scale.
American Express ranks highest in credit card satisfaction with an overall score of 755. American Express performs particularly well on the benefits and services; and rewards factors in the study.
Bendigo Bank, last year’s top-ranked issuer, ranks second with a score of 748, performing well in credit card terms; interaction; billing and payment while Coles follows at 737.
- Cardholders spend an average of $1,311 each month on their primary card. However, cardholders who have an attractive rewards program, spend much more at an average of $2,036.
- Low recall of card benefits: Half of all cardholders cannot recall a single benefit that comes with their cards. Only a very small percentage (7%) can name seven or more benefits. The most commonly recalled benefits are travel insurance, fraud protection and annual fee waiver.
- Four main reasons for Australians making the jump: Amongst cardholders who have switched credit card issuers, the most often cited reasons are to avoid paying an annual fee (35%); a better rewards program (34%); lower interest rates (33%) and better benefits (32%).
- Delighted customers pay dividends: Sixty-three per cent of cardholders who are delighted with their card issuer (overall satisfaction of 900 or higher) say they “definitely would” recommend their card to a friend or colleague, compared with the study average of 17%.
- Cardholders are ignorant of the fine print: Nearly three-fourths of credit cardholders don’t fully understand the credit card terms on their cards. Foreign currency and transaction fees (30%); interest rates (22%) and balance transfer conditions (20%) are the most commonly cited areas in which they exhibit weak understanding.
The 2016 Australia Credit Card Satisfaction Study is based on responses from 3,825 credit card customers. Coverage includes 21 major credit card issuers, 13 of which are rank eligible, in the market with scores based on the cardholder’s primary card used. The study was fielded in May 2016.
Media Relations Contacts
Mark Detre, PPR +61 (03) 8643 1631; Mark.Detre@ppr.com.au
XingTi Liu; J.D. Power; Singapore; +65-6733 8980; email@example.com
John Tews; J.D. Power; Troy, Michigan USA; +1 248 680 6218; firstname.lastname@example.org
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