Credit card consumers are the happiest that they have been since the recession of 2008. After the passing of the Credit Card Accountability, Responsibility and Disclosure Act in 2009, consumers have benefited from the government crackdown on the banking and finance industries.
According to a recent survey by J.D. Power and Associates, credit card satisfaction rose 15 points, from 714 in 2010 to 731 in 2011. J.D. Power and Associates has been conducting the survey since 2007 -- consumer satisfaction is monitored on a 1,000 point scale.
In 2009, when the act was passed, customer satisfaction levels were at 705. At this time, many consumers had given up hope and had stopped paying their credit card bills due to rising interest rates and the magnitude of America’s financial crisis. A lot of consumers also closed their bank accounts and cut back the amount of purchases they made on credit.
The act is a double-edged sword; since its passing it has become more difficult for lenders to charge interchange fees and raise interest rates at any time. The act also made it necessary for credit card issuers to simplify their disclosure methods and simplify their contract language. The Credit Card Act was widely protested by the credit card industry as it cut into the pockets of many of the large banks like Wells-Fargo, Bank of America and J.P. Morgan and Chase. According to card consultancy R.K. Hammer, U.S. card issuers lost close to $11 billion in annual revenues after the passing of 2009’s Credit Card Act. In order to counter act this, banks have began charging fees on debit cards, ATM withdrawals, and implementing minimum balances.
The good news is that the act is working. "The transparency created by the legislation helped," Michael Beird, director of banking services at J.D. Power and Associates, a division of McGraw-Hill Cos. said. "We see it in fees and rates … and the [new] layout and design of people's statements were generally well-received," he adds.
Consumers are genuinely satisfied, and now know more about their accounts, banks, and possible fees. As a result of this, consumers feel better about their relationships with credit card issuers, according to Beird. "The issuers have to do more to educate their customers now. This is the second year in a row they've improved customer satisfaction,” he said.
For the fifth year in a row, American Express is ranked number one in customer satisfaction, with a score of 786 out of a 1,000-point sale. According to the J.D. Power and Associates 2011 US Credit Card Satisfaction Study, the credit card issuer, American Express, offers the best services and benefits, rewards and credit card terms.