Banking / Finance

Credit card customers frequently lack understanding of the terms, benefits and rewards associated with their cards

22nd Aug `13, 06:59 PM in Banking / Finance

Although credit card satisfaction continues to improve, a large percentage of customers indicate they do not fully understand…

BDMS
Guest Contributor
 

Although credit card satisfaction continues to improve, a large percentage of customers indicate they do not fully understand their card’s terms, benefits and rewards program, according to the J.D. Power 2013 U.S. Credit Card Satisfaction StudySM released today.

The study, now in its seventh year, measures customer satisfaction with credit cards by examining six key factors: interaction; credit card terms; billing and payment; rewards; benefits and services; and problem resolution.

The study finds that customer awareness of earning and redeeming rewards with their credit card has declined year over year, with 59 percent of customers saying they “completely” understand how to earn rewards in 2013, compared with 66 percent in 2012. Furthermore, 33 percent of customers indicate they are unaware of the benefits associated with their card.

“Customers who use their card’s benefits spend an average of $400 more per month on their card, compared with those who are aware of benefits but do not use them, so clearly this is an area of importance to card issuers,” said Jim Miller, senior director of banking services at J.D. Power. “While most customers change cards for a better rewards program, they often don’t fully understand the rewards offered with their current card. There is a clear opportunity for issuers to better communicate rewards programs and benefits to not only keep customers loyal, but also to attract new customers.”

Fewer than one-half (47%) of credit card customers say they “completely” understand their credit card terms. Among these customers, 73 percent indicate a lack of clarity regarding interest rates, and 31 percent lack an understanding of late payment fees.

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