American Express And Discover Tie For Customer Satisfaction

Brendan Harkness

Brendan Harkness | Blog

Aug 28, 2014 | Updated Apr 27, 2016

American Express and Discover tie for best customer service, according to the J.D. Power 2014 U.S. Credit Card Satisfaction StudySM, released earlier today. American Express has previously ranked as the number one pick since the annual study began in 2007.

Card issuers are ranked for customer satisfaction by the following 6 criteria:

  • Credit card terms
  • Rewards
  • Benefits and services
  • Interaction
  • Problem resolution
  • Billing and payments

American Express and Discover each achieved a score of 819 out of 1,000, quite a bit higher than the overall satisfaction score of 778. While these two issuers have very different approaches toward credit cards, they both care deeply about their customers’ concerns. Many cards offer rewards for using them, but few go the extra distance to get in touch with the needs of their customers. Chase came in third place, still beating the average with a score of 789.

Jim Miller, senior director of banking services at J.D. Power, says that rewards aren’t enough. “The market is ultracompetitive and credit card companies are using rewards programs to make their card more attractive,” he said. “However, layering on rewards is not the key to satisfied customers, rather it’s understanding your customers, knowing what motivates them and aligning rewards and benefits to their needs.”

American Express and Discover have managed to do just that. The most commonly reported problem among credit card consumers is fraudulent or unauthorized activity, making up 21% of all complaints, but these two companies have learned to turn these kinds of challenges into an opportunity for growth. Other credit card companies take note: even when faced with a security breech or unauthorized activity, it’s possible to come out of the situation in an even better position than you were before.

Here’s how the customer satisfaction dynamic works during a situation of possible fraud. Company-wide security breaches are rightly seen as more important than personal identity theft: when customers were contacted about possible fraud, they reported their satisfaction to be 797; when contacted about a security breach, their satisfaction dropped to 767.

When a breach occurs, the credit card company’s behavior becomes the all-important factor in how they will be seen afterward. If customers are notified about a security breach but aren’t issued a new card, general satisfaction falls to 734. If a new card is issued, satisfaction instead rises to 788; if that card is delivered within 7 days, it goes up to 801. If a credit card company does both of these things – notify the customer and issue a new card within 7 days – as well as provide email alerts, overall customer satisfaction goes all the way up to 835.

By taking care of their customers in the event of a security breech, a company can prevent their rating from falling to 734, and instead bring it up over 100 points from that. Overall, customers who are signed up for email alerts report their satisfaction to be 76 points higher than those are aren’t, and those who use a mobile service report a satisfaction score 54 points higher.

Other takeaways from the study include how people feel about their rewards plans, and how well they understand credit cards in general. 19% of customers believe that their rewards programs have improved in the past year, which is just a bit more than the 17% who said so last year. More people say that they understand credit card rewards than ever before: 63% this past year, compared to 59% in 2013. There are a few other stats that serve to temper this, however: 43% said they didn’t know if their rewards had an annual limit, 30% didn’t know if they had an expiration date, and 21% didn’t know if they could earn more rewards for particular kinds of purchases.

10% of customers switched credit cards in 2014, and 42% of them said they did it to get a better rewards program.

Here are the overall results of the J.D. Power 2014 U.S. Credit Card Satisfaction Survey:

Credit Card Company Customer Satisfaction Index Ranking (out of 1,000)
American Express 819
Discover 819
Chase 789
Industry Average 778
Barclaycard 776
U.S. Bank 773
Wells Fargo 773
Bank of America 766
Capital One 765
Citi 756
GE Capital Retail Bank 738

 

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