American Express Liked Best by Credit Card Users

American Express is the highest-ranked credit card company in J.D. Power and Associates’ Credit Card Customer Satisfaction Study for a fourth year in a row. The study’s results are based on responses from more than 8,500 credit card users, collected in May and June. Here are the top three issuers:

American Express ranks highest in customer satisfaction for a fourth consecutive year with a score of 769 and performs well across all six factors that drive satisfaction. Discover Card follows with a score of 757 and performs particularly well in the interaction factor. U.S. Bank ranks third with a score of 727.

Not surprisingly, the top-ranked issuers shared high scores for the quality of their rewards programs and benefits and for the problem-solving abilities of their customer service departments.

The report, released earlier this week, shows that cardholders were more satisfied with their credit card companies than they were a year ago. Issuers scored 714 on J.D. Power and Associates’ 1,000-point satisfaction scale, up slightly from 709 a year ago. Somewhat contrary to this result, however, the proportion of cardholders who “definitely will not switch” their primary cards in the next 12 months continues to decline, reaching 22 percent in the 2010 study, down from 25 percent in 2009 and 30 percent in 2008.

Here is how J.D. Power and Associates defines “customer satisfaction with credit cards” and explains the study’s results:

The study, now in its fourth year, measures customer satisfaction with credit cards by examining six key factors: interaction; credit card terms; billing and payment process; benefits and services; rewards; and problem resolution. The increase in overall satisfaction from 2009 is driven primarily by improvements in satisfaction with credit card terms and billing and payment process. The largest increase in satisfaction with credit card terms is among revolvers, or customers who typically carry account balances from month to month. In contrast, satisfaction among transactors, or customers who always or usually pay their entire credit card balance each month, has declined slightly, compared with 2009.

One interesting result from the study is that the largest increase in customer satisfaction was recorded among what the study authors call “revolvers.” The reason it’s interesting is that these card users are the ones most affected by the sharp increase in credit card interest rates that preceded the full enactment of the CARD Act’s provisions. According to CreditCards.com, the average interest rate on new credit card offers stood at 14.23 percent on 2 June, 2010, up 1.52 percent from December 2009. The study shows that 29 percent of revolvers saw their interest rates increase in 2010, up from 24 percent in 2009.

How do we explain that? Well, one plausible explanation is offered by Michael Beird, director of banking services at J.D. Power and Associates. “It appears that revolvers are expressing a perception that ‘it could have been worse,'” said Beird. “In addition, revolvers, who tend to be more sensitive to fees and rates, are significantly more likely to say that CARD Act disclosures improved their understanding of their credit card terms.”

It will be interesting to see if the CARD Act, now that it’s fully in force, will have any further effect on cardholders’ interactions with their card issuers.

Image credit: Wikimedia Commons.