A new survey by J.D. Power is out for the 2015 credit card rankings. While a lot of the news is on the fact that Discover has taken the top spot from American Express in customer satisfaction (they actually tied last year but Amex had held the top since 2007), there are a few other parts of interest in regards to customers and their choice of credit card benefits.
Are Consumers Becoming Smarter About Credit Card Rewards?
There is still a vast misunderstanding by the general public when it comes to credit cards and the rewards they can give. Every time there is an article in media about credit cards and travel rewards, the comment sections are filled with people who state, with what seems like some authority, that anyone who chooses to take advantage of credit cards and their benefits have a terrible credit score (big myth that having multiple credit cards hurts your credit).
But, this survey by J.D. Power seems to suggest that consumers are getting a little smarter about credit card rewards. The study said that over half of the 20,000 people surveyed said they sign-up for a credit card based on the rewards while less than 25% said they sign-up for the cards based on the benefits of the card.
More Rewards Being Redeemed
The study also revealed that 52% of those surveyed said they redeemed for some kind of rewards in the last 6 months, but those “rewards” include cash, airline miles, rebates, gas points, and more (so not just travel based rewards). That number is up from the previous year’s survey and shows that people are taking advantage of the rewards their cards offer more than they did in the past.
Are They Being As Reward Smart As Possible?
However, the truth is that many of the consumers surveyed are still probably not being as smart with credit card rewards as they could be. There are a lot of credit cards out there by many issuers and some of the reward programs with the cards are far from great. While the rewards may strike the right note for consumers, in many cases, they may be better off getting a straight cash back card than the points they are currently earning in some far out program.
The great part about our hobby is that we get to choose cards that give us both – rewards and benefits. By strategically applying for credit cards, we can use cards that give us great reward bonuses while also using cards that give us some great benefits (sometimes, it is the same exact card!). Most like, the people that are redeeming for merchandise simply help to keep the redemptions we choose (travel) at great deals. Until people get into miles and points a bit to see what is possible, they will never fully realize what they are able to redeem for.
Credit Card Issuer Rankings
For those who are curious, here are the rankings of credit card issuers as ranked by the 20,000 survey participants (out of a ranking of 1,000 points):
- Discover (828)
- American Express (820)
- Chase (792)
- Capital One (790)
- Barclaycard (788)
- Wells Fargo (779)
- Bank of America (777)
- US Bank (776)
- Citi (765)
- GE Capital Retail Bank/Synchrony Bank (743)
Source: J.D. Power
Which of your credit card issuers do you find the most satisfying and why?
That’s a tough one. Chase would have been my hands-down answer a while back, but they are changing when it comes to moving limits to get new card (or even dropping other cards) to get new cards. USB dropped with Club Carlson. Amex dropped with one bonus lifetime per card. It might be Citi now (ThankYou points, etc.).