TROY, Mich.— The points, miles and perks that millions of Americans have come to expect from their credit cards is masking the fact many are feeling “increasingly strained” by their finances, while they are also feeling frustration with virtual assistant service channels, according to a new J.D. Power survey.
According to the newly released J.D. Power 2024 U.S. Credit Card Satisfaction Study, just 46% of cardholders are now classified as financially healthy and 51% carry revolving debt on their cards. Meanwhile, the average recalled interest rate on new purchases has climbed to 15.6%, creating a tenuous environment for cardholders and card issuers, J.D. Power reported.
Pressure is ‘Showing Up’
“Cardholders are facing mounting day-to-day financial pressures, which are showing up in the form of high levels of revolving credit card debt, declining levels of financial health and a migration away from points/miles cards,” John Cabell, managing director of payments intelligence at J.D. Power, said in a statement. “These pressures tend to be associated with higher annual fees. This is a tough marketplace for card issuers to navigate, however, because even though overall credit card customer satisfaction scores are largely flat, the customer base has really become bifurcated into one subset that is feeling squeezed by economic pressures and one that is not. Card issuers need to be able to offer options that resonate and deliver value for both segments.”
Key Findings
According to J.D. Power, key findings in the study include:
- Cashback cards are king. A majority (58%) of cardholders use cashback cards, while just 31% are using points/miles cards and 11% are using value cards (e.g., credit-building cards with no rewards). “A reason provided more often for moving to cashback and value cards is to incur lower/no annual fee,” J.D. Power said. “Cashback cardholders also say they redeem rewards more often for a statement credit (21% vs. 9% for points/miles).”
- Financially unhealthy shift products. “This trend away from points/miles is consistent with a continued decline in financial health among credit card customers. An increasing majority (54%) of cardholders are now classified as financially unhealthy. The use of points/miles cards by financially unhealthy cardholders drops significantly in 2024 (27%) from 2023 (31%) with concurrent growth in use of cashback and value cards.”
- Revolving debt and high interest rates raise concern. “For a second consecutive year, 51% of cardholders are carrying revolving debt,” J.D. Power reported. “The recalled average interest rate for new purchases has increased to 15.6% (16.9% among financially unhealthy cardholders) in 2024, up from 14.6% in 2023, and cardholders are spending $103 less per month, on average, than they were in 2023. The percentage of cardholders saying the overall perks of their card improve their lifestyle declines in 2024 to 25% (18% among financially unhealthy cardholders).”
- Financial health affects customer satisfaction. “While overall satisfaction declines just two points (on a 1,000-point scale) this year (610 vs. 612 in 2023), cardholder perception of credit cards varies widely based on financial health,” the study found. “Satisfaction improves two points among cardholders without revolving debt but declines five points among those with revolving debt. Overall satisfaction scores are 61 points lower among cardholders carrying debt (580) than among those without debt (641).”
- Automated customer service fails to connect. “When it comes to interactions with customer service, whether for problem resolution or questions about their account, automated phone and virtual assistant channels significantly underperform personal interactions with live representatives and digital engagement via email, online chat, mobile app messaging, text and social media,” J.D. Power said. “The overall satisfaction score for automated customer service is 609, which is 40 points lower than the study average for customer service satisfaction.”
Study Rankings
The J.D. Power study further found:
- American Express ranks highest in customer satisfaction among credit card issuers, with a score of 634. This is the fifth consecutive year in which American Express receives a segment award. Discover (629) ranks second and Capital One (620) ranks third, the survey found.
- Capital One SavorOne Rewards Card ranks highest in customer satisfaction among bank rewards credit cards with no annual fee for a second consecutive year, with a score of 679. Chase Freedom Flex (670) ranks second and Discover it Student Cash Back Credit Card (657) ranks third.
- Bank of America Premium Rewards Elite ranks highest in customer satisfaction among bank rewards credit cards with an annual fee for a second consecutive year, with a score of 692. Blue Cash Preferred Card (American Express) (680) ranks second and Chase Sapphire Reserve (669) ranks third, according to J.D. Power.
- Capital One Platinum Mastercard ranks highest in customer satisfaction among bank credit cards with no rewards or annual fee, with a score of 619.
- Southwest Rapid Rewards Premier Card (Chase) ranks highest in customer satisfaction among airline co-branded credit cards, with a score of 658. Southwest Rapid Rewards Priority Card (Chase) (649) ranks second and Delta SkyMiles Platinum American Express Card (627) ranks third, the survey found.
- Apple Card (Goldman Sachs) ranks highest in customer satisfaction among co-brand credit cards with no annual fee, with a score of 654. This is the fourth consecutive year in which Apple Card and issuer Goldman Sachs have collectively earned a segment award. Hilton Honors American Express Card (644) ranks second and Costco Anywhere Visa by Citi (634) ranks third, J.D. Power said.
About the Study
According to J.D. Power, the U.S. Credit Card Satisfaction Study, now in its 18th year, measures customer satisfaction with credit card issuers by examining seven factors (in alphabetical order): account management; benefits; customer service; new account; rewards earning; rewards redeeming; and terms.
The study includes responses from 38,852 credit card customers and was fielded from June 2023 through June 2024.
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