US Credit-Card Satisfaction Falls On Fees, Rates - Survey

U.S. customers are less satisfied with their credit cards than they were a year ago, mostly because of displeasure over fees and rates, according to marketing-data company J.D. Power and Associates.

As financial companies sought profit wherever they could find it, many raised interest rates on their credit cards, prompting U.S. President Barack Obama's administration to push for controls over their practices.

Overall, satisfaction in the 2009 survey was 703 on a 1,000-point scale, the lowest rating since the survey began two years ago.

American Express Co. (AXP) was ranked highest in customer satisfaction, topping the list each year of its life. Its grade was 762, followed by Discover Financial Services (DFS) and National City Corp., which is now owned by PNC Financial Services Group Inc. (PNC). First Premier Bank and Credit One Financial Inc. (COFI) were rated the two worst.

Of the six factors examined to determine customer satisfaction, the metric on fees and rates had the lowest score, a major contributor to the overall drop. J.D. Power said 20% of credit-card users saw their interest rate increase, while a year earlier only 10% did. Late-payment fees were also more frequent. People who carry a balance from month to month were the least satisfied with fees and rates.

Credit-card issuers best weapon against deteriorating satisfaction is to clearly communicate any changes to customers ahead of time, J.D. Power said.

The study was based on responses from more than 9,000 credit card users in May and June.

-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; [e-mail]