Consumer Sentiment - Credit Card Pain Points, Problems, Issues
To have a broad understanding surrounding consumer sentiment regarding the problems, pain points and/or issues credit card holders face. An ideal response would include any data about Chase Sapphire Reserve and American Express card holders. This should not surround the brand's shortcomings in social, but instead should be about actual consumers and their sentiment. Insights should be relevant to the COVID era.
- We were not provided a geographic focus for this project, so we assumed a narrow approach and looked specifically at the United States. If a more broad approach is desired, for example, a global view, this would have to be clearly communicated to us in any reply.
- According to JD Power's brand new 2020 U.S. Credit Card Satisfaction Study released on August, "U.S. credit card customers appear to be losing faith that their card issuers will be there for them when they need it most as the COVID-19 pandemic continues to drag on consumer confidence." This is, of course, a paywalled study which Wonder does not have access to. We only use publicly available sources. However, we have presented the link here in case a purchase was desired, and there are some highlights from the report that were freely available, which we have presented below.
- "Some of the largest declines in credit card customer satisfaction are in the affluent/mass affluent segment, in which overall satisfaction scores have declined 14 points since the beginning of the pandemic. Customers in this segment are typically some of the most financially important to credit card companies. Also, customers who have been financially affected by the pandemic have overall satisfaction that is 14 points lower than those who have not been financially affected."
- Communication from issuers is likely a source of dissatisfaction. "Just 36% of credit card customers indicate they’ve been proactively contacted by their card issuer during the past 12 months. That compares with 60% of mortgage customers and 48% of retail banking customers during a similar timeframe. Communication with customers is critical to building trust and brand loyalty during uncertain economic times and, at the same time, customers should always contact their card issuer if they have questions or need assistance with their account."
- "In the midst of the pandemic, 89% of credit card customers say their current card fully meets their needs. This fact is a silver lining for issuers, because the decline in satisfaction is not an indicator of near-term defection by customers. However, issuers should ensure that customers understand the terms and benefits associated with their cards, and customers, in turn, should be willing to change cards if fee-based perks or travel points are no longer relevant in the current environment."
- "American Express ranks highest in customer satisfaction among national issuers, with a score of 838. Discover (837) ranks second and Bank of America (812) ranks third. Regions Bank ranks highest in customer satisfaction among regional bank issuers, with a score of 816. BB&T and PNC rank second in a tie, each with a score of 815."
- "Credit card issuers were on the path to earning record high levels of customer satisfaction during the first three waves of the 2020 study, which were all conducted prior to the pandemic. Those gains were cut in the final wave of the study, with overall satisfaction falling 10 points (on a 1,000-point scale), led by declines in satisfaction with credit card terms and communications."
- According to John Cabell, director of banking and payments intelligence at JD Power, “There are cardholders who are paying an annual fee who have experienced a significant drop in customer satisfaction with rewards, and their perception of the amount of rewards gained per dollar spent."
- Capital One Financial Corp. "began letting its Venture and VentureOne customers redeem their miles on restaurant delivery, takeout and streaming services from certain merchants until Sept. 30. These cardholders also can earn extra miles by ordering through Uber Eats. Meanwhile, Capital One’s Savor Rewards customers can earn 5% cash back on orders through the delivery platform, and 4% cash back on subscriptions to streaming-video services such as Netflix, Hulu and Disney+."
According to Matt Knise, the head of Capital One rewards, his team made those moves after analyzing spending data and speaking directly to customers. "[....]what we heard over and over again when talking to customers was they view their rewards as something a bit more aspirational—a bit more ‘treat yourself’—which is why we really decided to home in on things like deals for streaming services and restaurants.”
- “Customers tend to get confused by a complicated rewards program, and dissatisfaction often follows confusion.”
- "Complaints made to the federal Consumer Financial Protection Bureau were up 50% from March through June this year compared with the same time period in 2019, according to research from consumer advocacy organization U.S. PIRG. Issues range from credit report mistakes to problems related to debt collection, credit cards or mortgages."
Chase Sapphire Reserve Card
- "Juan Escobar, 28, purchased flights for a weekend in Chicago using his Chase Sapphire Reserve card. He planned to celebrate St. Patrick’s Day and his anniversary with his wife, he tells CNBC Make It. But because his wife is diabetic, the couple decided not to risk the roughly three-hour flight from Orlando.
After multiple calls that totaled more than nine hours on hold, Escobar says he eventually got through to Chase on Thursday using a customer service number for the company’s bank division. The customer service desk reportedly told Escobar the only refund option was a travel voucher, valid for one year. “That doesn’t work for us, how do we know that we can travel then?” Escobar says. “My wife is diabetic and I cannot risk her getting sick. It’s only about $200, but it’s not about the money — it’s the principle,” he says. “We literally have travel bans and the World Health Organization and the CDC stating that we shouldn’t be traveling.” For Escobar, the experience has soured his view on the Chase Sapphire Reserve card. He says that he wants to cancel and find another go-to travel credit card."
- "Now, in the age of COVID, the Sapphire Reserve brand's prime selling points, such as triple rewards on travel and dining and free airport lounge access, are suddenly irrelevant for many cardholders. Meanwhile, the annual fee of $550 ($300 of which can be recouped via travel credit) can look prohibitive. Could the coronavirus pandemic put an end to Chase's "cult?"
- According to Jill Gonzalez, an analyst with the consumer finance site WalletHub, the Chase Sapphire Reserve has likely taken a hit.
"While we do not have exact information on the card's popularity, it would only make sense for it to be less used during the pandemic. Given its intended purpose, and its high fees, the card may be losing popularity in favor of cheaper cards."
Gonzalez also noted that the Sapphire Reserve has always been an "elite card"—"accessible only to a small percentage of the population who are big spenders with excellent credit. It is still a good choice for those who fit that profile."
Summary Of Our Early Findings Relevant To The Goals
- As discussed at the top of this document, we were not provided a geographic focus for this project, so we assumed a narrow approach and looked specifically at the United States. If a more broad approach is desired, for example, a global view, this would have to be clearly communicated to us in any reply.
- Our initial hour of research focused on trying to find publicly available data surrounding the pain points, problems, and/or issues consumers in the United States are facing with credit cards, specifically focused on the COVID-19 era. Obviously, not a lot of studies would have been completed surrounding this exact topic, but we were able to find a paywalled JD Power source. The publicly available key findings were tangential, but did mention that communication was a likely pain point right now, along with being able to redeem rewards that are no longer available (like travel and for dining out), as well as getting refunds, and the annual fees for some cards. This is a total of four pain points identified in the initial hour backed by reputable sources and relevant to COVID-19.
- We want to caution that there is not a great deal of quantitative data, but there appears to be qualitative data. That is, consumer complaints that are not quantified in a study, but are available on review sites.
- We have gotten creative in our scopings in order to return the most relevant data.
- Please select one or more of the options provided in the proposed scoping section below.
Proposed next steps:
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