Retailers trump the big four in credit card customer satisfaction
With the FCA set to undertake a competition review into the UK’s £150 billion credit card market at the end of this year, and one in five consumers (20%) entering 2014 owing a hefty £5,000 or more on their card, the 2014 Credit Card Awards from uSwitch.com, reveal that traditional banks and credit card firms are letting customers down.
The survey of over 7,000 credit card customers shows a 39% gap in satisfaction between the best and worst credit card provider, with the Big Four - RBS, Lloyds, Barclaycard and HSBC - failing to win any awards. Instead, American Express comes out on top, winning Best Credit Card Provider as well as Best Rewards, while coming second for Online Service, Value for Money and Customer Service.
M&S Bank, Nationwide and Tesco Bank are close runners up. M&S Bank has traded on its great brand values to grab the award for Most Trusted provider and places in the top three for four additional categories, while Nationwide wins the awards for Best Customer Service and Best Online Service. Meanwhile, Tesco Bank wins three of seven categories, scooping the top spot for Best Overall Satisfaction, Best Value for Money, and Most Recommended.
By contrast, with an overall score of just 28%, Vanquis is voted Worst Credit Card Provider by its customers. It comes bottom in all eight categories, making the brand the least trusted and least likely to be recommended as well as having the lowest scores for value for money and customer service. Nevertheless, despite the brand’s poor score, it ended 2013 with about 1.1 million UK customers - about 22% higher than the previous year.
However, nowhere is the reputational damage more evident than with the Co-op Bank, which has taken a drastic fall from second to eighth place in the Trust category. A combination of the bank’s failed bid to take over 631 Lloyds Bank branches which fell through in April 2013, and drug allegations towards its former Chairman, Paul Flowers, seem to have had a significant impact on customers’ perception of the brand.
Marks & Spencer, Nationwide, Tesco and Sainsbury’s credit cards all feature alongside Amex in the top ten best credit cards for 2014, winning over customers with generous rewards, tempting cashback offers, and good customer service. By contrast, the big banks and many of the credit card giants reserve seats at the wrong end of the table, with Halifax, TSB, Bank of Scotland, and RBS joining Vanquis in the bottom five.
Jafar Hassan, personal finance expert at uSwitch.com, says: “It’s great to see retailers redefining credit cards to meet the needs of today’s savvy shoppers. While some consumers have a credit card purely as a means of providing credit, there are other cards designed for everyday spending which offer great rewards and cashback to loyal customers. Combined with top-notch customer service and great value for money, it’s not surprising that retail brands are hitting a home run with their credit cards.
“In theory, the larger players should be the ones offering with the most competitive products and interest rates – but it’s clear that in practice this is not the case. RBS, Vanquis and TSB customers have had enough of not getting anything back from their card. The Co-op Bank’s dramatic fall from second place to eighth in the trust category is a telling reflection of the impact that recent headlines have had on the brand’s reputation amongst consumers.
“With a new tax year now in full swing, now is the time for consumers to review their finances and take a long hard look at their household budget. With some consumers owing well into five figures on one or more cards, it makes sense to check that they are not paying over the odds on their credit card debt and find the best card for their situation. However, consumers need to be aware before applying that the best deals are only available to those with good credit histories and that they may not receive the rate that they are necessarily applying for.”