Consumer satisfaction with credit cards hits all time low
After another tough financial year for consumers, the annual credit card Customer Satisfaction Report from uSwitch.com reveals that overall satisfaction with credit card providers has fallen – and is now the lowest it has ever been. But although all providers have seen a slip in standards, the traditional banks continue to be the biggest losers - failing to win a single award between them for the third year running.
At the top of the tables, Marks and Spencer reclaimed the top spot for overall satisfaction, while ethical bank Co-op also performed well, climbing two places into 2nd position as well as winning three other awards. Despite conceding the top spot for overall satisfaction, global credit card provider American Express still had a successful year winning four of the 11 categories. In fact, between them, Amex, M&S and Co-op dominate in the customer satisfaction league, winning ten out of 11 categories between them – only Virgin broke their stranglehold winning the best balance transfer award.
The survey of over 10,000 credit card customers reveals that the biggest improvement this year comes from Virgin - with an 8% increase in overall customer satisfaction while last year’s biggest climber, Natwest, falls three places. The top five for overall satisfaction is completed by two supermarkets, Tesco and Sainsbury’s Finance - highlighting the growing competition presented by alternatives to the high street banks and traditional providers.
At the wrong end of the table, the big banks still dominate. While new entrants to the report Vanquis and Bank of Scotland were voted bottom for overall satisfaction, they are closely followed by Barclaycard, HSBC, Halifax, Lloyds TSB and Santander. None of the high street banks top any category - only RBS manages second place for its balance transfer service. And although overall satisfaction across the board has slipped, things are worse for the banks. Last year the best high street bank was 15% off the top performer. This year the gap has widened to 19%.
However, almost two million are dissatisfied with the everyday service provided by their card company, consumers are holding onto their cards. Over half (51%) have had their credit card for more than five years. This may be a reaction to it being harder to get credit now, but it also means consumers are missing out on new deals on the market. It also seems that consumers are trying to become less reliant on credit cards, despite the rising cost of living. A quarter (25%) admit to having three or more credit cards, compared to three in ten (30%) in 2011.
Michael Ossei, personal finance expert at uSwitch.com, says: “2012 is set to be another tough year for consumers, and for those worried about starting the year in debt, credit cards may be the only option. However with overall satisfaction and customer service getting worse across the board, and the high street banks still providing some of the worst service, consumers should look around further afield at new providers for the best credit card for them.
“Instead of putting up with poor service or an uncompetitive rate, consumers should look around for a better deal – and sometimes they have to venture off the high street. With trust in the banks still low, and more players in the market, consumers have a bigger choice when looking for a new credit card. And with three in ten card users choosing their most recent card based on the rewards or points it offered, with generous schemes such as loyalty points that can be converted into cash, gifts, air miles or money off your shopping bill, it’s easy to see why Marks and Spencer, American Express and the supermarkets are doing so well.”
Barnaby Jenkins, Head of Credit Card, M&S Money, said: “Ensuring our customers are happy with the service they receive is our number one
priority, so it’s fantastic to hear that the M&S Credit Card has come top for overall customer satisfaction.”
“Customer feedback is incredibly valuable to us and we’ll continue to work closely with our customers to make sure we’re delivering the best service
possible.”
uSwitch.com Customer Satisfaction Report – highlights:
Best Overall
Marks and Spencer regained the top spot for overall satisfaction this year, satisfying 92% of its customers. American Express slipped to third place behind the Co-operative, but with just one percentage point between the top three, it’s all to play for.
Biggest Improver
Virgin has pulled itself up seven places in overall satisfaction going from 15th to 8th, with 74% of its customers now satisfied, up from 66% last year.
Worst Provider
Vanquis finds itself at the wrong end of the table for overall customer satisfaction in its first year in the report. But the general trend is that the high street banks are at the bottom of the league and for the third year in a row they fail to win an award between them.
Supermarket sweep
With almost a three in ten credit card customers (28%) looking for more than offers and great rates, supermarkets are winning over consumers with generous reward schemes. Tesco’s consistent high scores across a number of categories can be partly attributed to its generous reward scheme, while Sainsbury’s also enter the report in the top five.
Stuart McKeggie, Head of Sainsbury’s Credit Cards, said: “We’re delighted that our customers rate our products and service highly. We always strive to offer our customers great value and give the Sainsbury’s shopper a compelling reason to bank and shop with us. This year has been a great year for us with the introduction of two new market-leading cards, and offering card holders double Nectar points on Sainsbury’s shopping in-store, online and in petrol stations for two years has proved very popular indeed with our customers.”