The Best Credit Cards for Customer Satisfaction
By Stephanie Steinberg
Lindsay bought a memory foam mattress from a store that guaranteed no interest financing for two years. Fourteen months after the purchase, interest charges surfaced on her bill.
A credit card David did not open showed up on his credit report as delinquent. The debt, which he discovered because he kept getting denied new credit, will remain on his credit history for seven years.
Joyce's son purchased a wedding band on her credit card without her approval. When she contacted the jeweler, the store refused to do anything about it.
Though their names have been changed for this article, these are all real complaints consumers have filed with the Consumer Financial Protection Bureau.
U.S. News & World Report's Best Credit Card rankings take into account consumer stories like these to evaluate credit cards on the market. One factor of the methodology, customer experience, uses CFPB complaints to determine how satisfied customers are with their credit cards.
Of the 18 credit card companies U.S. News reviewed, the issuers offering the best customer experience included American Express, BB&T and JPMorgan Chase.
To control for differences in the size of credit card issuers (banks and credit unions that offer credit cards), U.S. News divided the number of customer complaints filed for each issuer by the issuer's annual purchase volume in 2014. (The purchase volume, or total dollar amount of credit card transactions, was used as a size proxy, since most issuers keep customer base data private.) The data revealed that issuers receiving a relatively large number of complaints seem to respond to complaints in a way that satisfies customers, on average, whereas issuers with relatively few complaints seem to respond in a way that dissatisfies customers.
Therefore, if customer service is important to you, you may want to consider a card with one of the credit card companies at the top of this chart:
Our analysis suggests complaint resolution is a high priority for creditors with a large number of customers. For example, JPMorgan Chase has over 64 million credit card customers and ranks No. 3 on U.S. News' list for customer satisfaction. Last year, the CFPB received 1,609 credit card complaints concerning Chase. While the agency requires issuers to acknowledge customers' complaints within 15 days and resolve them within 60 days, Thomas Horne, head of customer service and card operations for JPMorgan Chase, says a team of Chase employees attempt to resolve complaints within 24 hours. Afterward, the team will take a customer complaint and "tear it apart," Horne says. "We recreate whatever the interaction was that caused a problem with a customer or a complaint ... and then figure out what we need to do differently to get better."
The Top Consumer Complaints
The CFPB, created in 2011 by the Dodd-Frank Wall Street Reform and Consumer Protection Act, launched the Consumer Complaint Database in June 2012. The goal is to collect consumer complaints and then work with the companies under fire to resolve the issues. As of July 1, 2015, the CFPB has received roughly 650,700 complaints about financial products. The most common complaints concern mortgages (28 percent), debt collection (25 percent), credit reporting (15 percent) and credit cards (11 percent).
Since it started collecting complaints in July 2011, the CFPB has received nearly 73,600 credit card complaints. As of last month, the CFPB has published over 51,500 credit card complaints in the public database, which only lists complaints companies have had an opportunity to respond to. Consumers filing a credit card complaint can choose among 30 issues. Excluding the "other" category, the top issues filed since 2011 include billing disputes with 8,519 complaints; identity theft, fraud or embezzlement with 4,278 complaints; and APR or interest rate with 3,891 complaints.
For consumers experiencing a problem with a credit card company, the first step is to have a conversation with the company and try to resolve it, says Bruce McClary, spokesman for the National Foundation for Credit Counseling. If you're not making progress with the creditor, the CFPB can step in as a third party to help. "It's important for people to take action to resolve problems quickly before they become difficult to unravel and cause permanent financial damage," McClary warns.
So what can you do if you're facing one of these common consumer complaints? U.S. News talked with credit card experts to get their advice.
Last year, the CFPB received 2,411 billing dispute complaints. Controlling for creditor size, U.S. News found PNC Bank had the least number of billing dispute complaints, followed by American Express and JPMorgan Chase in 2014.
"Billing errors can be costly to the consumer," McClary says. "The sooner those things are fixed, the better off the consumer is going to be."
When reporting a billing error, the burden of proof is on you. McClary says consumers should gather records, including receipts, billing statements and other documents that can validate a claim. "If they're missing any of that, the chances are they may not find satisfaction in how the creditor responds," he says. The records should be sent with a letter that states the date, your name, address, account number, amount in dispute and why you believe it is an error. (See the Federal Trade Commission's sample letter here.)
Under the Fair Credit Reporting Act, consumers have a right to dispute charges and not have it impact their credit report. Gail Hillebrand, CFPB associate director for consumer education and engagement, advises consumers to contact their credit issuer immediately when they spot an erroneous charge. "Once you have done that, the company cannot charge you while they are investigating," she says, adding that the issuer can't take adverse action like report your unpaid charge to a credit bureau. (You do, however, need to pay any charges on your bill you did make.)
A creditor must resolve a dispute within two complete billing cycles of being notified, and the payment suspension ends once a decision is made. if the creditor determines the charge was a mistake, it must credit your account and explain any corrections in writing. If the creditor dismisses your dispute, it must also explain the decision in writing, and you will have to pay the amount owed.
ID Theft, Fraud and Embezzlement
At 1,418 complaints, ID theft, fraud and embezzlement represent the second-highest complaints to the CFPB last year. In the U.S. News analysis, the companies that handled the least number of these complaints when controlling for size were American Express, JPMorgan Chase and USAA Savings.
There are two kinds of ID theft that spur credit card complaints: when someone uses a victim's existing credit card and when someone applies for a new credit card using a victim's personal information. "Consumers are fairly well protected when identity theft leads to either of those situations because, under federal law, they have the right to dispute credit card charges they have never authorized," says Susan Grant, director of Consumer Protection and Privacy at the Consumer Federation of America.
However, if a thief runs up charges on your credit card, and those charges go unpaid, it can damage your credit report. "Those are not necessarily the hardest problems to resolve on your credit report," Grant says, "but it can be time-consuming and aggravating for consumers to get errors on their credit reports fixed."
To ensure you haven't fallen victim to ID theft, you can order a free copy of your credit report each year from AnnualCreditReport.com, and check it for any accounts you don't recognize. Hillebrand also suggests reviewing your monthly credit card statements. "With online banking, it's really easy to pay your bill without ever looking at your statements, so we encourage people to take that extra step," she says.
If you are a victim of ID theft or fraud, it's important to contact your credit card issuer directly. McClary points out that reporting it first to the CFPB would "insert another layer of communication that could actually delay resolution rather than expedite it." And time is of the essence when it comes to ID theft and fraud. "The later you wait, the less your chances of having things resolve," McClary says, and that could cause "collateral damage to your credit score that can have implications for years."
Once you report ID theft, the creditor should close your account, issue a new card and credit any fraudulent charges. "If you don't hear from them within 24 hours after submitting the report, follow up," McClary says. If the creditor doesn't resolve the problem in a timely manner, Grant says that's when consumers should file a complaint to the CFPB.
There's no need to report ID theft to the CFPB if the credit card company resolves the problem. However, Grant recommends reporting the issue to the FTC at IdentityTheft.gov because the information helps law enforcement. "If, for instance, they are investigating what appears to be a criminal ring involving identity theft, the information about your particular situation about the ID theft could be useful, regardless of the fact that you already resolved it with the issuer," she says.
APR or Interest Rate
Coming in third, the CFPB received 851 complaints about interest rates and APRs (interest charged on credit card balances not paid in full) last year. Controlling for size, American Express had the least number of APR and interest rate complaints, followed by BB&T and Navy Federal Credit Union.
McClary says consumers are likely disputing interest rate increases or denials of lower interest rates they requested. Horne of JPMorgan Chase puts it bluntly: "People just don't like to pay interest, so at times, that will be the driver of a complaint."
As long as you pay your bills on time, your interest rate won't hurt your credit. "If you didn't get the interest rate you'd expect, it might be costing you more than you wanted to pay, but it doesn't affect your credit history," Hillebrand says.
To avoid getting hit with an unexpected APR, McClary advises reading a credit card agreement before signing up. Similarly, you should also review fees, including balance transfer and cash advance fees, which are among the least common CFPB credit card complaints. "Understand how the fees work and when it's appropriate for a creditor to charge a fee," McClary says. "Somebody might be blindsided by one of these fees, not because the fee shouldn't be charged, but because it was something they weren't aware of, and they didn't read the details of their credit card agreement."
When Filing a Credit Card Complaint
Have a problem with your credit card company you want to resolve? Follow these tips:
1.Gather records. When filing a complaint, you need documentation to back it up. "Especially when it comes to billing errors, fees charged, incorrect reporting to credit bureaus, identity theft [and] credit fraud, you need to have as much documentation as you can in order to get the best result," McClary says.
2. Document conversations. "In a lot of cases, people make a phone call, and they'll talk to a customer service person without putting the complaint in writing," McClary says. "That leaves a gap there for things to fall through the cracks." He recommends documenting your conversation with the representative and sending a copy detailing the conversation and date to the creditor via mail. If you send it by email, check the box that requires recipients to confirm they opened the message. "This shows them you're keeping track of things, and that helps move the needle," he says.
3. Seek help from a third party. If the credit card issuer has not solved the issue, you have a few options: You can file a complaint to your state attorney general's office or department of financial services, which both review complaints about financial products. "[But] the best route beyond going directly to a creditor would be the CFPB," McClary says. You can file a complaint to the CFPB at consumerfinance.gov/complaint.
"If [consumers] don't get satisfaction, then they find us," Hillebrand says. "... We do hope over time to see more companies handling these complaints themselves, so their consumers don't have to come to us."