It suddenly got much easier to find out which credit cards are having disputes with their customers — although, as the American Bankers Association would argue, the complaints filed with the CFPB are still only allegations. But what about the issuers that are doing right by there customers?
We thought it a good time to make a quick investigation into the positives of the industry. For example, which issuers saw a relatively low proportion of CFPB complaints come there way based on market share? Which cards are offering unique benefits to consumers? And which networks are offering the best terms to issuers?
First, the data. In both the 10-month dataset acquired by the Wall Street Journal and the publicly available list of complaints filed since June 1, Capital One wins the naughty award, but which issuers are nice?
The winner appears to be American Express. Despite a 25.34 percent share of the nation’s credit card purchasing volume for 2011 according to the Nilson Report — double that of BOA, and nearly five times that of Capital One — Amex’s name appeared less than 1,000 times in the Journal’s complaint database, about a five percent share of all complaints filed. JP Morgan Chase and Bank of America each had a roughly ten percent share of the complaints; Citigroup had about 14 percent; and Capital One had a roughly 16 percent share.
There’s at least one factor likely skewing these results, however; it’s hard to demonstrate with data, but Nilson’s estimation of credit card purchase share probably includes a good number of corporate accounts — which one would expect to skew towards benefit-heavy issuers like Amex, and away from more consumer-focused companies like Capital One. So there’s at least one grain of salt worth taking with these results.
Indeed, the same trend held true in the smaller data set: Amex was mentioned in just 15 of the roughly 300 complaints filed since June 1, compared to numbers three or four times that size for other big issuers. In fact, Wells Fargo was mentioned 12 times — perhaps another result of the corporate/consumer split.
What about benefits? Most issuers offer products that fall into the same set of categories. Cash back, rewards points, and low rates are the primary offers; some issuers offer cards specifically designed for consumers looking to improve their credit scores, or manage high debt loads (e.g., the Chase Slate card). But there’s one card that doesn’t fit into any of those categories.
That’s the Citi Simplicity Card. What makes it unique? No annual fee; no late fees; and no penalty interest rate. There’s not much in the way of payback for responsible cardholders, but while most issuers offer cash back and rewards programs, there’s no other card out there won’t hurt you for forgetting about it. And finally, what does the expert say? For this exercise we contacted John Ulzheimer, President of Consumer Education at SmartCredit.com and a frequent guest on news outlets like CNN, FOX and CNBC.
Ulzheimer gave kudos to two issuers: American Express, for its superior benefits offerings (they vary according to which card, but you can find out details here); and Discover, for what Ulzheimer considers some of the most competitive prices in the industry (details here).
And while we had him on the line, we asked Ulzheimer to tell us what he tells consumers when they ask him about which credit card to apply for.
“I think the knee-jerk reaction is to simply suggest a card with a low interest rate but that’s dependent on the applicant’s credit score so it’s not very predictable,” Ulzheimer says. “In my mind, the best cards are going to be cards that have the highest credit limits and no annual fee. The highest credit limit is a credit score play, because it’s easier to maintain a low debt-to-limit percentage when you have a high credit limit.”
What surprises you about the credit card complaint data? And what are your favorite credit cards?