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Review Credit Card Ratings
A Consumer Reports survey of the best and worst credit cards, revealed lower cardholder ratings to the cards offered by Chase, Bank of America, Citibank, Capital One and HSBC, than those offered by American Express, Discover, and credit unions. 36,000 people participated in the survey.
Review credit card ratings given by cardholders.
The credit card offered by USAA Federal Savings received 95 out of a possible 100 points, thus earning the highest rating. Unfortunately, the card is only for members of the military, retired military personnel and their families. Other credit unions which also earned high scores, also have limited membership. The Navy Federal Credit Union; and others, were the next highest scorers. The interest rates charges by these three highest rated issuers was 9-11%.
At the opposite end of the spectrum, charging 17% and getting the least points was Direct Merchants (with 67 points) and Washington Mutual's Providian (with 61 points).
Why are credit union credit cards getting higher ratings from consumers? Since credit unions are run by their members, they are more likely to take care of their members and are less likely to suddenly increase their interest rates.
Survey respondents also said they were very satisfied with American Express and Discover, whose median credit card interest rates are 14-15%.
Two retailer Visa credit cards also scored well. Cabela's and Nordstrom, with an average interest rate of 14% and a long history of superior customer service.
Cardholders said that they had far fewer billing headaches and other problems with the card issuers at the top of the ratings; whereas consumers who used the MasterCard and Visa bank cards through JPMorgan Chase, Bank of America, Citibank, Capital One, and HSBC, complained that they were assessed unfair late fees or experienced unexpected interest rate increases.
In regards to unexpected interest rate increases, Providian had the worst consumer ratings. Cardholders said their bills also arrived too late to get their payments in on time, and they were more likely to be charged a late fee even when they sent their payments a week before the due date.
28% of the cardholders paying the highest interest rates of more than 25% reported that their rate increase was due to a universal default clause (the clause allows issuers to increase rates if the cardholder makes late payments on other accounts, including car loans, mortgages, or other credit cards).
The survey said penalty fees for late payments more than doubled in the last 12 years, from an average of $13 in 1995, to $28 this year. Some fees were even has high as $39.
The survey also reported how well customers said issuers treated them when they needed assistance. USAA Federal Savings earned a top score, while other credit unions, American Express, and Discover were also highly rated.
Overall, 27% of consumers who called customer support reported problems in getting help from representatives. The respondents reported unreasonable waits, difficulty navigating voice systems, or having to make multiple calls to speak to several staffers.
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