It's wise to choose credit cards by how you plan to use them

Monday, November 5, 2007

By SANDRA BLOCK
Gannett News Service

Americans have got a complicated human relationship with recognition cards. Most of us won't go forth place without them. But inquire the norm consumer how he or she experiences about recognition card companies and you're likely to hear the sorts of words you can't state on prime-time television without getting into problem with the FCC.

A recent study by J.D. Power and Associates establish that recognition card game have got the last client satisfaction degree of all fiscal services. On a 1,000-point scale, card companies received an norm satisfaction evaluation of 658.

No surprise

Those consequences will come up as no surprise to anyone who ever have been smacked with an unexpected late fee or interest-rate hike.

Still, choosing the card that best lawsuits your adoption wonts can better your recognition card experience, states Jeff Taylor, senior manager of banking pattern for J.D. Power.

The J.D. Power survey splits recognition card users into two categories:

Transactors -- These are people who usually pay off their balance each month. These folks be given to be more than satisfied with their recognition card game than are card holders who transport a balance.

Because transactors don't have got to worry about involvement rates, they be given to look for card game that supply the best rewards, Deems Taylor says. That make sense: If you don't pay involvement on your recognition card, any wages you have are gravy.

But some wages are more than appreciated than others. Airline statute miles are still the most common recognition card award, with about 40 percentage of card holders receiving this incentive, the study found. Still, clients who received cash-back awards, which are available to 22 percentage of card- holders, expressed higher degrees of overall satisfaction, the study found. Those who received hotel wages points -- available to only 9 percentage of card holders -- also expressed higher satisfaction. That may reflect troubles consumers have got faced in trying to utilize their air hose miles, Deems Taylor says.

The study also establish that most card holders aren't aware of all the benefits their card game offer. Many cards, for example, offering traveling insurance, exigency aid and concierge service. Card holders who take advantage of all their card's benefits be given to be more than satisfied.

Revolvers -- These are folks who typically transport a balance on their recognition cards. If you fall into this category, bury about wages programs. You can't afford them.

Card Game with generous wages typically complaint higher involvement rates, states Greg Daugherty, executive director editor of Consumer Reports. If you transport a balance, he says, the amount you'll pay in involvement probably will transcend the value of the reward.

Your best stake is to pay off your balance each month. But if that's not possible, expression for a card with a low involvement charge per unit and no yearly fee. High-mark cards

American Express ranked highest among the 10 recognition card issuers analyzed in the J.D. Power survey, followed by Discover. American Express received high Marks for benefits, characteristics and job solving; Discover earned good classes for rewards, charge and payments.

American Express and Discover also received high evaluations in a recent reader study conducted by Consumer Reports.

Card holders who transport a balance also should see card game issued by little Banks and recognition unions, Daugherty says. These loaners don't have got got large advertisement budgets, so you have to make some research to happen them. But the final payment is often less fees and involvement rates, he says.

In the Consumer Reports survey, USAA Federal Soldier Savings, which is limited to members of the military, retired military force and their families, received a reader mark of 95 of 100 for its American Express and MasterCard-branded cards. Respective recognition unions, including the Navy Federal Soldier Recognition Union, also received high Marks for their cards. Rates on card game from these loaners ranged from 9 percentage to 11 percent.

The norm charge per unit on a variable-rate credit card is 14.5 percent, according to Bankrate.com.

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Credit Card Mergers Do Not Affect Card Usage, Says Cardbeat

WESTBURY, N.Y.--(BUSINESS WIRE)--In the past few years, the credit card industry has witnessed landmark
mergers between issuers such as Bank of America and MBNA, JPMorgan Chase
and Bank One, and Barclays and Juniper Bank, among numerous others.
Two-thirds of cardholders whose issuers have been a part of a merger
have not changed the ways they use their credit cards post-merger,
according to research recently published in Cardbeat®,
the syndicated market research report by Auriemma Consulting Group (ACG).

“These consumers were pleased with the
customer service, card pricing and rewards of their credit cards, and
chose to continue using them because the products and features did not
change after the merger,” says Megan
Bramlette, managing editor of Cardbeat.

Overall, consumers are neutral on bank mergers, with 68% expecting
little change to their opinion of their credit card company if their
card issuer was bought or sold.

“Consumers care less about the bank that
issues their card and monthly statements than the benefits they receive
from that relationship,” Bramlette says.
Falloff in activity occurs when card rewards are not as rich post-merger
as they were before, or when interest rates and account fees on the
portfolio rise.

“Merging banks need to consider how consumers
will react to their products post-merger,” she
continues. “Our research shows that most
consumers are confident about the ongoing independence of their current
credit card issuers and have made it clear that they will remain loyal,
even after a merger, as long as cardholder benefits and service levels
remain the same.”

The information in this release includes data from 401 credit card users
surveyed in February 2007. The findings were originally published in the
February 2007 issue of Cardbeat.

ACG is a management consulting firm in the payments and lending
industry. Cardbeat is a syndicated market research study from ACG that
provides insight into how consumer perceptions impact credit card
acquisition and usage.