Consumer Reports Credit Cards

Consumer Reports Credit Cards Ratings Survey

Consumers Reports conducted a survey to which over 36,000 readers responded. This survey asked the readers to rate their experiences with various credit cards and credit card companies on a scale of one to one hundred.

According to Consumer Reports, five credit card companies control over 80% of the credit card market share:

• JP Morgan Chase
• Bank of America
• HSBC
• Citibank
• Capital One

These five major credit card companies were represented in the survey, amongst other smaller credit cards.

How the Rating System Works

Participants in the Consumer Reports credit cards survey were asked to rate their experiences with the credit card companies. The meaning of the scores were:

• At or near 100 - The consumer was completely satisfied with their credit card and the credit card company.
• At or near 80 - The consumer was very satisfied with their credit card.
• At or near 60 - The consumer rated their credit card company's performance as fair.
• Below 60 - Represented a dissatisfied or poor consumer rating for the credit card.

Highest Scorers

None of the five major credit card companies received high marks from its cardholders. The highest score went to the USAA Federal Savings credit card, which scored an impressive 95 out of 100 points. Never heard of the USAA Federal Savings credit card? That's because this card was restricted in the past to only active and retired military personnel and their families. Things have since changed and now, anyone can apply for the USAA Federal Savings credit card. The high score for this card was based upon:

• Good interest rates – The USAA Federal Savings credit cards carry an average interest rate of between nine and eleven percent.
• Few billing problems – Consumers reported that they had very few billing problems associated with this card.
• No unexpected interest rate increases – Cardholders reported that their rates were not increased when they made late payments on other credit cards or loans.
• Customer service – Consumers reported that when a problem did arise, it was resolved in a timely and professional manner by USAA Federal Savings customer service representatives.

Lowest Scorers

Here is the list of the lowest scoring credit cards as reported by Consumer Reports:

• JP Morgan Chase
• Bank of America
• HSBC
• Citibank
• Capital One
• Providian Credit Card
• First National Bank of Omaha
• Wells Fargo
• Direct Merchants Bank

These credit cards were rated the lowest by consumers based on the following complaints:

• Unfair late fees – Many consumers complained that their credit card bill was mailed too late in order to get a payment sent in on time. They also stated that they were charged late fees even when they mailed their payment seven to ten days before the due date.
• Unexpected interest rate increases – Cardholders stated that the interest rates for their cards were unexpectedly increased without notice.
• Interest rate increase due to the Universal Default Clause – This clause allows credit card companies to increase your interest rate, usually to the default rate of 29 to 32 percent, if you make a late payment to other creditors. So, say you have never been late on your ABC credit card, but last month you made your car payment late. The Universal Default Clause allows ABC credit card company to increase your interest rate because you were late on your totally unrelated, unaffiliated car payment.
• Poor customer service – Consumers holding low scoring credit cards claimed that issues and problems were not dealt with in a timely and professional manner.

Honorable Mentions

Of the over 61,000 credit cards scored, the following cards, along with a few unnamed credit union credit cards, landed in the top ten:

• Navy Federal Credit Union
• Cabela's
• Nordstrom's
• American Express
• Discover
• National City Bank
• Barclays (formerly Juniper Bank)

Being a Well-Informed Consumer

It is always a good idea to shop around for the best credit card rates and read all the terms and conditions before applying for a new credit card. It is extremely important to be a well-informed consumer when selecting the credit card that best suits your needs. The more you know, the less likely you will be unhappy with interest rates, penalties and fees..