Consumers in the United States generally believe their credit card companies treat them fairly but anticipate some changes under the Credit CARD Act affecting their overall card usage, new research from New York-based management-consulting firm Auriemma Consulting Group suggests. Auriemma conducted the research through an online survey in August.
Results show 59% of the 420 credit card users participating in the survey, when reviewing information provided on their monthly statements, believe their credit card companies treat them fairly, while 37% of respondents had a neutral opinion, claiming their card companies treated them neither fairly nor unfairly. Only 4% of survey participants reported they were treated unfairly, according to the report.
The report also shows that 57% of respondents believe they are treated fairly when calling customer service and 54% believe they are treated fairly when reviewing information provided in e-mails, letters or phone calls.
About 49% of respondents reported fair treatment when notified of annual percentage rate changes while 45% believe they are treated fairly when making a complaint regarding services received from their issuer, according to the report.
Additionally, 74% of respondents reported no change to their opinion of their credit card company over the past year, while 26%.
Many consumers attribute unfair treatment to “issues when making a complaint about service and notification of increased interest rate and credit line modification,” Scott Strumello, Auriemma associate, tells PaymentsSource. “These two issues are always at the top of the list of unfair treatment.
“Most consumers view their agreement as a contract, so when an issuer changes its mind and modifies the terms consumers see this as unfair treatment,” Strumello says.
However, of changes made to credit cards such as increased interest rates, minimum payments and balance transfers, most respondents will either use their cards less or with the same frequency, according to Auriemma.
Moreover, 11% of respondents cite an annual fee increase or addition as a reason to cancel an account, while 7% said the implementation of an inactivity fee would cause them to close their account.
Consumers should be able to see the changes to their accounts,” Strumello notes. “And under the new law, issuers have to give consumers enough notice in case a consumer wants to take his business elsewhere, he adds. Most consumers appreciate the ability to see any changes to their account, especially if it affects the overall bill, Strumello contends.
About 26% of respondents believe providing clear information when terms and conditions change is a sufficient means of communications, according to the report.
While most consumers agree they are treated fairly by their credit card companies, consumers carrying balances on their cards will be negatively affected by some of the changes under the Credit CARD Act such as higher interest rates, Strumello says.
Financially stable consumers “are less likely to have issues paying or repaying while consumers carrying balances will be negatively affected as they will notice the impact of higher interest rates on their bills, Strumello explains.
In fact, about 48% of respondents said a higher interest rate would affect the ability to pay their bills while 37% said it would have no affect, according to the survey results.
Overall, while consumers believe credit card companies treat them fairly, because of increased interest rates along with other changes under the recent legislation, Auriemma found that 48% of respondents are now spending less on credit cards and shifting spend from credit to debit cards.