A recent survey seems to confirm what issuers have long known but don't talk about: cardholders have little awareness of changes in their cardholder agreements.
When consumers are cognizant of changes, however, the majority who say they had a change in their perception of the issuer said the change made their opinion of that issuer worse, according to the May survey by Westbury, N.Y.-based Auriemma Consulting Group Inc.
In the telephone survey of 832 consumers who use one card most frequently, 33% said yes when asked if at least one of their cards had been repriced or had its terms modified. (In its survey report, ACG said the actual frequency of changes is much higher, though it didn't have an estimate). Some 60% said no and 8% didn't know. ACG rounded some of the survey results.
Among the 272 respondents who reported having terms or pricing changed, 57% said the change did not affect their opinion of the issuer. But among the 42% who said there was an impact, 60% said their opinion of the issuer changed for the worse while 36% said it was better.
That doesn't surprise C. Scott Strumello, an associate at ACG.
"We didn't specifically ask what was the cause or reason for the repricing, but I would say in the majority of cases when you're getting a change of terms ... the terms are seldom to cardholder's favor."
The fact that well over half of respondents had no change in their opinion of the issuer after a change of terms probably indicates that many people don't read the issuer's notice, or don't understand the notice, Strumello says.
The reasons for that may include the legalese of the notices and the difficulty of assessing the importance or degree of the change unless the new notice is read in conjunction with earlier cardholder agreements or change-of-term notices, according to Strumello.
"Unless their APR is going up by a dramatic amount, it's not something they notice until much, much later," Strumello says.
Those who transfer balances seem to have the best recall of term changes or repricing (chart).
Authoritative analysis and perspective for every segment of the payments industry
Authoritative analysis and perspective for every segment of the industry
Have an account? Sign In