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Tuesday, September 1, 2009

Credit card users unhappy about higher rates and fees

A few dollars here, a higher rate there. It all adds up to an angry batch of credit card consumers.

Indeed, overall credit card customer satisfaction has declined to a three-year low, according to an annual survey released Tuesday morning by J.D. Power and Associates. The unhappiness is the lowest since J.D. Power started the survey in 2007.

The twin culprits: Higher interest rates and fees.

"Nearly 20 percent of customers report experiencing an increase in their interest rate since 2008, almost double the 10 percent who said the same in 2008," J.D. Power said.

The largest decline in satisfaction with fees and rates was noted among those who carry revolving balances from month to month. Of those customers, "nearly one-fourth of revolvers report an increase in their interest rate fom 2008. In addition, late payment fees, which have the greatest negative impact on satisfaction, were incurred by 14 percent of customers, compared with 11 percent in 2008."

The study found that "proactive and clear communication" about pending rate and fee hikes is key to improving customer satisfaction.

J.D. Power also ranked the credit card companies, and American Express topped the satisfaction list for the third consecutive years. Discover Card was second.

Bringing up the bottom: GE Money, Credit One Bank, and finally, First Premier Bank.

To improve overall customer satisfaction, J.D. Power said consumers should:

-- Compare the performance of credit card issxuers, starting with ratings.

-- Make sure you are getting a card with the features and benefits that are important to you.

--Educate yourself on the benefits and services available on the card

--Request that a questionable fee or rate be waived or adjusted. Card issuers are anxious to fix mistakes and are willing to make accommodations.

The studey was based on responses from more than 9,000 credit card users in May and June 2009.

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