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Tuesday, September 1, 2009

J.D. Power and Associates Reports: Fees and Rates Drive Decline in Overall Credit..

J.D. Power and Associates Reports: Fees and Rates Drive Decline in Overall
Credit Card Customer Satisfaction
American Express Ranks Highest in Credit Card Customer Satisfaction for a
Third Consecutive Year

WESTLAKE VILLAGE, Calif., Sept. 1 /PRNewswire/ -- Driven by a significant
decrease in satisfaction with fees and rates, overall credit card customer
satisfaction declines to a three-year low, according to the J.D. Power and
Associates 2009 Credit Card Satisfaction Study(SM) released today.


The study finds that overall credit card customer satisfaction decreases to
703 on a 1,000-point scale--the lowest level since the study's inception in
2007. Overall satisfaction among credit card customers remains the lowest
across the financial services industries in which J.D. Power and Associates
conducts research, including insurance, banking and investment services.

The study measures customer satisfaction with credit cards by examining six
key factors: interaction; fees and rates; billing and payment process;
rewards; benefits and services; and problem resolution. Satisfaction with fees
and rates drops to 603 points--down 37 points from 2008--contributing
considerably to the decrease in overall satisfaction.

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. The largest decline in satisfaction with fees and rates is among
revolvers--customers who carry a balance from month to month--a drop of 53
index points from 2008. Nearly one-fourth of revolvers report an increase in
their interest rate from 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.

"Overall satisfaction declines 86 index points when a customer incurs a late
fee," said Michael Beird, director of banking services at J.D. Power and
Associates. "Issues with fees also contribute to the high incidence of
problems and complaints in 2009, with 18 percent of customers reporting
problems, compared with 10 percent in 2008."

The study finds that proactive and clear communication is key to improving
satisfaction among credit card customers. For example, when an interest rate
change occurs, satisfaction scores are 97 index points higher when customers
say they were notified ahead of time by the credit card issuer, compared with
when customers say they were not notified in advance.

"These findings raise questions about the effectiveness of the recent
implementation of legislation aimed at helping credit card customers," said
Beird. "It's important to note that 53 percent of customers are unaware of the
current APR on their cards, despite the APR being disclosed on their
statements every month. Unless issuers do more than simply follow the
regulations, customers will likely not be any more satisfied. Communicating
and actually connecting with customers with the same intensity used to acquire
customers in the first place--rather than just complying with regulations--is
critical to customer satisfaction."

American Express ranks highest among credit card issuers for a third
consecutive year with an index score of 762. American Express performs
particularly well in the rewards, benefits and services, and billing and
payment process factors. Discover Card (751) and National City (740) follow
American Express in the rankings.

Effective communication with cardholders that reinforces the value of being a
customer is a key best practice common among the high-performing credit card
issuers. For example, 82 percent of cardholders with American Express are
aware of the benefits and services associated with their card, compared with
an industry average of 70 percent. American Express customers also report
having access to an average of approximately five benefits and services,
compared with the industry average of less than three. This awareness is an
important contributor to the high level of satisfaction with rewards and
benefits among American Express customers (757), compared with an industry
average of 690.

Another differentiator of high performers is the importance of customer
interaction. Discover Card, for example, performs particularly well in
customer interaction through its Web site, automated phone service and
customer service representatives. Discover Card also has a low percentage of
Web site inaccessibility (13%) and an average wait time of only 3.3 minutes to
speak with a customer service representative.

"For credit cards, customer satisfaction is definitely a two-way street," said
Beird. "Customers who actively manage their credit card relationships will
have a more positive experience than those who passively take what they get."

To improve overall satisfaction with credit cards issuers, consumers should
take the following steps:
-- Compare the performance of credit card issuers, starting with
comparative performance ratings at
-- Make sure you are getting a card with the features and benefits that
important to you and that fit how you plan to use the card. For
instance, if you plan to carry a balance on the card, find one with
lowest rates and fees. On the other hand, if you use the card to pay
everything from gas to groceries to vacations and pay off the balances
each month, you may want a card with a rich and flexible reward
-- Educate yourself on the benefits and services available on the card
use them. Customers who are both aware and take advantage of card
features are more satisfied than those who don't.

-- When there's a question about the appropriateness or accuracy of a
fee or rate, request that it be waived or adjusted. Issuers are
to fix mistakes on their part and are willing to make accommodations
valued customers.

The 2009 Credit Card Satisfaction Study is based on responses from more than
9,000 credit card users. The study was fielded in May and June 2009.

Customer Satisfaction Index Ranking
(Based on a 1,000-point scale)

Credit Card Issuer Index Score Power Circle Ratings
------------------ ----------- For Consumers

American Express 762 5
Discover Card 751 5

National City 740 4
Wells Fargo 724 4

Barclaycard 717 3
U.S. Bank 715 3
Chase 708 3
Industry Average 703 3
Citi Cards 699 3
First National Bank of Omaha 689 3
Bank of America 687 3
Fifth Third Bank 685 3
HSBC 682 3

Capital One 671 2
Target Visa 665 2
WaMu 663 2
GE Money 661 2
Credit One Bank 618 2
First PREMIER Bank 616 2

Included in the study but not ranked due to small sample size are Cabela's
WFB, RBS Citizens and Merrick Bank.

About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a
global marketing information services company operating in key business
sectors including market research, forecasting, performance improvement, Web
intelligence and customer satisfaction. The company's quality and satisfaction
measurements are based on responses from millions of consumers annually. For
more information on car reviews and ratings, car insurance, health insurance,
cell phone ratings, and more, please visit J.D. Power and
Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies (NYSE: MHP) is a leading global
information services provider meeting worldwide needs in the financial
services, education and business information markets through leading brands
such as Standard & Poor's, McGraw-Hill Education, BusinessWeek and J.D. Power
and Associates. The Corporation has more than 280 offices in 40 countries.
Sales in 2008 were $6.4 billion. Additional information is available at

Media Relations Contacts:
Jeff Perlman; Brandware Public Relations; Agoura Hills, Calif.; (310)

John Tews; J.D. Power and Associates; Troy, Mich.; (248) 312-4119;

No advertising or other promotional use can be made of the information in this
release without the express prior written consent of J.D. Power and

SOURCE J.D. Power and Associates

Jeff Perlman of Brandware Public Relations, +1-310-589-7749,, for J.D. Power and Associates; or John Tews of
J.D. Power and Associates, +1-248-312-4119,
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