J.D. Power and Associates’ 2008 rankings for credit card companies are strikingly similar to last year’s, with American Express leading the herd, followed closely by Discover, a favorite of Smart Balance Transfers visitors. What is striking, however, is that these large issuers are the only major issuers to score above the industry average. Two of the largest credit card issuers, Chase and Citi, ranked below the industry average and came in fourth and seventh place, respectively. Perhaps more surprising, however, is the poor performance of Bank of America, Capital One, and HSBC, all of whom ranked significantly below average, with Capital One and HSBC coming in at the bottom of the pack.
The average score for all credit card companies in the J.D. Power rankings was 724 out of a possible 1000, or essentially a C-. American Express and Discover led the pack with C+ grades, while laggards Capital One and HSBC registered grades in the high D’s.
Although JD Power doesn’t employ a curve on these rankings, we will, as it is important to keep in mind that many people strongly detest their credit card companies, regardless of the quality of service. That said, we’ll focus here on American Express and Discover, the A students of this class.
American Express, which caters to higher income, higher spending consumers, scored very high by virtue of its rewards program, which can come at an annual cost of up to $125 for some cards. However, the depth and quality of these programs more than offsets their cost for those who take advantage.
Discover, which caters to everyday consumers, scored very high on the most important credit card issues. They had nearly 50% less complaints than the average credit card companies and a very strong track record in satisfactorily resolving those complaints. Additionally, its no fee cashback rewards programs also factored favorably in its rankings.
You can compare offers from all of these issuers and apply online at Smart Balance Transfers. Our main site features detailed information on all major credit card offers.
Sources: MSN Money, JD Power Credit Card Ratings
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March 24th, 2009 at 1:26 pm
Ranking Update: A lot of things have changed since these results were published. Based on feedback recieved by Smart Balance Transfers, Discover may very well have dethroned American Express as the number one credit card company. The reason we think Discover is the best credit card company is that it is the only company whose customers have not been sending in angry emails about credit limit cuts and interest rate increases. While this may change at any time, if things continue as they are today, we expect Discover to be named the best credit card company in this year’s poll.
August 27th, 2009 at 1:24 pm
i just received a letter in the mail from discover saying that they are too in fact raising my credit limit just like everyone else. for a while discover did have the lowest purchase interest rate of all my cards but now its being raised to 12.9. still low compared to my citi card rate of 16.9. both of these went up from 9.9 rates. i do think of discover being the best card i own. unfortunately i cannot use discover in italy where i am going for my honeymoon. i like the rewards program and i could really rack up the $$ if they were accepted there.
August 31st, 2009 at 9:32 am
Tom, First off, have a great honeymoon. And, though I saw you weren’t too happy with Cap 1 in your other post, use that card in Italy as it has no international transaction fees. That will save you 3% on everything you charge abroad, including room reservations you make here.
As to the Discover fee increase, they seem to have been quite generous. A 12.9% APR is an enviable rate these days, even for people with good credit. I’ve recently had my rates raised to 13.99% on a card that started out with an 8.9% rate about 2 years ago. And given that most companies have been raising rates to the high teens (and even the high 20′s), I’d say Discover was pretty fair.
December 15th, 2009 at 11:17 am
I too had my Discover rate go from 13 to 25 because I was 2 days late with my payment – which is a first, I might add. I feel, even though it’s within their rights, they should have some leaway with customers who have had and used their cards for many years without ever being late. Just because they can doesn’t mean they should!
December 15th, 2009 at 3:06 pm
Ann,
Its unusual to hear Discover complaints, and this is generally because, as you mention, you did pay late. In the past, a phone call could correct this. You may want to try calling customer service to see if they will change your rate back. Unlike other companies, I wouldn’t be surprised if Discover actually did change your rate.