Canada Credit Card Customers Spend Less But Are More Satisfied, JD Power Says
TORONTO – (COMMERCIAL THREAD) – A year and a half after the start of the COVID-19 pandemic, credit card customers in Canada are more optimistic about their personal financial prospects and the economy while adjusting to new realities and reducing their credit card spending, according to the JD Power 2021 Credit Card Satisfaction Study in Canada,SM released today. Almost a third (30%) of credit card holders cite high confidence (rating 8-10 on a 10-point scale) in their personal financial outlook – up from 20% in 2020 – and 19% express a vision positive economy, up from 11% in 2020. But even with this renewed optimism, customers are using their credit cards with caution, with average monthly spend on major cards declining to $ 1,155 from $ 1,200. year after year. This trend echoes a broader spending cut in 2021 for all types of payments, including cash and debit cards.
Despite the decline in credit card spending, customers are more satisfied with their primary credit card issuer, as the average satisfaction score is 766 (on a 1,000 point scale) compared to 764 a year ago. According to the study, the main attributes that improve customer satisfaction are the communication of benefits and the range of benefits and services offered, with more customers being offered account protection, return guarantees. purchase and no annual fee.
“Many Canadian credit card issuers are faring significantly better in terms of improving overall customer satisfaction compared to their US counterparts,” says John Cabell, Director of Banking Intelligence and Payments at JD Power. “Increased customer satisfaction amid the pandemic is the result of an effective industry response to changing customer needs and strong communication in these unprecedented times, coupled with customer wisdom. with the use of cards. ”
Here are some of the key findings from the 2021 study:
- Satisfaction improves with the functionality of the card: Customer satisfaction is higher this year compared to 2020 with both the benefits and services (+5 points) and the rewards (+1) linked to their cards. The efforts of issuers to communicate and adapt these features to the disruption of customer spending habits during the pandemic have mostly paid off with cardholders. Notably, rewards satisfaction, on average, improves slightly for many types of credit cards, including cash back, retail affiliate cards, and even travel cards. That said, it’s still a good time for customers to revisit the alignment of their personal spending with the credit card they use most often.
- No annual fee means greater satisfaction: More than a fifth (22%) of customers this year say they changed their primary card in the past 12 months to avoid paying annual fees, up from 16% in 2020. At the same time, customer satisfaction with a credit card no charge is much higher with their card issuer (747) than with customers paying an annual fee (707).
- Perception decreases with financial difficulties: More than a fifth (22%) of clients say they are financially vulnerable and 11% say they are financially stressed. Among the most financially vulnerable people who struggle to pay their bills and have no planning, only 18% say their credit card issuer is acting in their best interest compared to 31% of those who say they are financially healthy . Financial health also affects brand promotion, with the Net Promoter Score®1 among the financially healthy group nearly eight times higher than that of financially vulnerable cardholders (38 versus 5, respectively, on a scale of 100).
- Redemption of rewards is delayed and use of travel benefits decreases: Despite the overall improvement in reward satisfaction, twice as many customers (22%) this year deferred using rewards for more than a year, compared to 11% a year ago. Unsurprisingly, travel benefits declined in the use of insurance (-5%), lounge clubs (-5%), free checked baggage and no exchange fees (-3%). The extended rewards redemption timeline had a moderating effect on customer satisfaction, especially among those who used travel-related rewards (759 in 2021 versus 763 in 2020).
- Call center issues: Call centers continue to be the industry’s Achilles heel when it comes to customer satisfaction. While the study shows a decrease in the average number of contacts to a call center (1.8 in 2021 versus 1.9 in 2020), customer satisfaction with call centers has decreased to 794 versus 811 il a year ago. This is an area where card issuers should pay more attention, particularly when it comes to the effectiveness and clarity of the representative over the phone, with more clients this year noting cases of transfer, bet. waiting, requesting the same information repeatedly or having difficulty understanding the representative as the last time. year.
Ranking of studies
Mandarin Bank ranks first in overall customer satisfaction for a third consecutive year, with a score of 822. Canadian tire (800) ranks second and PC Financial (796) ranks third.
The Credit Card Satisfaction in Canada Study measures the primary credit card issuer satisfaction of cardholders. The study measures performance in six factors critical to the customer experience (in alphabetical order): benefits and services; Communication; credit card terms; customer interaction; key moments; and rewards. The study was conducted in May-June 2021 and includes responses from 6,699 cardholders who have used a major credit card in the past three months.
For more information on the Canada Credit Card Satisfaction Study, visit https://canada.jdpower.com/financial-services/canada-credit-card-satisfaction-study.
See the press release online at http://www.jdpower.com/pr-id/2021112.
About JD Power
JD Power is a global leader in consumer information, advisory services, data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has for more than 50 years provided incisive industrial intelligence on customer interactions with brands and products. The world’s largest companies in major industries trust JD Power to guide their customer-centric strategies.
JD Power has offices in North America, Europe and Asia-Pacific. To learn more about the company’s commercial offerings, visit https://canada.jdpower.com/.
About JD Power and advertising / promotional rules: www.jdpower.com/business/about-us/press-release-info
1 Net Promoter®, ® Net Promoter System®, ® Net Promoter Score®, ® NPS® and the NPS related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.