Consumers Have Long Memories, Short Fuses With Credit Card Companies

Consumers have the memory of an elephant when they feel like they’ve been wronged by a credit card company. Much more so than other service providers like grocery stores or even health insurers.

Maybe that’s because of all the debt credit card customers are piling up – and are exhaustingly trying to pay down. According to the Federal Reserve’s March G.19 Report, U.S. consumer revolving debt (primarily credit card debt) dipped below the $800 billion level, to $798.6 billion, a 3.3% drop for the month of Feb. 2012. That’s the second-lowest debt level since Oct. 2004.

Both January and February saw declining credit card debt, as opposed to 2011, when revolving debt largely rose on a month-to-month basis, the Federal Reserve reports.

Altogether, U.S. consumer credit card debt has fallen from $957 billion in 2008 to $798.6 billion today. Yet a new study shows that credit card consumers are still seething about all that debt, and how they perceive to have been treated by card issuers (especially over issues like late payment fees, pullbacks on rewards programs and higher interest rates).

The study, from Temkin Group’s 2012 Forgiveness Ratings, says the credit card industry is the industry least likely to earn “forgiveness” from consumers.

The Forgiveness Ratings tracks consumer sentiment on 18 industries, and 206 specific companies, including retailers, parcel delivery services, airlines, banks and credit card companies.

What did the 2012 rankings find? Primarily, that industries like insurance carriers, investment firms, banks and fast food chains all ranked well ahead of credit card firms in terms of the all-important “forgiveness” factor.

As Temkin puts it, “Every company makes mistakes now and then, but how willing are customers to forgive the company when it happens? Forgiveness is a valuable asset that companies earn by consistently meeting customers’ needs.”

According to Temkin, that forgiveness factor is calculated in three ways:

  • Functional: How well do experiences meet customers’ needs?
  • Accessible: How easy is it for customers to do what they want to do?
  • Emotional: How do customers feel about the experiences?

Apparently, credit card companies failed on all fronts, as consumers reacted strongly against forgiving carriers for what they perceive to be toxic business practices.

Common gripes by consumers against card companies are shadowy and onerous rate changes, “gotcha” late payment fees and penalties, and the harsh reality that, every month, a credit card bill reminds the consumer of purchases long since passed but not yet paid.

Taken together, those issues tend to breed resentment among consumers toward card providers, and that’s exactly what the Temkin study seems to be saying.

For the record, grocery store chains, appliance makers and retailers topped the list of “forgivable” industries, according to Temkin. Joining credit card issuers at the bottom of the list were health insurers, cable and Internet providers and banks.

Brian O’Connell

Post to Twitter

Comments are closed.