Perks Abound For Black Credit Cardholders As Issuers Battle For New Customers

It's a good time to be an African American credit cardholder, say some

There are fabulous sign-up bonuses for credit cards that can potentially add several hundreds of dollars to your pocket.

 

(Image: iStock/AndreyPopov)

 

For customers who travel on a specific airline, there are perks including free checked baggage, priority boarding, and free companion tickets. These perks can easily offset the annual fee plus more if the cardholder flies a few times annually.

For annual fee cards, there are issuers who may waive the fee in the first year. Users with an existing balance on another card may be able to get a low-interest rate, or no-interest for 12 to 18 months.

Welcome to the nation’s credit card industry, where black credit card users can now benefit greatly from increased competition among credit card providers. Forces such as rising interest rates and strong consumer spending are prompting credit companies and banks to offer more incentives to sign up new customers. An incentive fueling the high levels of overall satisfaction among credit card customers is cash-back rewards, based on the J.D. Power 2017 Credit Card Satisfaction Study.

A  ‘Great Time’ To Be A Credit Cardholder

 

“It’s a really good time to be a credit card customer. Overall satisfaction is up across the board, and growing numbers of card companies and regional banks are coming to the market with new products that offer rich sign-up bonuses, increased cash-back rewards and new benefits,” says Jim Miller, senior director of the banking practice at J.D. Power.

“The key for issuers in this highly competitive marketplace is to develop strategies that increase customer satisfaction, which, in turn, decrease attrition and promote higher levels of credit card spend.”

Takeaways From the J.D. Power Study Cardholders Should Know

 

  • Overall customer satisfaction with credit card issuers this year reached its highest level in the study’s 11-year history (802 on a 1,000-point scale). Scores were highest for cards that offer cash-back rewards programs. Conversely, airline cards and store-branded Visa/MasterCard reward credit cards ranked lower for satisfaction among reward cards.

 

  • Credit issuer websites and mobile offerings are becoming more prevalent on the cardholder satisfaction front. Satisfaction is only 780 when customers don’t use those channels. Satisfaction grows to 807 when folks use online only and rise to 827 among those who use mobile only. Satisfaction reaches its peak (834) when customers use both online and mobile.

 

  • Customers over 40 are becoming more satisfied, while satisfaction scores for customers under that age is dropping. Younger customers are more apt to use many cards for spending and more likely to switch from their main credit card. Better rewards is a reason older customers (44%) are likely to switch cards, while greater benefits is a factor why younger customers (38%) are most likely to change.

 

  • When it comes to credit card issuers, American Express (835) ranks first in customer satisfaction, Discover (827) and Capital One (808). This year’s study includes responses from 22,896 credit card customers, including 1,246 African Americans.

Blacks Most Satisfied With Credit Card Companies

 

Interestingly, black cardholders are the most satisfied with their credit company for several reasons, including customer service and perks offered. They are followed by Latino/Hispanic 816, White/Caucasian 803 and Asian/Asian American 781.

Miller says credit card issuers are also focusing on increasing their benefits, including most offering a free credit score, travel-related insurance, and other services. Some cards offer discounts at specific retailers. Miller added mobile apps are making it very easy for cardholders to see their transactions and balances in real time.

“There have never been more credit card choices so there is likely a good card that fits each customer’s needs,” Miller says.