American Express has been dethroned.
For the first time in nine years, Discover was named the card provider with the highest satisfaction ratings from consumers, according to market research firm J.D. Power. It beat out American Express, which had ranked first in the annual survey of 20,000 credit card customers.
Discover has been inching up in the rankings, tying with American Express for the top spot last year and coming in second the year before. Cardholders may be responding to new perks being offered by Discover, which sweetened its credit card rewards program and made it easier for people to use their cash rewards, said Jim Miller, senior director of banking services at J.D. Power. “Discover has really focused on making it easier for people to actually use what they earn,” he said.
Discover and AmEx have approximately 36 million and 42 million active cardholder accounts, respectively, according to PaymentsSource.
For example, cardholders who link their credit cards with their Amazon.com accounts are reminded at checkout that they can pay for all or part of the purchase using the cash rewards they’ve earned, Miller says. (Cardholders also use the Cashback Bonus to pay down their balance, buy gift cards or to make a donation.) Some members may also appreciate that Discover doesn’t charge annual fees, but still offers rewards on most of its cards.
Discover was also one of the first credit card companies to offer consumers free access to their FICO credit score, a perk that more credit card companies now offer. It recently rolled out a feature that allows account holders who have misplaced their cards to put a temporary freeze on purchases, cash advances and balance transfers.
AmEx ranked second this year, and Chase came in third. Capital One recorded the largest improvement from last year, gaining 25 points in its rating.
Will Tsang, a spokesman for American Express, said that while the issuer “didn’t come out on top this year,” feedback from customers shows that cardholders are still satisfied with their accounts. The company, which branded its card as something coveted by affluent consumers, is making changes to appeal to a broader customer base, Miller said.
AmEx rolled out more credit cards in the past year that do not charge an annual fee but still offer rewards programs, Tsang said. One, the Blue Cash Everyday Card, gives new users a statement credit of $100 if they spend $1,000 in three months. Cardholders can also earn cash back from smaller purchases, such as 3 percent at supermarkets and 2 percent at gas stations.
As the economy improves, consumers are feeling better about their credit cards overall and are more confident about their finances, Miller said. They are also being more diligent about paying their bills on time and paying their balances in full each month, he said.
The last spot went to Synchrony Bank, which runs some of the credit cards linked to retailers. Consumers may be giving the bank low ratings because retail credit cards tend to come with higher interest rates and rewards are often restricted for use at one retailer, Miller said.