Credit cards: Pick the issuer, then the card, to get the best deal

Credit cards come in all different flavors. But customer satisfaction varies by who issues the credit cards, says J.D. Power.

Paul Sakuma/AP/File
This 2008 file photo shows credit card stickers posted at a bowling alley in Palo Alto, Calif. The best way to find great credit cards may be to look for top issuers, then pick the credit card that best suits your needs.

The best way to find a great credit card may be to go about it backwards.

Don't choose a card you like right off the bat. First, pick a great issuer, suggests an analyst with J.D. Power and Associates, a global marketing information services company based in Westlake Village, Calif. Then pick among the issuer's credit cards for the option that best suits your circumstances.

People who carry a balance from month to month would benefit from a low-rate card. Those who pay off their balances should look more closely at reward cards.

Three issuers of credit cards – American Express, Discover, and US Bank – topped J.D. Power and Associates' credit-card satisfaction study this year.

These three shined because they performed well in customer interaction, credit card terms, billing and payment, rewards, and problem resolution. J.D. Power said American Express, which scored 769, "performs well across all six factors that drive satisfaction." Discover Card, at 757, "performs particularly well in the interaction factor."

The new credit card law, with all its protections, could improve the experience of credit-card users even more.

"The consumer realizes these changes are favorable to him," says Michael Beird, director of banking services for J.D. Power. "The question is how much the industry is going to follow the spirit of the law and be more transparent.... There's a real opportunity for some issuers to step up to the plate" and improve the customer experience.

Last year was the industry's nadir in terms of customer satisfaction, according to J.D. Power, which has been rating credit-card companies for four years. Overall satisfaction in 2009 fell to 705 in J.D. Power's 1,000-point rating scale before rebounding to 714 in 2010.

A big reason for the industry's rebound was problem resolution, Mr. Beird says. "The percentage of customers reporting a problem dropped from 18 to 14 percent."

But customer loyalty – the share of customers who say they “definitely will not switch” primary cards in the next 12 months – continued to fall in the survey released in August. Only 22 percent of the more than 8,500 people interviewed in the study said they wouldn't make a switch, down from 30 percent in 2008.

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