US Consumers Respond to Changes in Credit Card Terms and Conditions
comScore has released its Online Credit Card Report: 2009 Edition providing a view of the online credit card industry with a particular focus on how the economic environment, government regulation, and industry response have affected consumer behavior and confidence. According to comScore, "the report revealed that more than two-thirds of consumers have responded to changes in their credit card terms and conditions by reducing spending behavior, terminating the account or switching brands."
"This past year has been very volatile in the credit card industry, both for issuers and consumers," said Kevin Levitt, comScore vice president. "With the economic environment and regulatory mandates prompting issuers to make product adjustments, an already financially-sensitive consumer is responding with dissatisfaction and an increasingly negative perception of their card issuer. Understanding the current sentiment and common concerns among consumers will be critical to success over the next year."
The economic downturn combined with revived transparency regulations in the credit card industry have caused issuers to make changes to consumers' credit card accounts. The comScore report found that half of the users have noticed direct changes to their accounts made by their issuer including an increase in APR/interest rate, reduced credit limit, additional fees, etc.
These changes have caused many consumers to lose confidence in their issuer and take direct action. Among survey respondents who have noted such variations in the last year, 55 percent indicated that they had decreased the amount they spend using that particular card, while 27 percent no longer use that card for purchases. Twelve percent of respondents have closed that account, while 9 percent applied for a new credit card with another issuer and 8 percent transferred their balance to another card. Just 3 percent reported spending more on that card.
"In the current economic environment, many customers are taking firm action in response to changes made by their credit card issuer," added Mr. Levitt. "Issuers must work to provide additional value or risk consumer backlash in the form of reduced card spending or even brand defection."
To download a complimentary copy of the comScore Online Credit Card Report: 2009 Edition, please visit: http://www.comscore.com/Press_Events/Presentations_Whitepapers/2009/2009_comScore_Online_Credit_Card_Report