The credit card customer experience begins with product selection and progresses to a full digital ecosystem of benefits, rewards, payments, card management and transactions. With over 150 distinct consumer credit card products available from leading U.S. card issuers, there is no shortage of choices. Firms are not only competing with the products from other leading financial institutions. They’re contending with industry disruptors like Amazon and the Apple Card, both of which feed off massive existing customer bases.

The credit card customer experience is determined by shifting card product availability

To win top-of-wallet status, card issuers need to keep abreast of continuously changing card customer preferences to ensure they are providing the features deemed most critical. Corporate Insight’s recent Consumer Credit Card Survey found that card holders focus on attractive rewards, trustworthy brand names and low fees when picking a new card account to open. As such, card issuers must ensure they highlight these components to prospects.

With over 150 distinct consumer card products available from leading U.S. card issuers, there is no shortage of choices.

Outstanding credit card debt has reached its highest level in 10 years. But the debt value could decrease as prime lending rate fluctuation causes card APRs to drop. While the Federal Reserve is easy to blame for years of rising credit card rates, card APRs actually rose at a faster pace than Fed rates and wage growth. Our June 2019 report on credit card fees found that fee-conscious consumers have few options. Annual fees are continuing to rise as firms promote premium cards and late and returned payment fees increase

Number of higher-annual-fee cards increased, while cards with fees under $100 and cards with fee waivers decreased over time

COVID-19 forces firms to adjust their digital strategies

As the novel coronavirus outbreak spreads, the financial services industry has had to contend with sudden federal rate changes, local governmental regulations and consumer panic. In response to the uncertainty of these times, banks should provide as much information and assistance to customers as possible. That means clear, widely available and consistent messaging, coupled with tangible relief efforts. A mid-March JD Power survey found that only one-third of respondents had heard from their primary bank about recent market concerns and virus-related information. Only 13% heard from their bank but found the information unhelpful. Among respondents’ biggest concerns, fee waivers and service disruption prevention came out on top. The credit card customer experience has been altered sharply—and potentially irrevocably. Card issuers must adapt.

Firms encouraged digital platform use for account management as branches shut down due to state mandates regarding social distancing and call wait times continued to rise. Nearly every bank introduced a new public site informational page, added notices on both sides of the login and sent emails to card holders. Despite these efforts, the financial services industry is struggling to keep up with demand for accommodations.

Nearly all firms warn customers of longer-than-normal wait times for calls to customer service. A rush to cancel travel plans, paired with the financial hardships of unemployment and general uncertainty about the future, has forced high demand for banking and card-related assistance and customer service. Notably, card holders who booked travel with rewards face an uphill battle for refunds and cancellations. That’s especially true after multiple firms—including American Express and Citi—eliminated travel insurance and related card benefits just last year. Still, of the remaining firms that provide such card benefits, many referred customers to the card insurance carriers. Those carriers in turn informed them that pandemics are not covered by their policies.

To combat this demand issue, card issuers instituted a variety of policies and approaches to encourage card holders to stagger their requests for help or to avoid calling the firm at all.

  • Some card issuers’ cobrand partners and loyalty programs paused all reward travel booking so as to avoid furthering the potential of future cancellations while the end of the coronavirus outbreak remains out of sight
  • Citi notably reinstated its previously removed secure messaging center from the authenticated site solely to provide an outlet for coronavirus-related inquiries, a unique effort to curb call wait times
  • Bank of America, Chase and Citi introduced a digital platform to request a deferral for credit card or loan payments, which helps customers maintain control of their situation and helps the firm decrease incoming calls

Card issuers are also devoting resources to assist at-risk small businesses. Following the passage of the CARES Act on March 27 and the Treasury Department’s subsequent unveiling of the Small Business Administration’s Paycheck Protection Program, many small business card issuers have added public and authenticated site pages to explain their approaches to the loan program.

Chase stands out, as it launched a dedicated online loan application through which small business owners can directly apply for loans starting at $1,000. Other firms, including Bank of America, Citi, Capital One and PNC, introduced dedicated resource pages form which business owners can learn more about the program and how to apply for assistance.

The digital card management credit card customer experience lags behind in a quickly evolving industry

Self-service capabilities have emerged as a core aspect of the digital credit card experience. This is especially apparent given branch closures and high customer service contact volumes. Aside from external forces, firms have good reason to hasten this process. According to our survey, 63% of respondents rank account self-service features “very important” or “extremely important” components of a credit card issuer’s website. More notably, 73% of respondents similarly rated the availability of self-service features on mobile apps. Despite these preferences, firms’ card management capabilities remain inconsistent across firms’ desktop sites, mobile sites and mobile apps.

63% of respondents rank account self-service features “very important” or “extremely important” components of a credit card issuer’s website. More notably, 73% of respondents similarly rated the availability of self-service features on mobile apps.

The importance of card management options is not complicated. Life happens, and cards are stolen, lost and damaged in its wake. To temper the anxiety inevitably associated with lost or unusable cards, firms have slowly implemented features like temporary card locking capabilities—now offered by 73% of the firms we track—and simple online card replacement journeys. A curious trend is that of websites that seemingly present card management links, only then to direct customers to call a customer service line. This is doubly frustrating for newer generations of card holders accustomed to digital management. Not only does it force users to call a customer service line, it is misleading and worsens the overall credit card customer experience.

Like the consumer card space, the small business credit card industry lags in implementing critical card management capabilities across digital platforms. However, the latter industry must also contend with the need to manage employee cards. This need proves unmet. Many small business card sites, like their consumer card counterparts, require clients to contact the firm directly to conduct certain management tasks, calling into question the efficacy of the sites. Generally, the digital arenas for both consumer and small business credit cards leave much to desire for site users seeking to manage their cards with ease.

Alternative personal lending products on the rise

Americans increasingly rely on borrowing, with U.S. consumer debt reaching an all-time high. In response to high interest rates and consumers’ increased reliance on personal loans, many firms have begun pushing alternative personal lending products. Disruptors like Affirm and Afterpay provide installment loans that allow consumers to borrow with lower—and often fixed—rates than those available with a credit card.

Incumbent firms are also getting in on the installment loan action:

  • American Express introduced Plan It in August 2017, which allows card holders to finance purchases of $100 or more with a flexible duration and a set monthly payment included in the minimum payment due
  • In 2019, Citi rolled out a similar product in its two Flex Plan options: Flex Pay and Flex Loan
    • As with Plan It, card purchases of at least $100 are eligible for Flex Pay at a fixed APR
    • Flex Loan, on the other hand, allows card holders to borrow money from their credit line and pay it back at a fixed rate significantly lower than the cash advance APR
  • Also in 2019, Chase announced My Chase Plan and My Chase Loan, which will closely mirror Citi’s offerings; the programs will be available to existing Sapphire, Freedom and Slate card holders

Flex Loan allows card holders to borrow money from their credit line and pay it back at a fixed rate significantly lower than the cash advance APR.

Other fintechs and disruptors are setting their sights on this space as well. Upgrade recently launched the Upgrade Card, which functions like a credit card. Customers can use it for retail and online purchases, but it has a pay structure reflecting that of a loan. Every month, the firm breaks down the current balance in subsequent 12-, 24- or 36-month mandatory payment schedules. An area where the Upgrade Card clearly stands out is rewards. Card holders earn 1% cash back on all payments. By contrast, the American Express, Citi and Chase loan products are not reward-earning, a missed opportunity.

Credit and debt empowerment drives new digital features for the credit card customer experience

Letting users review recent credit card transaction history online is a no-brainer. Respondents to our survey value the archive length more than any other card-activity-related attribute. Two-thirds of respondents ranked access to at least 18 months of card activity as “very important” or “extremely important.” Yet, our October 2019 report on desktop site transaction history found that more than half of the firms covered provide 13 or fewer months online. Notably, some firms are developing new digital features to take card activity archives to the next level. For example, they’re using artificial intelligence to enhance traditional tools and providing more educational and credit wellness resources.

New or updated mobile apps are bolstering transaction history, spending analysis and budgeting tools with proactive insights based on past spending. U.S. Bank launched a redesigned app in 2019 that claims to deliver more than 100 AI-driven cautionary, proactive, actionable and suggestion-based insights, personalized for each user. More commonly, firms present information via AI-powered virtual assistants like Bank of America’s Erica and Capital One’s Eno. These bots offer customers ongoing guidance and interactive help related to recent transactions and spending.

Respondents highly value the ability to view credit scores and the factors that impact them. Over half rank this attribute as “very important” or “extremely important.” Firms already succeed in this area. According to our quarterly Capabilities Matrix, every coverage group firm provides credit scores online. However, the relevant resources offered vary. Just three firms (27%) offer Excellent credit score resources as designated by our Benchmarking Audit software. Half of firms earn only a Fair or Poor rating.

Our July 2018 report on credit card management tools highlights that all firms but one provide public site education centers. Yet just three (27%) offer these centers on the authenticated site. Credit health and financial wellness information presents an area ripe for expansion in the credit card customer experience.

Aside from mobile app card payment functionality expansion, many payment enhancements now occur for heightened security to provide customers with peace of mind in the age of hacks. As mobile payment adoption is low in the United States compared to other countries, firms are taking different approaches to offering virtual account numbers and therefore more security. Apple Card debuted with a unique solution where each card is associated with three individual and distinct card numbers: one associated with the physical card, an Apple-Pay-specific number and a third card number that can be used for online purchases. Firms like Bank of America, Capital One and Citi also provide virtual card numbers for more secure online purchases, but rarely do we see these practices as a main selling point for the card product.

In terms of physical credit card changes, every Credit Card Monitor coverage group firm issues cards with EMV chip technology. Following widespread international adoption, a growing number of firms—including American Express, Bank of America, Capital One, Chase, Discover and Wells Fargo—began offering cards with contactless, tap-to-pay functionality in the past year, and 78 of the top 100 U.S. merchants are now equipped to handle contactless card payments. Maintaining top-of-wallet status will require credit card issuers to innovate both in terms of their physical cards and their online card management functionality.

Physical and digital card enhancements are improving the payment experience

Card issuers have room for growth in the mobile app card payment space. Despite nearly ubiquitous one-time and automatic card payment functionality on desktop sites, many mobile apps do not include repeating payment management or even future-dated payments. Firms will need to bolster their mobile platforms accordingly. Younger respondents to the 2019 Consumer Credit Card Survey expressed increasing usage of mobile apps and decreasing usage of desktop sites compared to older users.

Younger users manage credit card accounts from mobile apps more frequently than older generations

Thinking about your primary credit card, how do you typically access and manage your account from a digital standpoint?

Aside from mobile app card payment functionality expansion, many payment enhancements now occur for heightened security to provide customers with peace of mind in the age of hacks. As mobile payment adoption is low in the United States compared to other countries, firms are taking different approaches to offering virtual account numbers and therefore more security.

Card debuted with a unique solution where each card is associated with three individual and distinct card numbers: one associated with the physical card, an Apple-Pay-specific number and a third card number that can be used for online purchases. Firms like Bank of America, Capital One and Citi also provide virtual card numbers for more secure online purchases. But rarely do we see these practices as a main selling point for the card product.

In terms of physical credit card changes, every coverage group firm issues cards with EMV chip technology. Following widespread international adoption, a growing number of firms—including American Express, Bank of America, Capital One, Chase, Discover and Wells Fargo—began offering cards with contactless, tap-to-pay functionality in the past year. And 78 of the top 100 U.S. merchants are now equipped to handle contactless card payments. Maintaining top-of-wallet status will require credit card issuers to innovate both in terms of their physical cards and their online card management functionality.

Firms neglect small business card products and sites, leaving room for vast innovation

The small business card industry is relegated to the sideline when it comes to innovation. Firms tend to focus on consumer card products, sites and mobile apps, upon which they then base small business card counterparts. In the meantime, a massive opportunity goes to waste. Small business card sites age and become cumbersome to use, so small business card holders revert to their consumer cards, which present better reward structures and easier online management options. A 2019 survey from WalletHub even highlights that eight in 10 small business owners think their small business cards should offer the same, if not better, reward opportunities than their personal cards.

In the meantime, a massive opportunity goes to waste. Small business card sites age and become cumbersome to use, so small business card holders revert to their consumer cards, which present better reward structures and easier online management options.

The card space is not indicative of small business products as a whole, though. In fact, small business banking innovations continue at full speed ahead. Bank of America, for instance, offers the Business Advantage 360 experience. To aid business owners in managing cash flow, the platform offers account integration features, in-depth projections and a streamlined view of transactions, expenses, credits and debits. While the product includes integration of small business credit card accounts, the bank requires customers to have a small business bank account in order to take advantage of its features.

Firms can seize upon the current momentum in the consumer card space and in the business banking space. Features like receipt matching can be helpful for small business owners who use their personal cards for business expenses. Still, simply offering cash back at Staples won’t cut it for small business card holders anymore. Firms should recognize the need to sweeten the deal by providing proportionate rewards for the level of business conducted and by homing in on the types of expenses that businesses usually accrue.