Best & Worst Credit Cards By Consumer Reports

In the October issue of Consumer Reports, the magazine rated some credit card issuers based on user experiences on the company’s customer service, fees, and interest rates.

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Of some 21 issuers surveyed in their study, USAA Federal Savings, a credit union for military personnel and their family members, ranked the highest customer satisfaction, followed by Naval Federal Credit Union. For some of the country’s largest Visa and MasterCard issuers, such as Citibank, Bank of America, Chase, MBNA, and Capital One, they found their places at the other end of the specturm. Ranked from 13 to 18, they fell behind independent issuers American Express (6) and Discover (7) in the rating.

What credit card users complained most in the study are the ever increasing fees and sinking customer service. For example, the magazine noted that late fees that credit card companies charged for late payment have more than doubled in the past 12 years, up from $12 in 1995 to $28 in 2006 on average, and the trend is continuing. On the other hand, problems with customer services are on the rise. Nearly 27 percent participants in the study reported that they have experienced lengthy waiting time, confusing navigation menu, or unsatisfactory results. That’s not a surprise to me. Even with American Express, one that’s known for its reputation in customer service, my problem of the unauthorized charges placed on my card has been dragged on for more than half a year without any result.

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So how to avoid all these hassles? You definitely don’t want to get a Capital One “No Hassle” card as it is probably one of the worst cards you can have, according to the review. What the report suggested was, if possible, to get a credit card from credit union because they are not as greedy as the Wall Street firms that are driven by profits and stock prices.

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7 Responses to “Best & Worst Credit Cards By Consumer Reports”

  1. The Finance Buff |  Sep 17, 2007 at 10:00 pm

    USAA Federal Savings, a credit union for military personnel and their family members, ranked the highest customer satisfaction

    USAA Federal Savings is not a credit union. It’s a savings and loan. The full name is USAA Federal Savings Bank.

  2. Cindy |  Sep 18, 2007 at 12:59 pm

    I absolutely love USAA, and particularly their extraordinary level of customer service and flexibility.

    Just to add to the unusual nature of USAA, its core (the insurance end) is technically an inter-insurance exchange…. that is, it is not a corporation. One of the huge benefits of this is that they profit share with members.

    I think it’s amusing that in the last 5-10 years, folks-at-large have been getting used to internet banking with no bricks and mortar branch… USAA has been doing the long-distance banking thing (via mail and phone, now internet) for decades. My family have been members since the 60′s…

    Membership is quite restricted (military members and children of current USAA members, and a few other gov organizations), so if you get a chance to become a member, do it!

  3. ada |  Sep 20, 2007 at 8:41 am

    I am surprise, why is “Capital One” No Hassle card not recommended? I am planning to apply for one because it pays 3 miles/dollar spent. And I can use it for any airlines. Am I missing something?

  4. Cindy |  Sep 20, 2007 at 12:40 pm

    ada, the Consumer Reports study was based on user experiences, not just their relative levels of reward or APR. I think this study reflects the hard-to-quantify customer service angle. As an example, I know one of the things they specifically asked for was if the user had any mistakes in billing and how it was resolved.

  5. Sun |  Sep 20, 2007 at 3:28 pm

    TFB: I will have to check that as it seems Consumer Reports kind of categorizes USAA as a credit union.

    Cindy: Thanks for the information on USAA. I guess it’s the nature of USAA that makes it special and different from other commercial banks which focus more on their own profits.

    Ada: If you look at the product itself (and only the product), Capital One’s 3 miles per dollar is probably the best offer among travel cards out there. And it also has 12-month 0% APR introductory period as I remember. It would be fine if you just use the card, pay your balance in full every month, and don’t run into any problem with them. From what I heard, Capital One is not very good in customer service and very aggressive in fees, though I don’t have any card with them myself.