Credit cards with the happiest users

By Liz Pulliam Weston

Credit cards aren't created equal. Neither are credit card companies.

A 2009 consumer survey by J.D. Power and Associates recently confirmed what the credit-savvy already know: American Express makes its customers happier than any other issuer.

"Happier" is relative, of course. The survey of more than 9,000 consumers found a three-year low in customer satisfaction. Despite a 21-point drop, AmEx held its position at the top of the survey, scoring 762 points out of a possible 1,000 when judged on six issues:

• Interaction (such as dealing with customer-service reps or the issuer's Web site).

• The billing and payment process.

• Fees and rates.

• Reward programs.

• Benefits and services.

• Problem resolution.

If we were using an academic grading scale, American Express would have earned a rather average "C." But AmEx and the No. 2 scorer, Discover (751 out of 1,000), are ahead of the industry average (703) and the rest of major U.S. credit card issuers, including Chase (708), Citi (699), Bank of America (687), HSBC (682) and Capital One (bringing up the rear at 671).

Issuer	Score	Issuer	Score
American Express	762	Citi	699
Discover	751	First Nat'l Bank of Omaha	689
National City	740	Bank of America	687
Wells Fargo	724	Fifth Third Bank	685
Barclay's	717	HSBC	682
U.S. Bank	715	Capital One	671
Chase	708	Industry average	703

American Express and Discover have distinctly different approaches to the credit card business and different target audiences. AmEx goes after the affluent crowd that wants plenty of perks. Discover appeals to a more middle-income audience that values simplicity.

The two issuers "come at it in different ways," said Rocky Clancy, J.D. Power's executive director of financial services, "but the value proposition is very clear."

For example:

• American Express gets it right by offering rich rewards programs and special benefits, such as concierge services and discounted tickets to events. American Express users pay the highest fees overall (the annual fee on a gold card is $125, for example), yet customers also report the highest satisfaction with the fees they pay. Clearly, users believe they're getting value for their money.

• Discover, on the other hand, keeps it simple. There are no annual fees, and the benefits center on a cash-back program that Discover pioneered. Discover also manages to irritate its customers less than other issuers do. And when users did encounter trouble, Discover did a better job of resolving problems to the customers' satisfaction

Overall, satisfaction dropped 21 points from the previous year, paced by a 37-point fall in customers' happiness with fees and rates.

The J.D. Power survey, now in its third year (AmEx and Discover ranked highest in 2007 and 2008, too), also turned up a couple of important ways credit card issuers can improve their scores:

• Communication is key. AmEx finds itself at the top in part because cardholders know what they're getting. The survey found that 82% of Amex customers were aware of the company's benefits and services, compared with an overall average of 70%.

• Customers prize interactivity. Discover's owes some of its success in to how it handles customer interaction, through its Web site, phone service and customer service representatives.

The survey also points to ways cardholders can improve their experience. Among them:

• Get educated. Rewards programs are a big draw, but if they don't fit your circumstances, you won't be happy with the results.
• Shop around. Unless you've done your homework, there are probably better rates or rewards programs out there for you.
• Stay on top of your statements. If there's a problem, things are far more likely to work out to your satisfaction if you take the first step to fix it.

Liz Pulliam Weston is the Web's most-read personal-finance writer. She is the author of several books, most recently "Your Credit Score: Your Money & What's at Stake." Weston's award-winning columns appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board and helps middle-class families cope at Building a Brighter Future.

Updated Jan. 6, 2010