Good credit key to satisfaction with credit cards, survey shows

Money can’t buy happiness – but can good credit?

According to a credit card satisfaction survey by CardRatings.com, people with good credit tend to be happier with their credit cards.

There are good reasons for this. Having a good credit score can make you eligible for more favorable credit card terms. Those better terms can make your credit card usage more affordable. It can also enable you to choose credit cards that are better suited to your needs.

Understanding how credit score can affect your credit card terms can help you take full advantage of good credit. If you don’t have a good credit record, knowing the impact might motivate you to take the steps necessary to improve your credit score.

Credit scores and credit card satisfaction

CardRatings polled over 1,600 credit card customers to gauge their satisfaction with their current cards. One question the survey asked was: “Are you satisfied with the credit cards you currently have?”

Survey respondents rated their satisfaction on a scale of 1 to 5, with 1 being “very unsatisfied” and 5 being “very satisfied.”

Overall, the average score was 4.17. This suggests that on the whole, people are satisfied with their credit cards.

However, the survey found that customer experiences tended to differ according to the respondents’ credit scores. Here’s a breakdown of average satisfaction ratings by credit score ranges:

These results show that people with the best credit scores tend to be happiest with their credit cards. The top credit score range of 800 to 850 had an average satisfaction rating of 4.42. This is the highest average rating of any score range, and well above the average of 4.17%.

It’s also notable that the average satisfaction score the drops as you move through each of the three lower credit score ranges. People with credit scores of 669 or lower had an average satisfaction rating of 3.63, more than half a point below the overall average. Finally, people who didn’t know what their credit scores were also tended to be less happy with their credit cards, with an average satisfaction rating down near that of the lowest credit score group.

Good credit leads to better customer experience with credit cards

Why are people with good credit scores so much happier with their credit cards? There may be a few reasons:

1. Lower interest costs. People with strong credit scores tend to qualify for better credit card interest rates. This can make a huge difference in the cost of using credit. The most recent CardRatings interest rate survey found that interest rates being offered ranged from a low of 17.49% to a high of 35.90%. So, being able to qualify for the best offers can save you over a dozen percentage points of interest when you carry a balance on your card.
2. More choices. Qualification standards for credit cards vary, with some being a lot tougher than others. Since people with excellent credit can meet even the highest standards, they have a wider choice of credit card offers available. This allows them to choose the cards that best suit their usage. It also lets them qualify for the most attractive credit card offers.
3. No security deposit is required. People with very low credit scores may only qualify for a secured credit card. This requires you to maintain a deposit with the credit card company. That restricts access to your money, which can create hardships in some situations.

Good credit scores allow you to qualify for more and better credit card offers. Also, people who have the best credit card usage habits are likely to have higher credit scores. Making payments on time and keeping balances low are likely to lead to fewer negative experiences, like late fees or high interest charges. In turn, those same habits can contribute to better credit scores.

Choosing the best credit cards for good credit

Since credit card companies offer the best terms to people with good credit, you should keep this in mind when you shop for credit cards.

If you have a high credit score, concentrate your search on credit card offers that are geared towards people with good credit.

Also, as time goes on, look for opportunities to upgrade your credit cards. For many people, their credit scores improve over time. As you build a stronger credit history, you might qualify for better offers than when you were first starting to use credit. If so, don’t continue to settle only for cards you qualified for before you improved your credit. You deserve to be rewarded for that improvement.

 ➤  SEE MORE:Best credit cards for excellent credit scores

Tips for improving your credit score

If you’d like to qualify for the best credit card offers, here are some things you can do to improve your credit score:

• Build a history of on-time payments. Payment history is the single biggest factor in determining credit scores. So, just being sure to make each payment on time will start you on the path to a good credit score.
• Keep your balances low. Whenever possible, make more than the minimum payment required on each credit card bill. This will keep your balances low, which is a positive factor in credit score calculations.
• Be careful about opening and closing credit card accounts. The age of your credit accounts is also a factor in calculating credit scores – the older the better. So, pick your spots when it comes to applying for new credit. Also, even if you no longer use an old account, think twice before canceling it. As long as the account doesn’t charge a regular fee, keeping an older account active can help your credit score at no cost to you.
• Keep track of your credit score. The survey found that people who didn’t know their credit scores had satisfaction ratings almost as low as people in the bottom tier of credit scores. Being aware of your credit score can help you identify bad habits that are pulling that score down.

Good credit habits can feed on themselves. As your credit score improves, you can qualify for better credit card offers. In turn, this can provide you with the motivation to keep your credit score in top shape.