Overall, Americans give their credit cards pretty solid grades on what their cards provide. What they think less highly of is the value they receive.
The two views are not inconsistent. If you have a comfortable car that performs well and gets good gas mileage, you may consider yourself happy with it. However, you’d feel differently about the same car if the sticker price was $40,000 than if it was $120,000.
In each case, it would be the same nice car. However, at $40,000 you might consider it a good value for the money. At $120,000, you might decide it’s not worth the price.
Similarly, a CardRatings.com credit card survey found generally high grades for things like customer service, security and credit card websites and apps. What consumers were less happy about were the prices they paid for their cards and the value they got from their rewards.
Credit card survey: What consumers like most – and least
The credit card satisfaction survey surveyed over 1,600 consumers about their experiences with their credit cards. The survey asked respondents to rate various attributes of their cards on a scale of 1 to 10.
What do customers like best about their credit cards? The highest average score was 8.51 for ease of redeeming rewards.
Close behind that was an average score of 8.45 for customer service, and an average of 8.43 for credit card websites and apps.
On the other end of the spectrum, with scores just below 8, were ratings for the value of rewards and the price to carry the card. This suggests that while consumers are happy with certain features of their credit cards, they think they pay too much for them, and get too little back in the form of rewards.
If price or rewards are sources of credit card dissatisfaction for you, there may be some things you can do about that.
Making your credit card more cost-effective
When it comes to cost, there are really two factors to consider: fees and interest charges.
Impact of fees on credit card value
Fees come in various forms. There are maintenance fees, late fees, foreign transaction fees, paper statement fees – and those are just a few examples.
Many of these you can eliminate based on how you handle your account. For example, if you pay your bills on time, late fees won’t be an issue. If you access your account online, you can avoid paper statement fees.
However, maintenance fees are especially important because they are charged regardless of how you use your account. Still, they can be avoided.
A CardRatings average interest rate survey found that roughly half – 49% – of credit cards charge annual fees. That means there are plenty of other options for avoiding fees.
At the very least, if you choose a card with an annual fee, you should make sure the benefits the card provides are worth that fee.
➤ SEE MORE:Best no annual fee credit cards
Consumer behavior drives interest charges
The other category of credit card costs is interest charges. These can be managed through a combination of how you use your card and which card you choose.
If you pay your balance off in full every month, you’ll avoid interest charges altogether. That’s the most cost-effective way to use a credit card.
However, if you find it necessary to carry a balance at times, you should make sure to look for a card with a relatively low interest rate.
The latest interest rate survey reviewed credit card offers with rates ranging from a low of 17.49% to a high of 35.90%.
These differences are partly due to credit scores, and partly due to choice. Improving your credit score can make you eligible for better interest rate offers. Still, whatever your credit score is, shopping for the best rate available for your credit tier also can make a big difference.
➤ SEE MORE:People with high credit scores take better advantage of credit card choices
Getting the most out of your rewards
When it comes to credit card reward value, the two key factors are the size and the type of rewards.
Size might seem like it’s pretty easy to compare – for example, 3% cash back is better than 1% cash back. However, some credit cards complicate things in ways that make this comparison tougher. For example, earning points may be limited only to purchases in certain categories.
Also, instead of offering rewards with a straightforward dollar value, some programs pay rewards in the form of points. The actual redemption value of these points varies from program to program, and can change over time.
The other limitation can be what types of goods or services you can receive in return for your rewards.
Cash-back points are the most versatile. Rewards for a specific category, such as travel, can seem more generous in some cases. However, because they can only be redeemed for one category, you have to think about how much of that category you’d be likely to purchase.
To get the most value out of your rewards, it is important to review the details of a card’s rewards program before you make any decisions. Then you need to think about how well that rewards program matches up with your needs and credit card usage.
Steps to improve credit card usage
Here are some tips for getting better value out of your credit cards:
- Recognize how you use your credit cards. The best credit card for you depends on how you use it. Think about things like what you typically buy, how often you carry a balance and whether you’re frequently late with payments.
- Get the type of cards that best fit your usage. Once you have a clear picture of how you use your credit cards, you can think about what type of card would best suit that usage. For example, if you often carry a balance, you’ll want to look for a low-interest card. If you travel frequently, a travel rewards card would be of more use to you than to someone who rarely goes out of town.
- Shop around for the best deals in each category. Knowing what types of card would fit your usage allows you to narrow down your search. Then you can make direct comparisons, focusing on the attributes that matter most to you.
- Make sure you use the best card for each situation. Like many people, you may want more than one type of card, to suit different situations. For example, a low-interest card is best if you expect to be carrying a sizeable balance. If you plan on paying off your balance, a generous rewards card may give you better value. It’s not good enough to have different types of cards in your wallet. You need to reach for the right one to fit each situation.
➤ SEE MORE:How many credit cards should you have?
As the consumer survey showed, credit card users are less happy with the price of their cards and the value of rewards than other aspects of their credit cards. What they may not realize is how much they can do to improve their satisfaction with credit cards.
