Credit card holders loosing their confidence
Reston (VA): More than two-thirds of credit card consumers want changes in their credit card terms and conditions by reducing spending behavior, terminating the account or switching brands, according to a research.
comScore, a marketing research company that provides marketing data and services to many of the internet's largest businesses. released its 'Online Credit Card Report: 2009 Edition'. The report provides an in-depth view of the online credit card industry, with a particular focus on how the economic environment, government regulation and industry response have affected consumer behavior and confidence.
"This past year has been very volatile in the credit card industry, both for issuers and consumers. With the economic environment and regulatory mandates prompting issuers to make product adjustments, an already financially-sensitive consumer is responding with dissatisfaction and an increasingly negative perception of their card issuer. Understanding the current sentiment and common concerns among consumers will be critical to success over the next year," said Kevin Levitt, Vice President, comScore.
The economic downturn combined with revived transparency regulations in the credit card industry have caused issuers to make changes to consumers' credit card accounts. The comScore report found that half of consumers have noticed direct changes to their accounts made by their issuer including an increase in APR/interest rate, reduced credit limit and additional fees.
These changes have caused many consumers to lose confidence in their issuer and take direct action. Among survey respondents who have noted such changes in the last year, 55 percent indicated that they have decreased the amount they spend using that particular card, while 27 percent no longer use that card for purchases. Twelve percent of respondents have closed that account, while 9 percent applied for a new credit card with another issuer and 8 percent transferred their balance to another card. Just 3 percent reported spending more on that card.
"In the current economic environment, many customers are taking strong action in response to changes made by their credit card issuer. Issuers must work to provide additional value or risk consumer backlash in the form of reduced card spending or even brand defection," added Levitt.
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