PROVIDENCE – People are spending less on their credit cards in favor of other payment options, which could spell trouble ahead for credit card issuers, according to a new study from J.D. Power.
The 2022 U.S. Credit Card Satisfaction Study found that people with credit cards were putting 42% of their monthly spending on their primary cards, compared with 47% in 2021 and 50% in 2020. In its place, debit card and cash spending have risen, up 80% and 49%, respectively, over the past five years.
For larger purchases, financing through Buy Now, Pay Later loans is also becoming increasingly popular, the study found.
Despite recent spikes in travel and spending, cardholders generally have been taking a more cautious stance with credit card spending in the past five years,” John Cabell, director of banking and payments intelligence at J.D. Power, said in a statement. “They are increasingly turning to other channels such as debit cards, BNPL and even cash. It is going to become critically important for card issuers to improve product value and boost proactive support for a growing segment of financially stressed customers as we move into this next phase of the economic cycle.”
Despite waning use of credit cards, overall customer satisfaction with credit card issuers has improved, up 5 points (out of a 1,000-point scale) compared with a year ago, the study found. The higher satisfaction score was driven by better sub-scores in the benefits and services, terms, and mobile communication areas of credit card companies.
Perceived trust in credit card companies also increased by 6 points over a year ago.
The study also ranked the top national and midsized credit card issuers according to their individual scores from customers. American Express was the top-ranked national issuer, with a score of 848, while Bank of America Corp. and Chase Bank, which have locations in Rhode Island, came in third and fifth, respectively.
Citizens Bank was the fifth-highest scorer among midsize issuers.
The study reflects responses from 27,800 credit card customers, who scored their satisfaction with companies across six categories. National companies are defined as those with 4 million or more active accounts, while midsize companies have 275,000 to 4 million active accounts.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.