• by Tanya Gazdik , August 18, 2011

American Express ranks highest in credit card customer satisfaction for a fifth consecutive year, according to J.D. Power & Associates.

The overall industry is up for a second year after a considerable decline in 2009.

The 2011 U.S. Credit Card Satisfaction Study measures customer satisfaction with credit cards by examining six factors: interaction; credit card terms; billing and payment process; rewards; benefits and services; and problem resolution. Overall credit card satisfaction averages 731 on a 1,000-point scale in 2011, up from 714 in 2010 and 705 in 2009.

American Express ranks highest in customer satisfaction for a fifth consecutive year with a score of 786 and performs particularly well in the benefits and services, credit card terms and rewards factors.

American Express says it has made improvements to enhance the customer experience over the past year, including expanding benefits, services and rewards. Its rewards program has been enhanced so cardmembers can increasingly redeem points online. The company has also launched new servicing tools for its customer care professionals and also introduced online improvements such as a new financial tools Web site and an overall revamp of the American Express Web site with the goal of making it more user-friendly.

Discover Card follows with a score of 779, and performs well in the interaction factor. Barclaycard ranks third with 739.

Customer perceptions of card issuer brand image have also improved in 2011. Overall reputation of brands in the industry has increased again this year, as measured across six attributes, with financial stability showing the greatest increase from 2010.

The improvement in credit card satisfaction may be attributed to a decline in interest rate increases reported, as well as a decrease in the impact of interest rate increases on overall satisfaction. In addition, 35% of customers say they understand their credit card terms, up from 32% in 2010.

"It appears that credit card companies are doing a better job of communicating with customers, which may be an effect of CARD (The Credit Card Accountability, Responsibility and Disclosure Act of 2009)," said Michael Beird, director of banking services at Westlake Village, Calif.-based J.D. Power and Associates, in a release. "This improved communication is key to ensuring that customers fully understand their credit card terms, particularly benefits and fees, which helps reduce the number of problems reported and improves the overall experience."

Even with improved communication and higher satisfaction across the industry, there is still a wide variance among credit card companies, and competition for acquiring new cardholders has increased during the past year, Beird says.

The 2011 U.S. Credit Card Satisfaction Study is based on responses from more than 8,700 credit card customers. The study was fielded in May and June 2011.