Majority of Cardholders Still Prefer Cash for Transactions Abroad, J.D. Power Finds
American Express Ranks Highest in Singapore Credit Card Satisfaction Study
SINGAPORE: 30 Oct. 2019 – Customers’ overall satisfaction with their primary credit card issuer dips 6 points this year to 712 (on a 1,000-point scale), according to the J.D. Power Singapore Credit Card Satisfaction StudySM released today. Eight issuers are ranked in this year's study, with American Express maintaining the top position, followed by DBS and POSB. Tied in fourth place are Citibank and OCBC. Moving two places up the ranking and closer to industry average, is UOB, followed by Standard Chartered and HSBC.
Faced with lofty transaction fees and forex rates, 70% of cardholders are put off from using their credit card abroad. And with the added fear of fraudulent transactions when overseas, cash is the still the preferred choice, amounting to 50% of total spend abroad. This is despite the offer of higher reward points on overseas spend by most of the issuers.
“According to SingStat, Singapore residents on average travel twice a year. Our Study shows they spend approximately $4,800 annually during these trips, and that’s a missed opportunity for credit card issuers to fully capture overseas spending,” said Anthony Chiam, Regional Practice Leader, Asia and Australia, Global Business Intelligence at J.D Power. “It should be a cause for concern, given the rapid availability of other payment choices in the market.”
While 89% of cardholders are aware of the plethora of benefits that come with their cards, 72% use three or fewer of the benefits offered. Still, benefits are key for cardholders: 64% have used discounts or special privileges offered by issuers’ strategic partners. Given that benefits are critical to customer acquisition and engagement, issuers must make sure they remain relevant by keeping up with the changing preferences of cardholders.
Following are other key findings of the 2019 study:
- Essential to be the card of choice: On average, cardholders have four cards in their wallet, but 77% of their total credit card spend is with their primary card. In addition, more cardholders actively use only one card, as 44% say they used only their primary card in the past year, up from 27% in 2018. The percentage is even higher among millennials (born in and after 1980) at 48%. It is essential for cards to be the front of wallet, given this notable development.
- Well-designed and intuitive mobile app is a hygiene factor: More than one-third (38%) of customers with high satisfaction (average index score of 800 and higher) are four times more likely to recommend their primary card compared with dissatisfied customers (600 and lower) at 8%.
- Customer focus is key: Customers' perception of whether their primary card issuer is customer-driven strongly correlates with their overall brand satisfaction. The top-ranked brands are also top rated for being customer-driven.
American Express ranks highest in credit card satisfaction with an overall score of 755. DBS ranks second with a score of 737, while POSB ranks third with a score of 721.
The 2019 Singapore Credit Card Satisfaction Study measures overall satisfaction in six factors: interaction (31%); rewards (18%); credit card terms (17%); communications (15%); benefits and services (14%); and key moments (6%).
The study is based on responses from 2,805 credit cardholders. Now in its fifth year, the study includes 10 major credit card issuers in the market, eight of which rank eligible, and scores are based on cardholders’ experiences with their primary card. The study was fielded in August-September 2019. In addition to Singapore, J.D. Power also conducts credit card studies across key financial markets that include Australia, Canada, Hong Kong, Japan and the United States.
The study includes the Net Promoter Score® (NPS), which measures cardholders’ likelihood to recommend their card issuer on a 0-10 scale.
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