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By Barry Choi
Special to the Financial Independence Hub
J.D. Power has just released its 2019 Canada Credit Card Satisfaction Study and Canadians have spoken: they prefer non-traditional card issuers over what the big banks are offering. This shouldn’t be a huge surprise as consumers had a similar outlook in the 2018 study, but there have been some minor changes to the ranking of cards with Tangerine Bank now having the highest overall customer satisfaction rating.
Using a 1,000-point scale, the average overall ranking was 754, but the top four credit card issuers had an average score of 799. Ratings were based on six factors: Benefits and Services; Communication; Credit Card Terms; Customer Interaction; Key Moments; and Rewards.
With more than 6,600 cardholders taking part in the survey, it’s impossible to determine what everyone was thinking, but we can make some logical assumptions based on the data available.
Canadians are favouring non-traditional card issuers
The biggest takeaway from the survey is that Canadians are favouring non-traditional card issuers with Tangerine, American Express, Canadian Tire and PC Financial taking the top 4 slots. This might be shocking to some people but when you look at the features of the credit cards offered by these companies, it may not surprise you at all.
The Tangerine credit card has become a popular card ever since it came onto the scene a few years ago. What makes this card appealing is that you get to choose up to three categories where you’ll earn up to 2% cash back. Every other credit card out there offers cash back has pre-defined categories so Tangerine is giving their customers the ability to choose what works best for them.
With American Express, they offer both cash back and travel cards, but one feature that’s unique to all of their cards is American Express Invites. With American Express Invites, you get exclusive access to some of the best entertainment, dining, and shopping experiences out there.
When it comes to Canadian Tire, it’s a brand that every Canadian knows. Canadian Tire Money is one of the most popular loyalty programs in the country and it has recently become better since the Canadian Tire credit card lineup was updated and rebranded to Triangle Mastercards.
Then there’s PC Financial Mastercard, which took the top slot last year but has fallen to fourth. Their PC Optimum program is still incredibly popular since you can earn up to 45 points per dollar spent at Shoppers Drug Mart and 30 points per dollar spent where President’s Choice products are sold. In other words, you can earn free groceries and merchandise fast with PC Optimum.
Cash rewards are more popular
According to the survey, 30% of those who responded said they preferred cash rewards. Airline rewards followed with 23%. Overall, customers who understood the value of their rewards program and what they earned were more likely to recommend their card over people who weren’t exactly clear how their rewards worked.
Favouritism towards cash back is nothing new as many Canadians now prefer the simplicity of cash rewards. With cash back credit cards, you get a set % back for every dollar you spend and you can cash out when you have a certain amount banked. When you compare that to travel rewards which may have blackout dates or it may take a ton of points before you can redeem any rewards, it’s easy to see why people prefer cash back these days.
That said, airline rewards are still popular. Within Canada, Air Canada controls much of the airspace so their loyalty program Aeroplan is still incredibly popular. Earlier this year, Air Canada formally acquired Aeroplan and have started to slowly implement some changes. Many Canadians are excited to see what else Air Canada has planned for Aeroplan which is likely why airline rewards are still ranked second overall.
Canadians prefer fewer communications
Unlike customers in the United States, Canadians were more satisfied when their credit card provider only contacted them once or twice a year. Overall, people much preferred email as their preferred way of communication.
Having your credit card providers communicate just via email likely isn’t going to happen as there would be many opportunities for fraud. To ensure that your account isn’t compromised, they advise you to call them if you have any customer issues that need to be addressed. Keep in mind that some credit card providers also offer secure chat/messaging as a way to communicate with them, but that may not be handled in real-time.
Simple is best
Based on all the survey findings, it seems clear that Canadians love things that are simple to understand and easy to use. 51% of cardholders used their digital app in the last three months while those who fully understand how to use the app had a satisfaction rating of 77 points higher than those who didn’t.
If credit card providers are looking to improve their satisfaction ratings, then they need to focus on rewards programs that are easy to understand and offer benefits that consumers are looking for. It’ll be interesting to see what credit card changes come in the following year and if customer satisfaction increases.
Barry Choi is a personal finance and travel expert at Moneywehave.com and often writes for Ratehub.ca’s blog, The Bottom Line.
