3rd Annual Study of Credit Card Complaints (2017)

Most Common Complaints & Issues

The first trend we sought to identify was what issues people were having with their credit cards. We found that not much changed in 2016 over the prior years, in terms of the most prevalent complaints. Billing disputes were by and large the leading cause of consumer grievances. Close to one in five credit card complaints last year had to do with this topic.

One interesting issue that did not make the top 10 was “unsolicited credit card accounts”. This refers to card accounts being opened without the permission of the consumer. In 2016, this became a hot-button issue after the Wells Fargo scandal. The bank’s employees allegedly opened thousands of credit card accounts without obtaining proper consent of their customers, all to meet bonus quotas.

Contrary to what one might think, Synchrony Financial was responsible for the most unsolicited credit card complaints last year, not Wells Fargo. Synchrony operates many of the store credit cards consumers are offered at the checkout counter of many big-name retail stores. Some consumers presented with an offer at checkout aren’t fully aware they are applying for a credit card and simply hand over personal information. They often only discover they opened a credit account when one shows up in the mail a few days later.

Note: We excluded "other", which was the second most popular listed issue because there was no specificity to analyze.

Which Complaints Were Likely To Result In A Refund?

When consumers are upset, most want some form of monetary compensation for their troubles. With credit cards, there was no difference. The CFPB monitors whether consumers received any form of relief from their company, as a result of the complaint. This metric can serve as a proxy for consumer satisfaction with the process. It also informs us about what types of complaints are likely to result in a satisfactory resolution.

Measuring the effectiveness of a complaint is tricky. There are other metrics that may serve this purpose better than whether or not a consumer received a refund. For example, the CFPB tracks whether consumers disputed the bank’s response to their complaint. We found that 21% of consumers received monetary relief, and 78% of all complainants did not dispute the final decision.

Which Companies Are Being Complained About The Most?

Another interesting metric we examined was which companies had the most complaints filed against them. Instead of looking at the raw number of complaints, we controlled for the institution’s size by dividing the number of complaints by the total size of their credit card loan portfolio as of Q3 2016. This applied an appropriate weight to the ranking. Citibank and JPMorgan Chase have more credit card users than most other institutions. Therefore, they also had a higher total number of complaints filed against them. However, when you control for loan volume, you can see certain card issuers were far more problematic for their customers.

Note that in our examination we only looked at the top ten national credit card issuers in the United States. Together, they account for more than 80% of the credit card market. Due to data constraints, we were unable to look at small regional card issuers and credit unions that make up a significantly smaller portion of U.S. credit card accounts.

One thing to keep in mind when looking at these institutions is that a consumer complaint doesn’t imply wrongdoing on the part of the issuer. As with all of these complaints, the CFPB monitors and oversees a conflict resolution process on the part of the consumer. However, there are instances where the bank simply offers an explanation to their customer showing why they are standing by their original decision. It is important to consider this fact before drawing any conclusions based on the data.

What Changed From Previous Years?

Overall, we’re seeing an upward trend in the number of complaints filed with the CFPB regarding credit cards. Last year, 22% more people submitted a ticket with the bureau, compared to 2015. There are two ways to interpret this increase. The first, is that more people are having trouble with their credit cards than ever before. This is the simplest explanation, though there haven’t been any major industry shifts that may explain such a trend.

A more likely reason for the increase in complaints is simply the larger pool of credit card users we have today, versus a few years ago. Credit card use in the U.S. grew rapidly over the last four years. We may be seeing more complaints filed, simply because with a larger part of the population using them, there is a larger chance of people having issues arise.

Another possible explanation behind this upward trend is greater consumer awareness of the CFPB as an option for resolving their claims. The bureau is featured more and more heavily in the news headlines as they fine banks and issue millions in refunds to consumers. This positive worth-of-mouth could be having an impact on the percentage of people turning to the agency for help.