2013 Banking and Credit Card Survey

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1 2013 Banking and Credit Card Survey

2 About Credit Reporting Agency Credit Reporting Agency is the UK s first internet based credit reference agency, aimed firmly at serving consumers, rather than business users. It leads the UK market in the provision of online credit file based services and provides consumers with easy access to information on three websites: checkmyfile was first in the UK: - to provide consumers with online access to their credit files; - to offer consumers the ability to check their own credit score for free and to give plain English explanations of how credit scoring works. givemecredit was first in the UK: - to match lenders to consumer credit ratings for free, using credit scores, to help consumers find the cheapest deals and to reduce the risks of being declined; - to publish fully independent reviews of credit card and loan lenders based on expert evaluation and consumer feedback of customer service experience. annualcreditreport.co.uk was first in the UK: - to provide free annual credit reports to consumers to encourage more to check the quality of the information held about them, and to guard against the increasing threat of identity theft; - to provide free identity theft prevention services. About this survey Each year since 2005, Credit Reporting Agency has asked its customers to rate their bank or credit card company. Respondents are incentivised by an invitation to enter a prize draw. This year two respondents were each randomly selected to receive an Apple ipad-mini. Credit Reporting Agency uses the results to ensure that when suggesting financial institutions to its customers on any of its websites, it can give a consumer focussed assessment of the service levels likely to be provided. By using credit scoring, it also ensures that applicants are matched to lenders who are most likely to say yes, so the risks of being declined are minimised. 2,591 people took part in this survey. Responses were processed using surveymonkey.com and analysed by Credit Reporting Agency. This analysis was published on 17 January 2014.

3 Summary of Survey Results This year s survey results offer hope that banks and credit card providers are getting their act together and collectively improving their levels of customer service. The general financial outlook amongst respondents improved slightly for the second year in a row. - 71% of bank customers rated the service they receive as very good or excellent, up from 66% last year, and the proportion of respondents rating their credit card provider similarly increased from 64% to 68%. - The number of respondents who felt strongly enough never to recommend a particular bank or credit card to a friend dropped to 40%, down from 44% last year. - Credit cards with rewards programmes have shown a considerable increase in popularity in the last year and are now rated as the top reason for using a particular card, ahead of cashback and convenience. - Almost 80% of people said that their finances are in the same, or in a better position than they were a year ago. It will come as little surprise to learn that First Direct came out top of the pile for customer service ratings amongst banks the sixth successive year it has taken the crown. Despite holding a third of market share between them, Santander and Lloyds TSB finished 9 th and 10 th respectively. American Express was rated as the top credit card for customer service, with Tesco making a noticeable improvement. Lloyds TSB credit cards customers were also far from glowing about the customer service they receive, giving it the unwanted position of bottom of the pile in credit cards as well as banking.

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9 Credit cards Do you have at least one credit card? No, 15% Yes, 85% I used to have one, but the card isssuer closed the account, 8% I'm worried about staying in control of my spending, 13% Why don't you have a credit card? My credit rating means I can't get one, 44% I just don't need one, 35%

10 If your credit rating were to improve, do you think you would get a credit card for day-to-day use? Yes, if my credit rating were to improve, I'd definitely want a credit card, 31% It would have to be a really good offer to tempt me to get a card, 37% No, my past experience with a credit card has put me off, 32% And do you use it regularly, or just as an emergency back-up? I'm just paying off a previous balance, 13% It's only there as an emergency back-up, 18% I only use it for work expenses, 1% I use it regularly to pay for good or services, 68%

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14 Why has your opinion of your credit card provider gone down? Turned me down for an additional They have moved product/wouldn't their call centre increase my credit overseas, 4% limit, 3% My credit limit was reduced unexpectedly, 2% Poor treatment of a friend/i've heard bad things about them elsewhere, 1% Repeated mistakes, 10% My standard APR was increased, 23% Too many charges, 17% Lack of help when I really needed it, 20% Generally worse customer service, 20% The proportion of respondents citing an increase in standard APR as the reason for their opinion of their credit card provider going down has increased from 18% in 2012 to 23% this year.

15 Why has your opinion of your credit card provider gone up? Their rewards programme has improved, 13% They've reduced my standard APR, 5% They helped me when I really needed it, 20% General improvement in customer service, 41% They've given me the credit limit I needed, 21% Have you applied for a new bank account or credit card in the last 12 months? Yes, 37% No, 63%

16 Was your application approved or turned down? I was declined, 34% I was accepted, 66% A reduction in the number of credit applications that were accepted dropping from 71% in 2012 to 66% this year. Did you give specific consideration to your credit rating when deciding which bank or lender to apply to? Yes, 50% No, 50% To coincide with the drop in the proportion of successful applications, the number of respondents who gave particular consideration to their credit rating before applying also fell, from 54% to 50%.

17 Is there a particular bank or credit card that you will never use again or recommend to a friend? Yes there is, 40% No, I don't feel that strongly, 60% A decrease on the number of respondents who have very strong negative feelings about a particular lender - falling from 44% last year to 40% this time around.

18 Is there a particular reason for your strong negative feelings? I feel that APR is ridiculously high, 10% Aggressive debt chasing or selling on of debts, 4% Repeated mistakes, for example with Direct Debits, 4% No reward for being a loyal customer, 3% Constant selling of other, unwanted products and services, 2% Very poor customer service, 27% Reason not given, 14% Excessive and unfair charges, 13% Complete incompetence, 14% They offered no understanding or assistance when I was in financial difficulty, 10%

19 Would you say that your finances are in a better or worse position than a year ago? I'd rather not say, 5% I'm in a worse position, 17% I'm in a better position, 40% My finances are much the same as they were a year ago, 38% An improvement in the average financial position compared to % of respondents consider themselves to be in a better position than a year ago, compared to 36%, whilst less (17% compared to 20%) think that they are in a worse position than they were.

20 What is your main financial goal? I'm saving for a new car/other big purchase 7% Get a mortgage 8% I'm saving towards a big holiday 5% Remortgage to a better deal 3% Get a loan for something else (e.g. a kitchen) 2% Get a car loan 1% I'm aiming to pay off debt 32% I hope to improve my credit rating 12% I've got no particular plan/goal 30% There has been no significant change in the financial goals that respondents have, with paying off debt and improving their credit rating remaining the two most popular targets.