2013 Credit Card Application Study

Overview

CardHub-2013-Credit-Card-Application-StudyHow easy is it to shop for a credit card online?  From one website to the next, how easily can you discern what your interest rate will be on purchase transactions?  How about balance transfers?  And how much will those rewards points get you in cash, travel and merchandise?  Can you readily find this information on the issuer websites or do you need to go to the fine print to find out the real cost benefit of the card?  In our fourth annual Credit Card Application study, CardHub once again has set out to find the answers to these questions.

In our analysis we examined and scored the credit card product websites of the top 10 issuers on several key components related to the costs and benefits of each credit card including:

1.) Clarity on Rewards: Do the product pages clearly define, without reading the fine print, how to earn rewards and how much are these worth to the customer (e.g. Are 10,000 miles worth a trip to Chicago or a trip to Greece?)

2.) Clarity on Annual Fee: Is the annual fee clearly displayed without going to the pricing disclosures or fine print?

3.) Clarity on How Much it Costs to Carry a Balance for New Purchases: Are the introductory and regular APRs for new purchases clearly displayed without going to the pricing disclosures, reading the fine print, or clicking out of the landing page?

4.) Clarity on How Much it Costs to Make a Balance Transfer:  Are the introductory and regular APRs for a balance transfer, as well as the balance transfer fee, clearly displayed without going to the pricing disclosures, reading the fine print, or clicking out of the application page?

 

Average Credit Card Application Transparency Score 2013

 

 

Year Over Year Overall Transparency Score

 

 

Average Clarity Scores All Issuers

 

 

Year to Year Rankings

 

Issuer Rank 2013 Rank 2012 Rank 2011 Rank 2010 Average Score 2013 Average Score 2012 Average Score 2011 Average Score 2010
Capital One 1 1 1 1 100.00% 98.60% 98.60% 96.40%
Bank of America 2 5 2 2 99.29% 87.10% 97.90% 95.00%
Chase 3 7 3 7 97.00% 85.50% 91.80% 81.40%
Citi 4 2 10 6 94.29% 96.40% 82.10% 82.10%
Discover 5 4 9 5 92.50% 87.50% 82.50% 82.50%
U.S. Bank 6 3 4 10 89.29% 88.60% 91.40% 59.30%
USAA 7 9 7 9 89.09% 72.70% 85.00% 77.50%
Wells Fargo 8 6 5 3 87.14% 86.40% 87.10% 87.90%
American Express 9 8 7 8 78.33% 76.70% 85.00% 78.30%
Barclays 10 10 N/A N/A 73.33% 62.00% N/A N/A
Average Score All Issuers N/A N/A N/A N/A 89.78% 84.15% 89.04% 82.27%

 

Key Findings

  • Capital One has the clearest credit card applications for the fourth straight year, receiving a perfect score of 100% in 2013.
  • The worst performing issuers were American Express and Barclays, with average scores of 78.33% and 73.3%, respectively.
  • In 2013 overall transparency increased rising from 84.2% to 89.8%, the highest score since we began issuing the study in 2010. USAA’s credit card product websites showed the most improvement from last year – its average score rose 16.4%.  Bank of America also had a significant increase of 12.2 percentage points.
  • In relative ranking, US Bank fell furthest, dropping 3 positions from their 2012 rankings.  Chase had the biggest improvement in relative rank, improving by 4 positions.
  • The areas in which the most ambiguity still remains are the same as in previous years: Information related to rewards redemption and information on balance transfer fees continue to be the areas with the most deficiencies across the board.
  • Most applications were very clear about the annual fee, how to earn rewards, and information on the purchase APR.

 

Methodology

We visited the online applications of the top 10 issuers, based on outstanding balances, and subjectively evaluated how clear the key information was, based on the ease with which we could locate it. The issuers were assigned points for each card based on how visible this information was within the page, whether we had to click to a new page to find pricing information, and whether we had to read the fine print to find these key components.

We isolated a few key components of a credit card agreement that people should definitely be aware of before applying for a credit card. The components included clarity of the introductory and regular APRs for purchases and balance transfers, clarity of the balance transfer fee and annual fee, clarity of how a customer earns rewards, and clarity of how valuable their points and miles are for rewards feature credit cards. Ideally, an applicant should not be able to start filling out an application without seeing this information.

When available, we evaluated two rewards credit cards and two non-rewards credit cards for every issuer.  We also used the same cards from the 2012 Credit Card Application Study (where possible) and the same methodology with previous years for consistency.

The cards received scores on a scale of 1 through 10, based on their clarity in the categories below. A score of 10 means the following in each category:

  • Clarity of Rewards: The summary or landing pages clearly defined, without reading the fine print, how to earn rewards and how much are these worth to the customer (e.g. Are 10,000 miles worth a trip to New York or a trip to Greece?).
  • Clarity of Annual Fee: The annual fee was clearly displayed without going to the pricing disclosures for the credit card.
  • Clarity of How Much it Costs to Carry a Balance for New Purchases: The introductory and regular APR for new purchases made on a credit card were clearly displayed without going to the pricing disclosures, reading the fine print, or clicking out of the landing page.
  • Clarity of How Much it Costs to Make a Balance Transfer: The introductory and regular APRs for a balance transfer, as well as the balance transfer fee, were clearly displayed together without going to the pricing disclosures, reading the fine print, or clicking out of the landing page.

Note: It is important that the purchase APR, balance transfer APR and balance transfer fee be listed in close proximity to one another.  Otherwise consumers may be misled into believing they have all relevant cost information.   For instance, if the balance transfer APR is listed at the top of the landing page while the balance transfer fee is listed on the “pricing and fees” tab further down the page, the consumer, seeing the APR, without knowing that a balance transfer fee exists, may not look for further pricing information, believing they have all the relevant cost information, when in fact they have missed a significant fee.

It is also important to mention that we consider a Terms & Conditions page to be fine print because issuers could (and most already do) list the most important information contained therein in a much more consumer-friendly manner.

The study took into account the information found on pages leading up to the landing page for individual credit cards. In most cases, an applicant will go through another page (typically the issuer’s homepage for credit cards where all of their credit cards are listed) in order to get to the specific landing page of a credit card, so any information found on this page was considered, as it is highly likely that an applicant will see this information before they apply.

 

Detailed Findings

Below is a breakdown of the points assigned to each card by issuer. Cards that offered rewards and the ability to transfer balances were scored on a 40-point scale. Cards without a rewards feature or without a balance transfer feature were scored on a 30-point scale. An “n/a” indicates that a specific feature was not offered.

 

Issuer

Card

Clarity
on Rewards

Clarity
on Annual Fee

Clarity
on How Much It Costs to Carry Balance for New Purchases

Clarity
on How much it Costs to Make a Balance Transfer

Total
Possible Points

Total
Points Earned

Total
Average Percentage

Capital One

Quicksilver Card

10

10

10

10

40

40

 

Venture One Card

10

10

10

10

40

40

 

Capital One Classic Platinum Credit
Card

n/a

10

10

10

30

30

 

Capital One Platinum Prestige Credit
Card

n/a

10

10

10

30

30

 

 

 

 

 

 

140

140

100.00%

Bank of America

BankAmericard Cash Rewards Credit Card

10

10

10

10

40

40

 

BankAmericard Better Balance Rewards Card

9

10

10

10

40

39

 

BankAmericard Basic Visa Card

n/a

10

10

10

30

30

 

BankAmericard for Students

n/a

10

10

10

30

30

 

 

 

 

 

 

140

139

99.29%

Chase

Chase Freedom Card

10

10

10

10

40

40

 

Chase Sapphire

7

10

10

n/a

30

27

 

Chase Slate

n/a

10

10

10

30

30

 

 

 

 

 

 

100

97

97.00%

Citi

Citi Forward

5

10

10

7

40

32

 

Citi Dividend Platinum Select Card

10

10

10

10

40

40

 

Citi Diamond Preferred Card

n/a

10

10

10

30

30

 

Citi Simplicity Card

n/a

10

10

10

30

30

 

 

 

 

 

 

140

132

94.29%

Discover

Discover IT Credit Card

10

10

10

10

40

40

 

Discover IT for Students

10

10

10

4

40

34

 

 

 

 

 

 

80

74

92.50%

U.S. Bank

1-2-3 REWARDS Visa Card

10

10

10

7

40

37

 

U.S. Bank FlexPerks Travel Rewards
Visa Signature Card

10

10

10

6

40

36

 

U.S. Bank Visa Platinum Credit Card

n/a

10

10

6

30

26

 

U.S. Bank College Visa Card

n/a

10

10

6

30

26

 

 

 

 

 

 

140

125

89.29%

USAA

USAA American Express Card

10

10

9

7

40

36

 

USAA World MasterCard Credit Card

10

10

9

7

40

36

 

USAA Rate Advantage MasterCard

n/a

10

9

7

30

26

 

 

 

 

 

 

110

98

89.09%

Wells Fargo

Wells Fargo Cash Back Card

10

10

10

6

40

36

 

Wells Fargo Rewards Card

8

10

10

6

40

34

 

Wells Fargo Platinum Card

n/a

10

10

6

30

26

 

Wells Fargo Cash Back College Card

n/a

10

10

6

30

26

 

 

 

 

 

 

140

122

87.14%

American Express

Blue Cash Everyday from American
Express

10

10

10

6

40

36

 

Platinum Delta Sky Miles

0

10

10

4

40

24

 

True Earning Card from Costco and
American Express

10

10

10

4

40

34

 

 

 

 

 

 

120

94

78.33%

Barclays

Barclaycard Rewards MasterCard

0

10

10

6

40

26

 

Barclaycard Ring

n/a

10

10

10

30

30

 

Priceline Rewards Visa

5

10

5

4

40

24

 

US Airways Dividend Miles World
MasterCard

5

10

10

5

40

30

 

 

 

 

 

 

150

110

73.33%

We shared the specific transparency deficiency results on each card with the issuers in the study and asked for corrections and/or comments.  Below are the comments that we received:

Wells Fargo:“An important part of our company’s vision is to provide customers information they need to make an informed decision about any financial product or service they may need. We work to make it easy for customers to learn features of the cards they are considering applying for. For example, from Wells Fargo’s home page, a customer can get to a particular credit card’s terms and conditions in three clicks of their mouse. Customers interested in understanding the value of rewards points can do so in only four clicks from the company’s home page. We believe this structure provides our customers the detail they need to make informed choices about which credit card meet their needs.”

USAA:  “The ‘view rates fees and other cost information’ link appears very prominently on both the top banner and the lower part of each page. Most consumers intuitively know that the rates and fees are accessible in that link.”

 

For questions or more information regarding this study, please contact our media department.

 

Previous years’ studies: 

2012 Credit Card Application Study
2011 Credit Card Application Study
2010 Credit Card Application Study

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Apr 4, 2014
Photo of Penny S.
By: Penny Schrum
I have had one capital one card in my whole life.I never had any credit cards.

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