2015 Credit Card Application Study

CREDIT CARD APPLICATIONHow easy is it to find the right credit card online? While comparison tools and customer reviews simplify the selection process in many respects, marketing obfuscation and inconsistency on the part of issuers makes it difficult for consumers to accurately discern each offer’s net value proposition, and thus which card will best suit their needs.

In order to gauge the extent of the problem, and highlight specific areas of concern for consumers, we evaluated online credit card listings from the websites of 10 large national banks as well as 10 of the most popular credit unions. We then scored each website based on the manner in which they characterize the following types of account information:

  1. Rewards: Do the issuer’s product pages clearly define — without reading the fine print — how to earn rewards and how much they are worth (e.g., Are 50,000 miles worth a trip to Chicago or Greece)?
  2. Annual Fee: Is the annual fee clearly displayed, beyond pricing disclosures or fine print?
  3. Costs of Financing New Purchases: Are the introductory and regular APRs for new purchases clear to the consumer without having to reference pricing disclosures, fine print, or a separate page?
  4. Balance Transfer Costs: Are all relevant balance transfer terms – introductory and regular APRs and balance transfer fee – clear without referring to pricing disclosures, fine print, or a different page?

Key Findings

 

  • Capital One, Bank of America, State Employees Credit Union, and Boeing Employees Credit Union have the clearest overall credit card applications. This marks the sixth consecutive year that Capital One has topped the bank category.
  • Barclaycard US (85.74%) and Navy Federal Credit Union (84.73%) have the least clear credit card applications.
2015 Bank Transparency Scores

 

2015 Credit Union Transparency Scores

 

  • This year’s “most improved” awards go to USAA, whose online credit card listings improved 16.09 percentage points relative to 2014.
Year Over Year Transparency Score

 

  • Credit unions lag slightly behind big banks when it comes to overall website transparency, with the biggest deficiency being in terms of how rewards earning and redemption rates are characterized.
Average Transparency Scores 2015

 

  • The areas in which the most ambiguity remains – for big banks and credit unions alike – are the same as in previous years: the disclosure of balance transfer fees and rewards redemption value.
  • Nevertheless, transparency is now at the highest point since we began conducting this study in 2010 – having increased 15% in that time.

YearAverage Score All BanksAverage Score All Credit Unions

Historical Average Scores -- All Issuers

Note: Credit unions were included for the first time in 2015 and scored 93.84%

 

Tips for Getting the Right Credit Card

 

  • Determine Your Credit Standing: Credit card companies evaluate each applicant’s credit history and disposable income when making approval decisions. Together, this information tells them whether or not you can handle a new credit line and dictates the types of offers you’re eligible for.That doesn’t mean you need to run out and order your actual credit score before applying for a credit card, however. Not only is it impossible to get a credit score that matches the proprietary scoring models used by the 10 major issuers (which control around 80% of the market), but you typically have to pay to access your credit score. Instead, you should take advantage of your free annual credit reports because the information that they contain will give you a qualitative sense of where you stand and therefore what credit cards to focus your search on.
  • Compare Offers with a Purpose: Do your credit standing, spending, and payment habits indicate that you should get a rewards credit card, a 0% credit card, or a no annual fee credit card? Well, if you always pay your bills in full, rewards would be more appropriate than low interest rates, and vice versa. And if you don’t have above-average credit, then you should focus on finding a card that does not charge an annual fee and offers you a good chance of approval.The point is, you should determine how you plan to use your credit card as well as what offers you’re eligible before actually beginning your search for a specific product because this will enable you to better target your comparison efforts.
  • Don’t Let Marketing Hype Sway You: A credit card offering a 0% promotional interest rate or bearing the logo of your favorite sports team might seem very appealing, but you can’t evaluate credit cards in a vacuum. You need to thoroughly compare product terms in order to find the best possible offer for your needs. If you’re in debt, a long 0% rate might be misleading, as membership fees, balance transfer fees, and regular interest rates can easily wind up eating away at your potential 0% savings.
  • Don’t Apply En Masse: The purpose of comparing credit cards is to narrow your selections down to the offer or two with the best terms for your particular financial situation. This will enable you to minimize the odds that you’ll be declined and have to submit numerous applications within a short period of time, which is bad for your credit. A lot of people make the mistake of applying for a bunch of cards at once, thinking that they’ll eventually get approved for one. This type of lottery approach is the worst way to go about getting a new credit card.
  • Remember that Secured Cards are a Good Option: If your desire for a new credit card stems from a need to improve your credit standing, don’t discount secured credit cards. In fact, you should apply for one if you don’t get approved after two unsuccessful applications for unsecured cards. Secured cards offer the closest thing you can get to guaranteed credit card approval because they require users to place a refundable security deposit that acts as their credit line and ensures that the issuer will get paid back for whatever you spend.

 

Detailed Findings

 

Below is a breakdown of the points assigned to each card by issuer. A maximum of 10 points were available in each category we evaluated, and scores were then converted to a 100-point scale. Note: “N/A” indicates that a specific feature was not offered in the online application process at the time research for this study was conducted.

Rewards Annual Fee Cost of Financing New Purchases Balance Transfer Costs Score
Quicksilver 10 10 10 10 100.0%
VentureOne 10 10 10 10 100.0%
Spark Miles 10 10 10 10 100.0%
Capital One Classic Platinum N/A 10 10 10 100.0%
Capital One Platinum N/A 10 10 10 100.0%
Capital One Overall Score 10 10 10 10 100.0%
BankAmericard Cash Rewards 10 10 10 10 100.0%
BankAmericard Credit Card N/A 10 10 10 100.0%
Cash Rewards for Business 10 10 10 N/A 100.0%
BankAmericard Better Balance Rewards 10 10 10 10 100.0%
BankAmericard for Students N/A 10 10 10 100.0%
Bank of America Overall Score 10 10 10 10 100.0%
1-2-3 Rewards 10 10 10 10 100.0%
FlexPerks Travel Rewards 10 10 10 10 100.0%
FlexPerks Business Edge Travel Rewards 10 10 10 8.4 96.0%
Visa Platinum N/A 10 10 10 100.0%
U.S. Bank College Visa N/A 10 10 10 100.0%
U.S. Bank Overall Score 10 10 10 9.68 99.1%
Rewards American Express 8.2 10 10 10 95.5%
Preferred Cash Rewards 10 10 10 10 100.0%
Rate Advantage N/A 10 10 10 100.0%
USAA Overall Score 9.1 10 10 10 98.4%
Citi ThankYou Preferred 9.8 10 10 10 99.5%
CitiBusiness Aadvantage Platinum Select 5.5 10 10 8.4 84.8%
Citi Double Cash 10 10 10 10 100.0%
Citi Diamond Preferred N/A 10 10 10 100.0%
Citi Simplicity N/A 10 10 10 100.0%
Citi Overall Score 8.43 10 10 9.68 96.5%
Discover IT 10 10 10 10 100.0%
Discover it Chrome for Students 10 10 10 6.4 91.0%
Discover Overall Score 10 10 10 8.2 95.5%
Chase Freedom 9.65 10 10 10 99.1%
Ink Business Plus 9.575 10 3 N/A 75.3%
Chase Sapphire Preferred 9.575 10 10 N/A 98.6%
Chase Slate N/A 10 10 10 100.0%
Chase Overall Score 9.6 10 8.25 10 93.7%
Wells Fargo Cash Back 10 10 10 8.4 96.0%
Wells Fargo Rewards 6.1 10 10 8.4 86.3%
Wells Fargo Platinum N/A 10 10 8.4 94.7%
Wells Fargo Business Platinum N/A 10 10 N/A 100.0%
Wells Fargo Overall Score 8.05 10 10 8.4 93.3%
Blue Cash Everyday 10 10 10 6.4 91.0%
Platinum Delta Sky Miles 4.1 10 10 6.4 76.3%
Amex EveryDay 5.65 10 10 6.4 80.1%
SimplyCash Business 10 10 10 N/A 100.0%
True Earnings 10 10 10 4.8 87.0%
American Express Overall Score 7.95 10 10 6 86.2%
Barclaycard Rewards 10 10 10 10 100.0%
Barclaycard Ring N/A 10 10 10 100.0%
Barclaycard Arrival 9.8 10 10 7.2 92.5%
Hawaiian Airlines 5.5 10 3 4.4 57.3%
Frontier Airlines 5.8 10 10 7.2 82.5%
Barclays Overall Score 7.78 10 8.6 7.76 85.7%

Credit Unions

Rewards Annual Fee Cost of Financing New Purchases Balance Transfer Costs Score
SECU’s Visa Credit Card N/A 10 10 10 100.0%
State Employees Score N/A 10 10 10 100.0%
BECU VISA CREDIT CARD N/A 10 10 10 100.0%
Boeing Employees Overall Score N/A 10 10 10 100.0%
PenFed Promise Visa N/A 10 10 10 100.0%
PenFed Gold Visa N/A 10 10 10 100.0%
PenFed Defender Visa Signature 10 10 10 10 100.0%
PenFed Platinum Rewards Visa Signature 5.5 10 10 10 88.8%
Pentagon Federal Overall Score 7.75 10 10 10 96.8%
SchoolsFirst FCU School Employee Visa 8.5 10 10 10 96.3%
Rewards Visa 5.5 10 10 10 88.8%
Visa Platinum N/A 10 10 10 100.0%
Gold Visa N/A 10 10 10 100.0%
SchoolsFirst F.C.U. Overall Score 7 10 10 10 95.7%
Visa Platinum N/A 10 10 10 100.0%
Visa Platinum Rewards 5.5 10 10 10 88.8%
Alliant Credit Union Overall Score 5.5 10 10 10 93.6%
Platinum Rewards 10 10 6 8.4 86.0%
Platinum Rewards for Students 10 10 10 10 100.0%
Golden 1 Overall Score 10 10 8 9.2 93.0%
Star One Visa Signature Rewards Card 5.5 10 10 10 88.8%
Platinum Best Rate Card N/A 10 10 10 100.0%
Visa Platinum Rewards Card 5.5 10 10 10 88.8%
Star One Overall Score 5.5 10 10 10 91.8%
Power Rewards MasterCard 6.18 10 10 10 90.4%
Power MasterCard N/A 10 10 10 100.0%
Power Travel Rewards MasterCard 6.18 10 10 8 85.4%
Security Sevice Overall Score 6.18 10 10 9.33 91.2%
Visa Platinum Credit Card 10 10 10 5.2 88.0%
San Diego County Overall Score 10 10 10 5.2 88.0%
cashRewards 10 10 6 8.4 86.0%
GO REWARDS 10 10 6 8.4 86.0%
Platinum Credit Card N/A 10 6 8.4 81.3%
Navy Federal Overall Score 10 10 6 8.4 84.7%

Scores and Ranks

Score & Rank 2015 Score & Rank 2014 Score & Rank 2013 Score & Rank 2012 Score & Rank 2011 Score & Rank 2010 2015 vs. 2014 Change
Capital One 100.00%
(1)
100.00%
(1)
100.00%
(1)
98.60%
(1)
98.60%
(1)
96.40%
(1)
0.00%
Bank of America 100.00%
(1)
98.93%
(3)
99.29%
(2)
87.10%
(5)
97.90%
(2)
95.00%
(2)
1.08%
U.S. Bank 99.11%
(2)
97.22%
(4)
89.29%
(6)
88.60%
(3)
91.40%
(4)
59.30%
(10)
1.94%
USAA 98.36%
(4)
84.73%
(9)
89.09%
(7)
72.70%
(9)
85.00%
(7)
77.50%
(9)
16.09%
Citi 96.50%
(5)
99.75%
(2)
94.29%
(4)
96.40%
(2)
82.10%
(10)
82.10%
(6)
-3.26%
Discover 95.50%
(6)
95.50%
(6)
92.50%
(5)
87.50%
(4)
82.50%
(9)
82.50%
(5)
0.00%
Chase 93.69%
(7)
91.24%
(7)
87.14%
(8)
86.40%
(6)
87.10%
(5)
87.90%
(3)
2.69%
Wells Fargo 93.31%
(8)
96.03%
(5)
97.00%
(3)
85.50%
(7)
91.80%
(3)
81.40%
(7)
-2.84%
American Express 86.18%
(9)
86.63%
(8)
78.33%
(9)
76.70%
(8)
85.00%
(7)
78.30%
(8)
-0.52%
Barclays 85.74%
(10)
76.32%
(10)
73.33%
(10)
62.00%
(10)
0.00%
(N/A)
0.00%
(N/A)
12.34%
Average Score Banks 94.46% 92.63% 90.03% 84.15% 89.04% 82.27% 1.97%
State Employees 100.00%
(1)
N/A N/A N/A N/A N/A N/A
Boeing Employees 100.00%
(1)
N/A N/A N/A N/A N/A N/A
Pentagon Federal 96.79%
(3)
N/A N/A N/A N/A N/A N/A
SchoolsFirst F.C.U. 95.71%
(4)
N/A N/A N/A N/A N/A N/A
Alliant Credit Union 93.57%
(5)
N/A N/A N/A N/A N/A N/A
Golden 1 93.00%
(6)
N/A N/A N/A N/A N/A N/A
Star One 91.82%
(7)
N/A N/A N/A N/A N/A N/A
Security Sevice 91.23%
(8)
N/A N/A N/A N/A N/A N/A
San Diego County 88.00%
(9)
N/A N/A N/A N/A N/A N/A
Navy Federal 84.73%
(10)
N/A N/A N/A N/A N/A N/A
Average Score All Credit Unions 93.48% N/A N/A N/A N/A N/A N/A

 

Methodology

 

We visited the websites of the 10 largest credit card issuers as well as the 10 largest credit unions (new for 2015!) and subjectively evaluated how clearly key credit card information is presented. Issuers were assigned points for each card based on the visibility of account terms on the page, particularly whether a user would have to click to a new page or read fine print in order to ascertain important pricing information.

We isolated a few key components of a credit card agreement that consumers should definitely be aware of before applying for a credit card. This includes introductory and regular APRs for purchase and balance transfers as well as balance transfer and annual fees, and rewards earning and redemption rates. Ideally, an applicant should not be able to begin filling out an application without first being apprised of this information.

When possible, we evaluated up to five cards for each issuer, with the ideal combination of two rewards credit cards, two non-rewards credit cards and one business rewards card. We also used the same methodology as in previous years for consistency.

The cards received scores on a scale of 1 to 10 — based on prominence of information — in the following categories:

Rewards – 10 points maximum:

  • Clarity on earning – 2 points maximum
  • Clarity on earning cap – 1.5 points maximum
  • Clarity on signing up – 1.5 points maximum
  • Clarity on how much points are worth – 4 points maximum
  • Clarity on minimum needed to redeem – 0.5 points maximum
  • Clarity on currency earned – 0.5 points maximum

Annual Fee – 10 points maximum
Cost of Financing New Purchases – 10 points maximum
Balance Transfer Costs – 10 points maximum:

  • Clarity on APR for balance transfer – 4 points maximum
  • Clarity on fee for balance transfer – 4 points maximum
  • Proximity of balance transfer APR to balance transfer fee – 2 points maximum

Prominence of information has the following score allocation:

  • 100% of available points: when information on the categories of interest was prominently shown (i.e. visible when scanning the page) either on the summary or the landing page. In other words, applicants would likely come across the key information without actively looking for it. Clearly labeled tabs within the landing page are considered part of the landing page.
  • 60% of available points: when information can be found by clicking on a prominent link on the landing page, and the page to which it directs clearly displays the needed information. If the information is not clearly displayed for someone who is just scanning the page, then 30%.
  • 30% of available points: when information can be found in the footnotes of the page or in fine print, and there is a prevalent visual cue pointing to that section. If there is no visual cue or you need to click on a link from the footnotes, then 15%.
  • 0% of available points: when information is less prevalent than any of the above scenarios.

Note: It is important that the 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, whereas the balance transfer fee is listed on the “pricing and fees” tab further down the page, the consumer, seeing the APR and not knowing that a balance transfer fee exists, may not look for further pricing information.

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 format.

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 pass through another page (typically the issuer’s homepage for credit cards where all of their credit cards are listed) in order to arrive at the specific landing page of a credit card. Any information found on this page therefore was considered, as it is highly likely that applicants will see this information before they apply.

The final results of this study were sent to all issuers for verification of accuracy. Except for Alliant Credit Union, Golden 1 Credit Union, Star One Credit Union and San Diego County Credit Union, who could not provide feedback in a timely manner, all issuers kindly cooperated with the process.

 
UPDATE 8/7/2015: We inadvertently penalized two business credit cards in the Balance Transfer Cost category for listing this information in Terms and Conditions. The two cards — Chase Ink Business Plus and Cash Rewards for Business from Bank of America – do not offer balance transfers to online applicants and are thus ineligible for the category. The study has been updated to reflect this information.

Previous Pet Financing: Compare Veterinary Loans & Payment Plans   Invoice & Receivables Financing: Overview, Tips & More Next
DISCUSSION

Our content is intended for general educational purposes and should not be relied upon as the sole basis for managing your finances. Furthermore, the materials on this website do not constitute legal advice and should not be relied upon as such. If you have any legal questions, please consult an attorney. Please let us know if you have any questions or suggestions.