Credit card customers are the happiest they've been since the financial crisis, thanks in part to a government crackdown on the card industry.

The sweeping 2009 Credit Card Accountability, Responsibility and Disclosure Act made it more difficult for lenders to charge some fees and to raise interest rates at any time, for any reason. It also required issuers to simplify their disclosures to customers.

That is one reason why U.S. credit card customer satisfaction has risen to its highest point since 2008, according to an annual survey J.D. Power and Associates was due to release on Thursday morning.

"The transparency created by the legislation helped," says Michael Beird, director of banking services at J.D. Power and Associates, a division of McGraw-Hill Cos.

"We see it in fees and rates … and the [new] layout and design of people's statements were generally well-received," he adds.

Overall credit card satisfaction rose to 731 on J.D. Power's 1,000-point scale in 2011, from 714 in 2010.

Customer satisfaction levels had plummeted to 705 in 2009, as many people stopped paying their credit card bills during the financial crisis and banks closed accounts, raised interest rates, and cut back on the credit they were willing to extend to all but the most pristine borrowers.

In May of that year, President Barack Obama signed the Credit Card Act. The law was fiercely protested by the credit card industry for its restrictions on many once-common practices, including the banks' ability to charge a wide array of fees and to easily change interest rates.

The last major compliance deadline for banks under the law was in August 2010, meaning that credit card lenders and their customers have now had a year to adjust to their new relationships.

U.S. card issuers lost some $11 billion in annual revenues from the law, according to card consultancy R.K. Hammer.

But despite the pain, the law has had a silver lining for banks and their customers. More customers understand their credit card terms than a year ago, and fewer customers reported increases in their interest rates, according to J.D. Power.

As a result, the overall reputation of credit card issuers' brands has improved, Beird says.

"The issuers have to do more to educate their customers now. ... This is the second year in a row they've improved" customer satisfaction, he says.

The survey, which J.D. Power has conducted annually since 2007, scores credit card lenders according to six factors: interaction with their customers; credit card terms; billing and payment processes; rewards; benefits and services; and problem resolution.

American Express Co. successfully defended its now five-time title as the best issuer for customer satisfaction, closely followed by Discover Financial Services.

But HSBC Holdings PLC, which is selling a $30 billion U.S. private-label and general-purpose card portfolio to Capital One Financial Corp., ranked at the bottom of J.D. Power's list — proving once again to lenders how tricky it can be to manage a retail credit card portfolio.

"It's probably the retail nature of the cards … and their customers typically have some of the lower credit scores," Beird says.


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