Hong Kong credit-card users are more financially disciplined than their global counterparts, yet 90 per cent of them do not have a full grasp of the fine print, according to the inaugural Hong Kong Credit Card Satisfaction Study by global research company JD Power.
It also found that card reward programs offering hotel stays and flights are among the most satisfying.
Showing financial discipline, 86 per cent of cardholders surveyed said they pay off their credit-card bills in full every month. This compares with 80 per cent in Singapore, 57 per cent in the US and 56 per cent in Australia.
Yet even as Hong Kong cardholders seek to avoid debt, their levels of understanding of card terms are contrastingly low. Nine out of 10 cardholders say they do not fully understand their cards’ terms, while two-thirds say they do not thoroughly understand the process of earning and redeeming card rewards.
Modelled after a 10-year-old US study, the inaugural Hong Kong research measured customer satisfaction with their primary card issuer by examining six key factors: interaction; card terms; billing and payment; rewards; benefits and services; and problem resolution. Satisfaction is calculated on a 1000-point scale.
“Considering that card issuers in Hong Kong are vigorously promoting the advantages of their cards, it is disappointing to see that so few people know how to make the most of the rewards program they have joined,” says JD Power director Gordon Shields.
“That said, there is considerable incentive for banks to communicate with and inform their customers more effectively: those who are familiar with their cards’ terms and rewards programs are significantly more satisfied with their card issuers, spend more money on their cards, and are more likely to recommend them to others.”
Overall, there is a 36-point gap in satisfaction between customers who fully understand their card terms (728) and those who do not (692). Regarding benefits, there is an upswing in monthly spend of HK$2168 (US$279.41) among the 27 per cent of cardholders who are aware of rewards.
Of the card brands, American Express ranks highest for satisfaction with an overall score of 745. The brand performs well across all six factors in the study.
DBS, a relatively new entrant into Hong Kong, ranks second with a score of 693, while HSBC follows closely at 691.
Other findings include the fact that most consumers hold multiple credit cards. On average, Hong Kong cardholders have four credit cards, but in the past 12 months have used just three of them.
Cardholders spend on average of HK$5469 each month on their primary card, and HK$9055 across all their cards.
The most common rewards redeemed are gift certificates/cards/vouchers (55 per cent), followed by cashback (47 per cent), and merchandise and airline tickets (both 22 per cent).
Cardholders who have switched issuers most often cite the reason as a better rewards program (40 per cent). Other reasons are better benefits (30 per cent), and for retailer discounts and promotions (22 per cent).
The study was based on responses from 2878 card holders in April and May.