Credit Card Satisfaction Highest Among Customers With No Annual Fee
According to a new study from Discover, customers are most satisfied with their credit cards when they do not have to pay an annual fee. Seventy percent of cardholders without an annual fee said they were ‘very satisfied’ with their cards, compared to 35% who had an annual fee.
Furthermore, 60% of cardholders said having no annual fee was very important when choosing a credit card. Over half (54%) the respondents said they would consider switching cards to avoid paying an annual fee.
The average annual fee was between $51 and $100 per year. There are many luxury travel cards that boast a much higher fee: the Chase Sapphire Reserve Card, Citi AAdvantage Executive World Elite Mastercard, and Mastercard Black Card all carry annual fees of at least $450.
With regards to why consumers would pay any annual fee, the biggest reason was for high cash back rewards (52%). Consumers cited travel benefits as another reason (48%).
About one in three cardholders regret paying an annual fee at the one-year mark. For some, this is the first time paying an annual fee because the first year was waived. For others, this is a time to reflect on the benefits they received from their card and determine if they offset the cost of that annual fee. The survey showed 37% of respondents said they had closed a credit card because of the annual fee.