It was in July 2011 that IndexCreditCards.com first reported plans of federal regulator the Consumer Financial Protection Bureau (CFPB) to accept complaints about a range of products, including credit cards. Now, the watchdog has opened up for online public scrutiny its database of complaints, allowing consumers to see which card issuers are complained about most, and which gripes arise most.

Credit card companies named

We at IndexCreditCards.com are always up for a bit of mischief so we spent playtime on the database, counting up the number of complaints received by each of the big credit card companies. At the time of our visit, there was a total of 19,823 complaints, but that number’s constantly growing as new ones are posted. Our methodology was simple: click on the Company heading, tell it to sort in ascending order, and then scroll down, noting the row number at which each issuer’s complaints started and subtracting that from the row number at which they ended. We didn’t count entries for smaller credit card companies, so the percentages below don’t add up to 100.

Here’s what we found:

1. Capital One: 4,228 (21.3 percent)
2. Citi: 3,500 (17.7 percent)
3. Bank of America: 2,645 (13.3 percent)
4. JPMorgan Chase: 2,557 (12.9 percnt)
5. American Express: 1,221 (6.2 percent)
6. Discover: 947 (4.8 percent)

But…

That was a bit of fun, especially as few pursuits are more pleasurable than spreading panic and gloom among credit card companies’ marketing departments. But, in truth, the usefulness of that table is limited. Here are three reasons why:

1. It’s no suprise that those that issue the most cards are the ones that attract the most complaints. And without good information about how much plastic each company has in circulation (something few issuers publish) it’s impossible to draw useful conclusions.
2. The database is still small — though it should grow bigger and more useful. Fewer than 20,000 complaints, compiled over 16 months, isn’t a statistically impressive base.
3. For all we know, there is a specific demographic and psychographic that contain people who are most likely to make complaints to federal regulators.

Consumers’ credit card grievances

A fourth reason to take that complaints league table with a pinch of salt is the fact that some of the grievances it contains are groundless. In its Snapshot of Consumer Complaints, also published on March 28, the watchdog expanded on billing disputes, the number-1 complaint. These, it explained, are often a result of consumers being unaware that they have only 60 days within which to challenge a statement inaccuracy. Other problems arise because some customers overestimate an issuer’s ability (or willingness) to reverse a merchant’s charge once the card user has authorized it, and because others mistakenly believe they have the automatic right to ignore a store’s no-return policy if they’ve paid with a credit card.

Also in that Snapshot document, the CFPB lists the 10 most common credit card complaints, which between them make up 69 percent of all reported gripes:

1. Billing disputes: 15 percent
2. Interest rate issues: 10 percent
3. Identity theft/fraud/embezzlement: 8 percent
4. Credit reporting: 7 percent
5. Closing or cancelling accounts: 6 percent
6. Other: 6 percent
7. Collection practices: 5 percent
8. Late fees: 4 percent
9. Credit card or debt protections: 4 percent
10. Collection debt disputes: 4 percent

Choosing credit cards

More importantly than any of the above to the usefulness of that complaints league table is its applicability in your life. Let’s face it, the statistically insignificant chances of your having to make a complaint should probably be a long way down your list of criteria when picking the plastic that suits you best. Credit card rates, rewards, balance transfers, perks… there are many other more important factors.

And, if customer service really is that important to you, then you might be better off using J.D. Power and Associates’ 2012 U.S. Credit Card Satisfaction Study as a basis for your decisions. This ranked, in order, American Express, Discover, Chase and Barclaycard as above average.

CFPB role still valuable

The fact the CFPB’s database isn’t all that helpful when it comes to choosing your next credit card doesn’t, in at least three respects, make the regulator’s wider role less valuable:

1. Acting as a go-between for complaints (receiving them from members of the public, forwarding them to issuers, and then monitoring progress and outcomes) adds a useful level of transparency to the process that is missing when consumers deal directly with their companies.
2. Publishing anonymized information on every complaint provides an incentive for card issuers to up their games when resolving customer issues, especially as the timeliness of resolutions forms part of the record.
3. By compiling data about the nature of each complaint, the watchdog builds up a picture of where problems are arising for each issuer. Armed with solid information, it can then, if necessary, intervene, first by opening a dialog with the offending company, and, if that fails, by imposing regulation.

All of which means the database does so much more than just provide endless fun for us baiters of credit card marketers.

Published 04/15/13 (Modified 11/20/13)