With so much competition in the credit card industry, customers have more choices than ever before. Credit card companies are trying to set their cards apart from the competition by providing unique services and features to not only attract new customers, but also retain existing card holders. From our extensive user research in the financial services industry, we’ve identified trends of credit card customer needs and how companies are responding to these needs with unique services that surprise and delight customers. If you’re looking for ways to innovate your credit card products and services, take a look at these evolving customer needs and potential solutions you can apply.
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Raise awareness of credit card benefits
Customers aren’t aware of all their credit card benefits
We’ve found that most customers focus on a small set of credit card benefits that they use regularly. But many have forgotten, or never learned about, the many other benefits they could be taking advantage of. Many customers we’ve spoken with feel they don’t receive effective communication from their credit card company about their card perks and benefits. Nearly all companies have entire sections of their websites that list their card benefits; yet, customers rarely take the time to visit them.
This presents a danger for credit card companies when customers are tempted by other credit cards that tout benefits that they don’t realize they already have. For cards with an annual fee, we’ve heard customers say that they do a mental cost-benefit analysis of whether it’s worth keeping their card. If they’re not aware of all their card benefits, it becomes difficult to justify the cost of the annual fee.
Show customers the actual value they’ve received from their cards
Credit card companies are exploring ways to make card benefits more visible and feel more tangible to customers. Similar to displaying customers’ reward point balances, show customers the actual dollar value that they’ve received by using their card benefits, perks, and offers year-to-date. This makes the card’s value more tangible and helps customers justify paying the annual fee. Even for cards with no annual fee, showing customers the value they’re receiving can help retain their loyalty and avoid the temptation of other cards.
The same technique can be used to show the value of the benefits customers aren’t using. Seeing the value can incentivize them to investigate those additional benefits and try them out.
Suggest perks and benefits based on customers’ spending behaviors
Even when customers do take the time to learn about their cards’ benefits, they often forget about them when they’re in the situation to use them. To remind customers of their benefits, some companies provide location-based alerts. For example, when customers arrive at the airport, they receive a notification of their airline lounge benefit. Some companies also proactively remind customers of their perks and benefits based on their spending behavior. For example, after making a travel-related purchase, such as buying airline tickets, customers receive notifications about their card’s travel perks, such as hotel offers, rental car insurance, and travel insurance.
Help customers discover relevant offers
Customers are often unaware of offers
Most customers appreciate credit card offers, in which they get a discount or cash back from their purchases at selected merchants. However, they are often unaware of these offers, forget to take advantage of them, or learn about them too late, after making a purchase. When they proactively seek out offers, they have to navigate through a long, scrolling list of irrelevant offers from stores that they don’t shop at with products and services that may not match their interests.
Provide personalized and location-based offers
Some companies are exploring ways to suggest personalized offers to customers based on their spending history, such as offers from merchants that they’ve previously shopped at or from merchants offering similar products. To alert customers of offers at the moment they’re ready to use them, some card companies provide location-based notifications of offers at nearby stores via push notifications. These companies make it easy for customers to sign up for offers in a single click, without requiring them to log into the website or app.
Provide credit tools for financial literacy
Customers need help with their credit scores
Most customers want easy access to their credit scores, and many need help improving their credit. However, most aren’t aware of the factors that affect their credit scores or how to improve them.
Although anyone can get a free credit report once a year from each of the three credit agencies through annualcreditreport.com, all of these companies charge a fee or require customers to sign up for their credit monitoring services to see their credit score year round. Newer services like Credit Karma and Mint now provide free access to credit scores. However, card companies have a real opportunity to expand into this space, providing an all-in-one, easy approach for customers.
Provide customers with credit scores and tools
Many credit card companies, who have long had access to customers’ credit information, now share that credit information with customers as a free service. Customers can view their credit scores, read the positive and negative factors that impact their scores, and see visualizations of the changes in their credit scores over time. Some credit card companies go even further by providing personalized tips to improve credit scores, the ability to set credit score goals, and free credit monitoring to alert customers of major changes to their credit reports.
Help customers manage their recurring charges
Customers have difficulty keeping track of their recurring charges
From streaming services to app subscriptions to gym memberships, it seems there are more services than ever that charge a monthly or yearly fee. Many customers have a difficult time keeping track of all those services. As a result, they often forget to cancel a service until it’s too late, after it automatically renews.
Customers also face the difficulty of keeping their credit card numbers up to date across their subscriptions. Not only do credit card numbers expire every few years, numbers change even more frequently when a card is lost or stolen. When this happens, customers struggle to remember every company that charges their cards and have to dig through their statements and transaction history to find them all. The task of updating their card numbers with each company can become a big hassle.
Highlight recurring charges
Some credit card companies now provide customers with a list of recurring charges, making it easy for them to review and consider which services they want to keep. Even further, some companies send notifications of increases in recurring charges, annual fees that will soon be charged, and free trials that are about to end.
To save customers from the tedious task of updating their card information with merchants each time their credit card number changes, some companies automatically make these updates for them. However, we’ve found that many customers aren’t aware that their credit card company provides this service. Credit card companies should make this service more visible to customers to show the value they’re adding by undertaking this unpleasant task.
Help customers view and analyze their spending
Customers want a deeper understanding of their spending habits
We’ve heard from many credit card customers that they want to better understand their spending habits. Credit card companies have a lot of information about each of their customer’s spending, but in the past haven’t done much more than show customers their individual transactions. Reviewing a list of transactions doesn't give customers a higher level view of their spending. We’ve heard from customers that they want to see monthly spending reports to help them monitor their spending and budgets. Customers can achieve that using budgeting software, such as Quicken and Mint, but setting up separate accounts requires a lot of additional work downloading and categorizing transactions.
Show customers clear and understandable spending insights
Although many credit card companies give customers a year-end summary of their spending, these usually show only very high-level categories and don’t allow customers to see spending insights on a regular, more frequent cadence. Some companies are exploring using customers’ spending data to give them monthly insights in a variety of aspects, such as spending by category, changes in category spending over time, spending by merchant, spending by card member, day of the week spending trends, average transaction size, account balance over time, credit card rewards balance over time, comparing spending month to month, and comparing monthly spending to the same month from the previous year. The benefit of providing these spending reports is that it can encourage customers to make all of their purchases on this one card in order to see all of their spending in these reports.
Prevent automatic charges at the end of free trials
Customers unexpectedly get charged at the end of free trials they wanted to cancel
Most free trials require customers to provide their credit card information upfront, so they can begin charging after the trial period. These companies know that most customers will fail to cancel the service on time and end up getting charged monthly fees. Some customers even forget about these charges until they take a closer look at their statements.
Provide virtual one-time use credit cards for free trial sign-ups
In addition to alerting customers of upcoming recurring or automatic charges as I shared earlier, some credit card companies have begun to provide virtual credit cards, specifically for making one-time purchases and free trial sign-ups. These virtual cards are connected to the customer’s actual credit card account, but they have a different card number, expiration date, and CVV number. If customers use a virtual card to sign up for a free trial, the merchant isn’t able to charge that virtual card number at the end of the free trial period. This empowers the customer to decide whether they want to continue the service by providing their actual credit card number.
Virtual one-time use cards are also useful as a secure method of payment on unfamiliar ecommerce sites. Customers can make a purchase and feel safe that if their credit card number is stolen, it won’t be used again.
Help customers explore payment scenarios
Customers need help paying off their credit card balances
Customers who carry large credit card balances often need help paying them off, especially in the current financial climate. Many customers are intimidated by large balances and simply pay the minimum without considering how much they could afford to pay, how much interest they will end up paying over time, or how long it will take them to pay off the entire balance. While they have the option to call customer service to work out a payment plan, some feel uncomfortable or ashamed to ask for help. And others feel they don’t have the time to call customer service and work out a plan.
Provide tools to help customers experiment with payment options
Some credit card companies now provide online tools to allow customers to explore various payment options. They can experiment with different payment amounts to see how long it would take to pay off their balance and how much total interest they would end up paying in different scenarios. Some customers feel more comfortable exploring these payment options on their own rather than talking with customer service. Others appreciate trying out different scenarios themselves first before speaking with someone to arrange a payment plan.
Provide saving options
Customers have difficulty saving money
We’ve heard from many customers that they have difficulty saving. After paying for their everyday expenses, many do not have money leftover at the end of the month to put in savings. Studies have shown that the best way to save is to automate the saving process, so that it’s not even a conscious choice customers need to make. Most people don’t notice when they automatically put away small amounts in savings, and it can add up dramatically over time.
Create automated saving options to encourage saving
Some credit card companies are exploring unique tools to help customers save that lean into automation. One option is automatically rounding up each purchase to the nearest dollar, five dollars, or ten dollars, and putting that amount in a savings or investment account. Other companies give customers the option to put their credit card’s cash back rewards into a savings account.
Provide the ability to manage additional card holders’ spending
Customers want control over additional card members’ spending
Some customers add family members as additional card holders on their credit card account to track their spending or to maximize credit card rewards. Others add a college-age child to their credit card account as a way to give them their first experiences using credit. The primary card holder often wants to monitor and have some control over the secondary card holder’s spending. This is especially important for parents who are giving a child their first credit card.
Give primary card holders the ability to monitor and manage additional card holders’ spending
In addition to showing each card holder’s spending, some companies also allow the primary card holder to set monthly, weekly, or daily spending limits for additional cardholders. Some provide the ability to set limits on the time of day the card can be used, the types of merchants the card can be used at, or even limiting the merchants that the card can be used with. Giving primary card holders this extra peace of mind can encourage them to add additional card holders. For those who add their children as additional card holders, it helps companies start a relationship with those potential new customers.
Regardless of the industry, the best way to differentiate your product from competitors is to provide features and services that customers aren’t getting from the competition. There’s no better way to understand customers' current experiences and unmet needs than conducting UX research. Once you’ve designed possible solutions, UX research can help you evaluate them to refine and create the best products and services that meet evolving customer needs.
Take the Next Steps:
- Learn how we help financial services clients with UX research
- Read the article, How Financial Services Brands are Taking a Holistic Approach with their Customers