Banking and Payments Intelligence Report
April 2024
Incremental Improvement
While the changes in customers’ financial health are modest, they are trending slightly upward. Nearly one-third (32%) of respondents are financially healthy, while 44% fall into the vulnerable category. These are the most encouraging levels we’ve observed since August 2023.
Customer sentiment regarding financial health status, stress levels and empowerment to improve one’s financial situation also ticked slightly upward to levels not seen since August 2023. These changes can be attributed to improving levels of customer savings to cover both short- and long-term needs.
Late Fee Cap Could Help
Even as conditions start to improve, 25% of customers say they have paid a credit card late fee in the past year. Unsurprisingly, this level is higher among financially unhealthy customers. When asked how much they paid on this late fee, 73% said the fee was more than the proposed $8 cap.
More than half (59%) of customers view the proposal to cap late fees as at least somewhat helpful, with 23% considering it to be very helpful. Younger customers—and those who are financially unhealthy—are the most likely to see the cap as a benefit.
Even though this proposed legislation could help some bank customers, most are unaware of it. Two-thirds (67%) said they have not heard of this proposed change. And even once they do hear about it, many customers doubt it will come to fruition. More than half (52%) of all respondents say they do not believe this change will take effect this year.
The Fraud Factor
As customers await changes on late fees, they are still grappling with instances of fraud on their bank accounts and credit cards. Nearly one-fourth (22%) believe their risk of fraud has increased during the past 12 months, with older customers more likely to believe they are more susceptible.
Customer ratings of both their bank and card issuer security protections have declined across all key metrics since June 2023, when JD Power established a baseline. Overall, customers with healthy financial situations and those under 40 years old are more likely to rate their bank or card issuer’s security higher.
Building Awareness
As customers begin a slow climb back toward better financial situations, many are still living in a precarious financial state. Receiving a large late fee on a credit card or falling victim to fraud could take a customer on the precipice of a healthier financial outlook and plunge them back into a vulnerable state.
As programs from governmental or in-house bank or credit card programs focused on tamping down late fees or bolstering security enter the marketplace, institutions will need to build awareness. It’s possible that even a small piece of aid could make a major difference.
Find out More
This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in March 2024. It was authored by Jennifer White, senior director of banking and payments intelligence at JD Power. Please contact us at the numbers below to connect with Ms. White or to learn more about the underlying research.
Media Contacts
Brian Jaklitsch; East Coast; 631-584-2200; [email protected]
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
