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Facing a conflicting stream of economic news that contains both positive economic indicators and continued uncertainty over the long-term fate of the United States economy, even the world’s leading economists cannot agree on the likelihood of a U.S. recession in the coming months.  

Bank customers in the U.S. are less optimistic, with a majority (86%) concerned that a recession will affect their everyday finances. The concern is understandable. According to JD Power data, just 35% of customers are financially healthy.[1] While that level is steady month-over-month, many customers are still feeling the pain of high prices and preparing for the worst. 

Financial Health Holds Steady Amid Rising Concerns                                                        

The number of customers who are financially healthy remained steady at 35% for a second consecutive month. This is the first time in over a year that customer health has not regressed after a one-month bump, giving some hope that the recent gains could be sustainable.

 

Despite the steady financial health numbers, the percentage of bank customers who say the cost of goods is increasing faster than their income rose sharply to 70%. The biggest gain was among healthy customers (59%), up 8 percentage points in the last month. 

 

Recession Confessions

Even as some customers firm up their financial footing, the looming threat of an economic downturn has the majority of people on edge. Overall, 86% are either somewhat or very worried that a recession will make things worse in their everyday life. This rate is highest among overextended customers (54%), followed by healthy customers (53%). 

When asked how prepared they are for a recession, 18% of customers say they are not at all prepared, and another 22% of customers say they do not know where to begin to get prepared. Just 9% of customers feel comfortable enough to weather a recession in their current economic situation.

Customers cite reducing their discretionary spending (47%), creating or building up an emergency fund (43%), or having more cash available (39%) most often as measures they can take to prepare for a recession. One-third (34%) say pay down debt, while only 9% say having access to more credit or loans. 

 

Building Partnerships

After finally making inroads on financial health, customers are worried about losing that progress. But instead of being paralyzed by fear, customers need to spring into action and plan contingencies. That’s where banks come in.

Customers seem to understand that preparedness is within their grasp. Instead of leaning on loans and more lines of credit, customers are ready to hunker down, reduce spending, and pay down their debt. But they may need help from their bank to devise a plan. With 40% of customers indicating that they either do not know how to go about preparing or do not know where to start in preparing for an economic lull, banks can tailor their communications to educate and triage in the event of any setbacks. Those who can do this effectively will reap the rewards of healthier customers and better relationships.

Find out More

This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in April 2025. 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]

 

[1] JD Power measures the financial health of any consumer as a metric combining their spending/savings ratio, creditworthiness, and safety net items like insurance coverage. Consumers are placed on a continuum from healthy to vulnerable.

New findings from the JD Power 2025 U.S. Direct Banking Satisfaction Study reveal how direct banks are shaping the future of banking by delivering more than just competitive rates. Paul McAdam, Senior Director of Banking and Payments Intelligence at JD Power, breaks down what’s driving satisfaction—and where direct banks still have work to do.

Growth Beyond Rates: Checking Satisfaction Rises

While savings satisfaction has taken a hit due to falling interest rates, checking satisfaction among direct bank customers is on the rise. What’s behind the upward trend?

“Customers are feeling like their direct bank checking accounts are helping them grow their money,” McAdam explained. “Not through interest, but through credit access, budgeting tools, and insights into their creditworthiness.”

These features go beyond the basics, supporting customers in managing their financial lives more holistically. As a result, customers are engaging more and reporting higher satisfaction with their checking relationships.

Savings Satisfaction Slips Amid Lower Deposit Rates

In contrast, satisfaction with savings accounts is declining. Interest rates have dropped, and customers are noticing.

But declining rates aren’t the only issue.

“We’re also seeing more frustration with website usability,” McAdam noted. “Navigation, login ease, and general user experience are falling short for some brands.”

With many customers accessing their savings accounts through digital platforms, a smooth experience is critical. Poor digital performance is now a differentiator and not in a good way.

Younger Customers Are More Engaged—And More Satisfied

Direct banks are gaining traction with younger customers, especially in the checking space. While the overall profile of a direct bank customer looks similar to a traditional bank customer, subtle differences are emerging.

“Younger customers are gravitating toward checking products, while older customers are more likely to hold savings accounts with direct banks and larger balances,” said McAdam.

This year, satisfaction rose among younger generations, thanks largely to their use of tools that support credit management and financial education. In contrast, older customers, particularly Gen X and Boomers, saw their satisfaction decline, driven primarily by lower interest rates.

Big Brands, Big Competition

Direct banks are no longer niche players. Leading the way are powerhouse brands like Charles Schwab and American Express—both of which topped the checking satisfaction rankings this year.

“These customers are serious about their relationships,” McAdam said. “They typically hold three or more accounts with their direct bank provider.”

The implication for traditional banks is clear: competition is intensifying, and digital-first players are quickly earning customer loyalty.

When Products Are Equal, Service Matters Most

Despite similar product offerings across brands, customer service remains a key differentiator, especially when something goes wrong.

“Direct bank customers don’t experience a lot of issues,” McAdam noted. “But when they do, service quality really matters. The lower-ranked brands are falling short on resolving problems and delivering strong phone support.”

This is a red flag for providers: product parity means that customer service quality can make or break the overall experience.

What’s Next for Direct Banking?

The 2025 study makes it clear that continued success in the direct banking space hinges on a few critical areas:

• Double down on value-added tools like credit tracking, budgeting, and expense management to keep younger customers engaged.
• Improve digital usability, especially on the savings side, where outdated platforms are dragging down satisfaction.
• Don’t overlook service—strong customer support is still one of the most powerful drivers of satisfaction and loyalty.

As direct banks continue to expand their footprint, delivering seamless and supportive experiences across digital and service channels will be the key to staying ahead.

Read the full findings in the JD Power 2025 U.S. Direct Banking Satisfaction Study press release.

Read Press Release

Consumer Financial Health Declines as Expenses Remain Elevated

The overall financial health¹  of retail bank customers in the United States declined in May following two consecutive months of improvement as they confront an uncertain economy and persistently high cost of goods. The top reasons cited among those who say they are worried their personal financial condition will worsen in the next three months are inflation, job security, government policies, housing and personal debt.

 

Financial Health Sags                                                       

After a two-month reprieve, the number of customers who are financially healthy dipped to 32%. This is largely in line with the level observed during the previous 12 months.

 

For a second consecutive month, 70% of bank customers said the cost of goods is increasing faster than their income. That percentage dipped slightly among healthy (57%) and overextended (58%) customers but rose among vulnerable (79%) and stressed (84%) customers. 

 

Recession Fears Slightly Tamed

Despite a decline in overall financial health, the number of bank customers who believe their future financial health is at risk of getting worse in the next three months has dipped slightly. Overall, 41% of customers think their finances are at risk, a 3-percentage point decrease. Stressed customers are the most concerned (46%).

When asked what they are most worried about in the next three months, cost of living expenses still topped the list, followed by managing household costs. Interestingly, concerns about the stock market declined 5 percentage points (22%).

 

 

Wait and See

In the current economic environment, it’s becoming increasingly difficult to read the tea leaves. But even as topline inflation rates decline and economists continue to disagree on the likelihood of a recession, it’s clear that household expenses and the future of the economy are still very much front-of-mind for customers.

For banks looking to help customers navigate these uncertain times, building a relationship and understanding what each customer values is key. Not all customers will have the same fears or needs, and they’ll require an individualized approach based on their finances, age, future plans, and a host of other variables. Banks that can cater to these specialized needs will build valuable relationships that will last beyond this period of volatility.

 

Find out More

This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in May 2025. 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]

 

[1] JD Power measures the financial health of any consumer as a metric combining their spending/savings ratio, creditworthiness, and safety net items like insurance coverage. Consumers are placed on a continuum from healthy to vulnerable.

The Financial Advice People Actually Want from Their Banks

Building deeper customer relationships now depends on how well banks understand and address the financial challenges consumers face. The 2025 U.S. Financial Health and Advice Satisfaction Study offers new insight into whether banks are meeting rising demand for financial advice and where they can improve. Jennifer White, senior director for banking and payments intelligence at JD Power joined the Financial Services Intelligence Update to share what advice U.S. customers want from their banks.

U.S. Financial Health Stabilizes, but Other Worries Persist

Jennifer described the current landscape as “a bit of good news, bad news.” While two-thirds of Americans are classified as financially unhealthy, a sobering long-term trend, the good news is that this decline has largely stabilized over the past year. 

Many consumers are caught in a state of cautious uncertainty. “They worry that in three months, things will cost more and they worry that a recession might become more than just a buzzword,” said White.  Widespread anxiety makes it a must for banks to provide relevant and reassuring financial guidance.

A Prime Opportunity to Win Over Younger Consumers

One of the most encouraging trends White highlighted is the growing interest in financial advice, particularly among younger consumers. Interest in value-added financial advice from banks rose from 19% in 2021 to 25% today.

The “sweet spot” is the young and emerging affluent. Younger customers show roughly twice the appetite for advice compared to those aged 65 and older. The strongest demand comes from the young and emerging affluent segment, with 38 percent expressing a strong interest in personalized financial guidance.

White called this shift “at least a once in a generation opportunity for banks to capture the hearts and minds of younger consumers.” Banks that successfully engage this group stand to build lasting loyalty.

What Financial Advice Are Bank Customers Looking For?

Today’s customers are looking for help with immediate financial challenges — not just long-term investment planning, explained White. Common questions include:

• How do I set aside money for an emergency?
• How much should I save?
• How do I stick to a budget and track my progress?
• How can I earmark money for goals without juggling multiple accounts?
• How can I change my financial situation in the short-term?

These are very short-run needs that, when met, position customers well for longer-term planning. Meeting these everyday needs can pave the way for deeper financial conversations.

Are Banks Effectively Delivering Financial Advice? Progress with Room to Grow

The study highlights encouraging improvements across three key areas:

1. Customer Attention: Customer recall of financial advice from banks rose from 34% in 2021 to 46% today — a clear sign banks are making progress in engaging customers.
2. Advice Quality: Banks stand out by delivering frequent, and personalized advice with a clear call to action.
3. Behavioral Impact: More customers are acting on the advice they receive, providing evidence that bank guidance is resonating and making a difference.

How Can Banks Improve to Improve Financial Advice Delivery

Customers want more value-added content, and they want it more often. They expect at least three meaningful advice interactions per year, delivered over time instead of clustered around tax season or specific events. Successful advice blends personal interactions, digital tools, and passive reminders such as emails and alerts.

“Even if customers don’t open the emails, the presence of these reminders builds trust and belief that the bank is there when needed,” said White. 

This omni-channel approach ensures customers feel supported whenever they need guidance.

The JD Power 2025 U.S. Financial Health and Advice Satisfaction Study is now available for those interested in a deeper dive.

Press Release 

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Essential Strategies for Tax Prep Marketers: Insights from a New JD Power Study

• New JD Power study coming soon: The upcoming inaugural JD Power U.S. Tax Preparation Satisfaction Study will provide a data-driven view of customer satisfaction across both DIY and assisted personal income tax preparation services.
• Anxious tax filers need reassurance: According to a JD Power U.S. Polaris Flash Report, more than 1 in 5 Americans surveyed indicate feeling more anxiety about their taxes than usual in 2025, creating a major opportunity for brands to build trust and confidence.
• Importance of data and accolades: Providing unbiased customer insights and competitive intelligence will help tax preparation brands and services understand what matters most to their customers and prospects, informing critical strategies while reinforcing their reputation and strengthening their competitive position.

 

Every year, tax season arrives, bringing a sense of urgency. For millions of Americans, it’s a time to gather documents, navigate forms and hope for a smooth filing experience. For tax preparation providers, however, it’s a high-stakes race to capture new customers and retain existing ones.

The landscape for tax preparation services has become increasingly competitive. Standing out requires more than just visibility; it’s crucial to foster credibility by having deep insight into customer needs and a clear understanding of what today’s filers value most.

Understanding Filer Motivations – Easing Anxiety

In 2025, 22% of Americans surveyed indicated feeling more anxiety about their taxes than usual.¹  This anxiety is particularly pronounced for younger or first-time filers, who often worry about making errors, overlooking deductions, or choosing a provider that won’t deliver essential support.²

By the time Tax Day approaches, more than 75% of marketing efforts are already in full swing,³ underscoring the importance of how smart, data-informed strategies can help tax preparation providers resonate with consumers and stand out from competitors. 

In this environment, brands need to do more than simply advertise; they need to build confidence and trust through their campaigns.  

Introducing the JD Power U.S. Tax Preparation Satisfaction Study

The inaugural JD Power U.S. Tax Preparation Satisfaction Study gathers feedback from both DIY and assisted filers, evaluating their experiences by looking at multiple drivers of satisfaction including:

• Resolved problems or questions
• Digital channels – website, mobile app
• People – tax professionals, representatives, call center/online chat agents
• Level of trust with brand
• Ease of preparation
• Value for price of tax preparation service
• Met my tax preparation and filing needs

The highest ranked tax preparation services provider in this annual study will have the opportunity to share their recognition with key audiences. As the trusted symbol of excellence, JD Power awards not only boost consideration for highest ranking brands but also distinguish top performers within their industries.

Trust: The Competitive Advantage

When tax preparation customers are anxious, trust becomes a valuable differentiator. In fact, the level of trust that a filer has with their tax preparation provider is one of the strongest predictors of satisfaction, according to the JD Power U.S. Tax Preparation Satisfaction Study. Trust can be cultivated through credibility, transparency, and a visible commitment to customer satisfaction. This is where independent third-party recognitions become important signals for filers looking for a tax preparation service they can rely on during this stressful period.

As Mike Foy, managing director and head of wealth intelligence at JD Power, explains:

“JD Power research reveals that taxes are a source of concern for more than 3 out of 4 consumers.⁴ This presents a powerful opportunity for tax preparation brands and services to differentiate in a competitive market. By showcasing a commitment to delivering a satisfying experience, providers can inspire the confidence and peace of mind filers need when navigating tax season.”

Next Steps for Marketers

Powered by these insights, how can tax preparation marketers effectively capture customer attention and build stronger connections this tax season? There are several key strategies, including:

• Harnessing independent customer data: Inform marketing campaigns with insights derived from verified customer feedback. Understand and proactively align messaging and value propositions with the reasons why consumers select and switch tax prep providers.
• Empowering and educating filers: Develop clear, concise educational materials that help customers feel more informed and confident about the tax filing process.
• Leveraging reputable third-party recognition: When available, prominently integrate well-known and credible third-party recognitions into your marketing. This powerfully differentiates your brand from competitors and inspires much-needed confidence among filers.

By tapping into real customer insights and leveraging trusted third-party recognitions, tax prep marketers can build stronger connections and stand out during a competitive tax season. Want to be the first to see the results when the JD Power 2025 U.S. Tax Preparation Service Study is released on August 6? 

Sign up here to receive the press release. 

What makes JD Power Different?

While today’s consumer can access countless online reviews and editor ratings, these sources often fail to capture the full picture, relying on feedback from a small, unrepresentative sample of consumers. 

JD Power recognition is powerful because it’s built on independent, large-scale research that reflects the real experiences of over 6 million verified customers annually. We collect data directly from consumers, ensuring our insights are grounded in actual experiences, not influenced by paid partnerships or editorial opinions. This independent data helps us identify key areas of satisfaction and common problems, providing actionable insights for both consumers looking to make informed decisions and businesses aiming to improve their offerings.

 

 ¹ JD Power U.S. Polaris Survey FLASH REPORT  March 12-19, 2025 

²https://www.jdpower.com/business/resources/april-18-looms-banks-turn-tech-help-customers-ease-their-tax-anxiety

³https://www.statista.com/statistics/971703/tv-advertising-spending-of-tax-preparation-services-usa/#:~:text=In%20total%2C%20tax%20preparation%20service%20providers%20spent%20192,U.S%20dollars%20on%20TV%20ads%20during%20that%20time

⁴https://www.thinkadvisor.com/2023/03/23/bank-customers-are-anxious-about-taxes-j-d-power

As Travel Seasons Ramps Up, More Customers Say They Will Stay Home for the Holidays

With inflation down from last holiday season and the U.S. Transportation Security Administration (TSA) having reported record-setting travel records this past Labor Day weekend, it seems the stars are aligned for a blockbuster holiday travel season. 

But according to JD Power data, bank customers in the United States aren’t necessarily readying to take to the roads and the skies in droves for the holidays this year. In fact, more customers say that they will remain home for the holidays this year than in 2023. 

That development may come as a surprise to some, with customers presumably having gained some financial breathing room during the past few months. And for those who will travel, 70% will travel by air and/or stay overnight. But with customers suffering from the fatigue of persistently high consumer prices, some are just content to forego traveling altogether.

 

Financial Health Remains Steady                                

The number of customers who are financially healthy¹ increased slightly to 33%, while 44% of bank customers fall into the vulnerable category. Notably, these levels reflect year-over-year improvements, which may imply a slightly higher holiday spending budget.

 

The number of bank customers who say that the cost of goods is increasing faster than their income held steady at 67%. Overextended customers saw a drop from 55% to 51%, potentially another harbinger of increased customer spending.

 

A Tame Turkey Day?

As Thanksgiving draws closer, bank customers have relatively modest holiday plans. The number of customers who say they will not travel during the holiday season increased to 46% from 39% a year ago. These levels are highest among vulnerable and stressed customers, as well as those over the age of 40.

Among those who do plan to travel, 43% say they plan to stay overnight in a hotel, motel, bed and breakfast, or an inn, while 27% say they plan to travel by air to their destination, 24% say they plan to stay at an overnight short-term rental, and 16% plan to rent a car. This implies that those who do travel are likely to spend a significant amount on their travel. This is particularly true of overextended and customers under the age of 40.

 

Holiday Helpers

After years of pent-up travel demand that accumulated during the pandemic, some customers are being more prudent about how and when they travel for the holidays. Still, there’s a big sentimentality to walking into your childhood home for Thanksgiving dinner. For those who do decide to take a trip in these next few weeks, banks can be valuable partners in guiding their travel spending.

Overextended customers are more likely to travel for the holidays than healthy customers, which means that budgeting tools could be a huge area of focus for banks even before the Black Friday shopping begins. Banks that can be active participants in helping customers make wiser travel decisions will likely be rewarded by thankful customers who will have a bit of a nostalgic hangover in the form of the reality of holiday shopping.

 

Find out More

This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in October 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]

 

[1] JD Power measures the financial health of any consumer as a metric combining their spending/savings ratio, creditworthiness, and safety net items like insurance coverage. Consumers are placed on a continuum from healthy to vulnerable.

Banking on Trust: Protecting Consumers from Fraud

JD Power Financial Services Intelligence Update 

How can banks and credit card issuers effectively safeguard consumers against fraud while meeting their expectations for protection and resolution? Jennifer White, Senior Director of Banking and Payments Intelligence at JD Power, explores key insights into customer perceptions and the actions financial institutions can take to enhance trust and satisfaction.

Proactive Protection Is Key

White explains, “What can be done ahead of bad action occurring is just as crucial as resolving fraud quickly with minimal friction.” The study highlights two distinct stages of fraud management: proactive measures to prevent incidents and swift, low-friction resolutions when they occur.

Surprising Findings

1. Consumer Behavior Gaps: While most consumers think they’re protecting themselves, nearly a quarter have taken no action in the last 90 days. Even more rely on reactive strategies like reviewing transactions after the fact.
2. Under-40s at Higher Risk: P2P transfers and debit card usage drive higher fraud rates among younger populations, debunking myths that older consumers are the most vulnerable.
3. Who Gets the Blame? Surprisingly, customers tend to blame fraudsters or themselves rather than their bank. This finding underscores the opportunity for banks to strengthen relationships post-incident.

Read more key findings.

View Press Release

 

Why Proactive Alerts Matter

The research shows that when financial institutions notify consumers about fraud—whether through alerts or direct communication—customer satisfaction soars. It’s a simple yet impactful way to show that you’re putting their safety first.

 

Where can you find more insights like this?  

The JD Power U.S. Financial Protection Satisfaction Study measures the experiences of customers of the largest retail banks and credit card issuers with the account protection and fraud resolution services provided by their financial institutions.

Read Study Details

More About These Experts 

Jennifer White, the Senior Director of Banking and Payments Intelligence at JD Power, is pivotal in shaping the financial industry’s understanding of consumer behavior. With over 20 years of market research experience, Jennifer leads prestigious studies, including the Retail Banking Satisfaction Studies and the Financial Health & Advice Program, driving critical insights that influence banking strategies across the U.S. and Canada. Her work on consumer financial health, digital banking trends, and fraud impacts is highly regarded and widely featured in top-tier publications like Forbes, The New York Times, and The Wall Street Journal. A respected thought leader and speaker, Jennifer’s expertise helps financial institutions enhance customer satisfaction, loyalty, and trust through innovative, data-driven strategies.

Miles Tullo is the managing director of the JD Power Financial Services team. He oversees the company’s consumer payments program, focusing on point-of-sale choice and non-credit card payment methods. Drawing from over 20 years of experience in both payments and mortgage lending, Miles brings valuable expertise to clients.  

 

With the Holidays Stretching Financial Limits, Some Customers Believe Banks Won’t Help Them in an Emergency

Banking and Payments Intelligence Report
December 2024

The holidays have arrived, and with them the annual surge in consumer spending. But against the backdrop of the highest jump in consumer prices in seven months, and with many bank customers in the United States still reeling from the past two years of inflation, there are some big financial health concerns to contend with this holiday season. Are the nation’s banks up to the task of helping their customers through this challenging time? Many bank customers feel they are not. 

According to JD Power data, 20% of customers say their bank does not offer any emergency services to support them during their challenging times, while only 36% feel completely confident that their bank provides financial education resources to help them manage their finances effectively.

With customers stretching their spending to meet the demands of the season, this puts the onus on banks to boost awareness around their emergency products to give their clients some peace of mind.

Financial Health Remains Stagnant                                                        

The number of customers who are financially healthy[1] decreased slightly in November to 31%, while 44% of bank customers fall into the vulnerable category. These levels have remained largely consistent for the bulk of 2024.

 

The number of bank customers who say the cost of goods is increasing faster than their income actually dropped slightly to 65%. Overextended customers saw a slight increase to 53%, while stressed customers dropped to 80% from 83%.

Bank Backup?

Amid this period of widespread economic uncertainty, it seems that many banks have struggled to instill confidence in their customers. Just 35% of customers say that their bank will completely help protect them against economic fluctuations, while 17% said banks will not protect them at all. Financially vulnerable customers and those over 40 years old were least likely to agree that banks would protect them.

To address concerns like these, many banks and financial institutions have introduced emergency support services, such as payment assistance programs. However, only 33% of bank customers completely agree that their banks offer emergency support services, such as micro-loans, lines of credit and fee waivers, while 20% say their bank does not offer any help at all.

 

Customers are also dismissive of the notion that their banks empower them to meet life’s financial challenges. Just 31% completely agree that banks empower them, while 12% said not at all. More than half (57%) say somewhat, which implies there are customers in the middle that can be won over. 

 

The Battle for Trust

If banks made an impression on customers during the era of 7% inflation, it certainly fails to resonate today. Many institutions built out huge awareness campaigns around emergency support services like fee waivers, but it’s clear that not all customers received the message. That means that banks need to go the extra mile now to win the hearts and minds they failed to on the first go-round.

No matter the economic conditions, customers’ financial health can ebb and flow throughout the year, and regardless of what the economic headlines say about topline inflation and economic recovery, many customers are still struggling with financial health. If banks can show the same kind of investment in helping customers out in an emergency before another tough stretch happens, it may resonate more than when customers are simply trying to keep their heads above water.    

Find out More

This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in November 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]

 

[1] JD Power measures the financial health of any consumer as a metric combining their spending/savings ratio, creditworthiness, and safety net items like insurance coverage. Consumers are placed on a continuum from healthy to vulnerable.

How Big Credit Card Trends of 2024 are Playing Out

As we approach the end of the year, the major storylines that have developed in the credit card industry are creating ripple effects through the entire financial landscape.

Even as inflation dropped to its lowest level since February 2021, customers are still trying to find their footing and they are leaning on their credit cards to help.

Using data from the JD Power 2024 U.S. Credit Card Satisfaction Study we have identified the biggest trends in the credit card industry this year and analyzed how customers are behaving in response to these trends. From late fees to card delinquencies to revolving card debt, here are three issues set to define the year ahead.

The Spirit of the Late Fee Cap            

This past March, the Consumer Financial Protection Bureau (CFPB) announced that it would be capping credit card late fees at $8 per occurrence. The news came as a welcome sign for customers. In the spring, 25% of credit card customers told JD Power that they had paid a late fee in the past 12 months, and 73% of those had paid more than $8.

But in May, the American Bankers Association (ABA) and U.S. Chamber of Commerce filed a legal challenge and a federal judge agreed, which blocked the CFPB’s plan to curb fees. The cap could be resurrected. In September, Former President Donald Trump made a campaign promise that, if elected, he would support a cap on credit card interest rates.

While the spirit of the rule seems consumer friendly, it’s worth noting that neither the late fee nor interest rate cap proposals would immediately affect the majority of U.S. cardholders. Only 18% of U.S. cardholders say they have paid more than an $8 late fee, and 24% of cardholders report having an interest rate above 10%. It’s likely these numbers are larger, as most cardholders don’t know such pricing details about their credit cards and may not be aware of even benefitting from such policy caps. Still, some think the policy will resonate with customers and as an early mover gesture. Notably, PNC and Wells Fargo have already begun reducing credit card late fees.

As is often the case, when one issuer finds success in a strategy, others follow. Keep an eye out for more issuers offering late fee caps to try to build goodwill with their existing customers while enticing new ones.

Are Card Delinquencies Really on the Rise?

While high consumer prices and inflation fatigue may make it seem like credit card payment delinquencies are on the rise, JD Power data finds that the level of revolving card debt and card late payment fees is flat year over year.

That said, cardholders do say they are having a harder time being able to pay their bills—credit card or other—on time now than they did in 2023 (ability to pay fell to 4.26 in 2024 vs. 4.29 in 2023 on a 5-point scale). While some brands are seeing their customers’ ability to pay bills on time fall significantly, brands with more financially healthy[1] customers and that have a single product focused on credit building are seeing improvements.

As issuers find more ways to attract desirable customers, some may opt to narrow their focus and tailor their marketing strategies to customers that are actively looking to consolidate or pay down their debt. Look for issuers to try to build awareness for their debt management tools as well, hoping to build engagement and bolster customer awareness and education.

Rich in Miles

After years of pent-up travel demand during the pandemic, customers are once again taking to the skies, and they’re doing so in record numbers. But after airline rewards credit cards came under attack at a May CFPB hearing, some analysts wondered if customers are actually racking up big credit card debt just to accrue airline miles.

According to JD Power data, 40% of airline cardholders have revolving debt, which is significantly below 51% all card average. Airline cardholders are also significantly more financially healthy (61% vs. 46% all card average) and are much more likely to say that their debt is completely manageable. Of course, there are exceptions, but by and large, airline cardholders tend to manage their finances relatively well.

It makes it clear why smaller carriers have an issue with bigger brands that can offer airline card miles: these types of customers are extremely attractive and they’re drawn to this perk. And while that may make it difficult for smaller carriers to compete in the marketplace for customers, it also places an onus on companies to find a way to match that kind of value proposition and offer a service that is as attractive as discounted airfare.

Finding the Opportunity

As issuers take appraisal of the developments of 2024, the experiences of the past 12 months offer a roadmap to new strategies for 2025. The marketplace is moving in a new direction, and a new breed of customers are prioritizing different things. How they are interacting with their credit cards, and what they hope to gain from a relationship with an issuer should influence these next steps.

Issuers that can digest this information and meet customers where they are will not only reap the benefits of increased customer loyalty and retention, but they will become more attractive in a very competitive marketplace.

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This Banking and Payments Intelligence Report is based on responses from 38,852 credit card customers nationwide and was fielded from June 2023-June 2024. It was authored by John Cabell, managing director of banking and payments intelligence at JD Power. Please contact us at the numbers below to connect with Mr. Cabell 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]

 

[1] JD Power measures the financial health of any consumer as a metric combining their spending/savings ratio, creditworthiness, and safety net items like insurance coverage. Consumers are placed on a continuum from healthy to vulnerable.

Get Ready for an Insurance ‘Shop-a-Palooza’ in 2025

Insurance Intelligence Report
December 2024

 

If 2024 was the year of the sky-high insurance premium, 2025 is shaping up to be the year when everyone is shopping for a lower rate. Auto insurance premiums led the way, reaching a record high average annual premium in the United States of $2,543, up 26% from 2023. Not to be outdone, homeowners and renters insurance rates exceeded both the rate of inflation and the average increases experienced by auto insurance customers during the year.

Perhaps not surprisingly, those increases were quickly followed by a surge in insurance shopping among consumers. By May 2024, nearly half (49%) of U.S. auto insurance customers said they were shopping for a new plan, and by the third quarter, auto insurance shopping rates had reached a record high. However, with virtually every carrier increasing rates, all those shoppers had very few alternatives and many stayed put. Now, that’s all about to change. 

This JD Power Insurance Intelligence Report dives into key data points trending in JD Power Insurance Intelligence studies, the quarterly LIST Report and across various industry data points to provide key insights into what may be on the horizon for the year ahead.

Bracing for a Wave of Shopping and Switching

The insurance rate inflation everyone experienced over the past two years was driven by a perfect storm of increased frequency and severity of damage to property, increased costs in the raw materials needed to conduct those repairs, and longer repair cycle times, all of which increased costs for insurers. For example, through June of this year, auto insurers were losing an average of five cents on every dollar of premium they collected. Thanks in part to all the premium increases introduced to combat this trend, however, property and casualty (P&C) insurance profitability started to improve throughout the second half of the year. The industry is expected to return to profitability by the end of 2024.

That will likely make 2025 a major tipping point for policy shopping and switching. After the past three years spent shoring up their operations and scaling back growth initiatives, insurers are going to be on the hunt for new customers in 2025 and all indications are that customers will be more than willing to comparison shop their policies and jump ship for a better rate. According to our quarterly LIST Report for Q3 of 2024, policy shopping activity hit a record high of 13.8% in September. Since then, shopping rates have stayed elevated, hitting 13.8% again in October and dipping slightly to 13.6% in November. Switch rates also increased, peaking at 4.6% in August. As more competition starts to heat up between carriers, switch rates may increase further in 2025.

Usage-Base Insurance Goes Mainstream

Another major tipping point we expect to see in the year ahead is more widespread adoption of usage-based insurance (UBI) policies, which use telematics technology to track customer driving patterns and offer discounts based on safe driving and fewer miles driven. According to JD Power data, even though many drivers consider UBI policies when shopping for auto insurance, just 17% ultimately buy them. While that’s double the rate of UBI uptake we saw eight years ago, when these programs were still in the early stages of being adopted by customers, it still reflects a surprising plateau considering the hunt customers have been on for premium savings in the face of rising rates. 

However, our data has also found that insurers had pulled back on offering UBI programs to their customers in 2024 as they focused on rate taking and profitability. In fact, just 15% of insurance shoppers were offered access to UBI programs when shopping for their policies this year, down from 22% in 2023. We also found that customer satisfaction scores are considerably higher among those who opt-in to UBI programs. On average, overall satisfaction among new customers participating in a UBI program is 64 points higher (on a 1,000-point scale) than new customers who choose not to participate in UBI programs.

The bump in customer satisfaction that’s coming from UBI, combined with a surge in rate-driven shopping and switching activity and continued interest among insurers in courting new customers have set the stage for a significant jump in UBI adoption.

Digital Keeps Getting Better

One of the silver linings of this past year of high rates, strained customer satisfaction and low profitability was the increased adoption of digital channels and a growing appreciation for the efficiencies they’ve brought to the industry. Overall customer satisfaction with the auto and home insurance digital claims experience rose 17 points this year, driven largely by improvements in the range of services offered on mobile apps and websites and the visual appeal of those digital properties. Investments in mobile apps, particularly in the claim reporting process, are paying off as claims reported through this channel have higher satisfaction than any other method, even surpassing agents and call centers.

The improvements in the digital process are also having a positive impact on reducing cycle times. In fact, we saw the highest rates of insurers using customer-submitted photos in the estimation process, this year, which cuts down on time needed to arrange in-person inspections. For auto repair claims filed in 2024, the average repair cycle time has improved by five full days, driven in part by higher usage rates of photos and continued improvement in shop backlog. Additionally, the 2024 U.S. Auto Claims Satisfaction Study found that customers who stay in digital channels throughout the claim—reporting their claim, submitting photos and videos, and receiving updates—had significantly higher overall satisfaction scores. However, only 13% of customers utilize the app for all 3 of these tasks, representing a key opportunity for the industry to increase utilization. 

 

 

 

A Pivotal Year Ahead

While the trends shaping up to play out in 2025 could spell some relief to consumers who’ve been surviving through a period of significant rate increases for the better part of three years, they will make for a volatile year for carriers. With costs not likely getting any lower and customers consistently demanding more—and voting with their wallets to get it—we’re likely to see a price battle emerge throughout the year. 

Throughout, those insurers who keep improving their offerings, make it easier for their customers to work with them, and consistently demonstrate their value to customers will be those who are in the best position to weather this volatility. Winning in the current environment is about combining the highest possible degree of operational efficiency with the most engaged, personalized and supportive customer-facing front end. Insurers who can get that balance right will be those who thrive regardless of what comes down the pike in 2025.

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This Insurance Intelligence Report is based on data and insights from the JD Power 2024 U.S. Auto Insurance Study, the JD Power 2024 U.S. Insurance Shopping Study, the JD Power 2024 U.S. Home Insurance Study, the JD Power 2024 U.S. Insurance Digital Experience Study, the JD Power 2024 U.S. Auto Claims Satisfaction Study, the JD Power 2024 U.S. Claims Digital Experience Study, and the JD Power LIST Report for Q3 2024. It was authored by Stephen Crewdson, senior director; Mark Garrett, director; and Amy Feeman, consumer insights analyst, insurance intelligence at JD Power. Please contact us at the numbers below to connect with the team 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]