Do Credit Card Customer Service Agents Know Their Stuff?

Just last month, Discover took the top spot in the 2015 U.S. Credit Card Satisfaction Survey, an annual study measuring customer satisfaction based on consumer interactions, credit card terms, billing and payment, rewards, benefits and services, and problem resolution.

Based on this criteria, Discover earned a score of 828 out of a possible 1,000, and secured top billing for the second year in a row. With scores of 820 and 792 respectively, American Express and Chase came in at second and third place. According to the survey findings, rewards and benefits were the two biggest factors driving customers’ credit card selections this year.

The survey showed that rewards redemptions are up overall, with 67% of customers using at least one credit card benefit in the past year (compared to just 57% in 2014). And that appeared to play a part in how each credit card issuer was rated. As the data indicate, customers who earn and burn rewards are much happier with their experience than those who do not.

But what about the customer service part of the equation?

The fact is, credit card issuers are notorious for offering bad and often unpredictable customer service. Raise your hand if you have ever called American Express and been transferred to someone with an Americanized name like “Jason” or “Mary” who speaks spotty English at best, or been transferred from department to department for hours on end.

Even when you get someone you can understand, some agents don’t have the answers you need. When that happens, you could wind up on the receiving end of bad credit advice, or worse, no answers at all.

Customer Service Survey: How Five Credit Card Call Centers Answered Basic Questions About Credit

With that in mind, we cooked up a little experiment to test the credit knowledge and level of customer service among the top five card issuers. Not only did we want to see if the agents who answered knew their stuff, but we also wanted to gauge their overall politeness and willingness to help.

At the end of the day, each agent we spoke to was polite and courteous, although a few offered responses that were misleading – or even downright wrong.

Here’s how each card issuer – Chase, Citi, American Express, Discover, and Capital One – handled our calls and credit questions when I called up each one over Labor Day weekend:

Question #1: Can you tell me how my credit card interest is calculated?

The Truth: We’ve written about the way credit card interest is calculated before, and it is complex. Basically goes like this:

Although you probably think of credit card interest in terms of your APR, or your annual percentage rate, interest is actually calculated daily using the DPR, or daily periodic rate. You can find your card’s DPR by dividing your APR by 365 — the number of days in the year. Once you determine your card’s DPR, you can see much interest you accrue daily by applying that percentage to the average daily balance on your card.

Chase: A Chase customer service agent named Chris from Manchester, Ohio, nailed this one, while also being as friendly as all get-out:

“The formula for figuring out interest is taking the APR and dividing it by 365. Then multiply that by the number of days in the billing cycle, then you multiply that by the balance subject to interest,” said Chris. “Then divide that by 100. That leads to the monthly interest charge. Interest accrues daily. That is why you divide the APR by 365.”

Citi: A Citi agent named Jean from the Philippines did a decent job explaining that credit card interest accrues daily, although she was light on the details. Hey, at least she wasn’t wrong on this one!

“So um……when you revolve a balance from month to month and accrue interest charge, those interest charges will begin to accrue from the date the transaction is put on your balance,” she explained. “They will continue to accrue until payment in full is credited to your account. … credit card interest accrues on a daily basis.”

American Express: Things got a little crazy when I posed this question to Renee, an American Express agent who was also from the Philippines. While she was right about the fact that interest accrues daily, she was dead-wrong on how it accrues.

“We definitely calculate the interest charges on a daily basis,” explained Renee from American Express. “If you owe $10,000, and then on the due date you only pay $5,000, we’re going charge you an interest for $5,000 on the first day of that billing cycle.”

Unfortunately, Renee was insistent that interest accrues daily based on the annual percentage rate, which is absolutely wrong. I asked, “So, if my interest charge is 15%, it adds that daily? 15% per day?”

“That is correct, ma’am,” she said. (No, it’s not.)

Capital One: Meanwhile, a Capital One agent from Central America, “Frank,” offered an excellent response to this question with no hesitation at all:

“You start by taking the APR and dividing it by 365. Then multiply that by the number of days in the billing cycle, then you multiply that figure by your credit card balance,” he said. “Then divide that by 100. The figure you are left with is your monthly interest charge.”

Discover: Surprisingly, an agent from Discover named Kelly blew my question off and offered few details. When asked how credit card interest is calculated, she started off by explaining that the APR is the interest rate charged over the course of the year. When I asked for a further explanation, here’s what she offered:

“Interest is actually accrued daily, but only if you don’t pay your balance on the due date,” she said. “You are charged the APR for the entire year. I can’t tell you any further than that.”

Alrighty then.

Question #2: Will closing a credit card hurt my credit?

The Truth: This question was a little tricky since credit card customer service agents aren’t necessarily credit experts. Still, here’s the truth: closing a credit card can impact your credit score in a negative way, although any change to your score is usually only temporary.

While the Chase agent stated that he was “required to say it could impact my credit,” Jean from Citi noted that closing an account could hurt my credit since, “every time a credit card is closed it is reported to the credit bureau.”

Renee from American Express agreed: “If you cancel your account, it will affect your credit score,” she said. “You might want to contact the credit bureau.”

Overall, I’d say that’s pretty good advice. Both Capital One and Discover declined to comment on whether or not closing a credit card can hurt your credit. Hey, that’s better than a wrong answer, right?

Question #3: Can I pay my credit card with another credit card… like, forever?

The Truth: In a more fun world, credit card bills would never come due and we could just pay credit cards bills with other credit cards until the end of time.

Unfortunately, we don’t live in that world, and even if you play a shell game for a while, it will eventually catch up to you. Still, I wanted to see what customer service agents would say if I posed this question to them: “Can you just pay a credit card with another?” The answers I got were wide and varied.

Chase: Chris from Chase was adamant that this wasn’t possible. “No,” he said, although he did mention the possibility of balance transfers to buy some time.

You might be able to transfer debt around for a while, he said, “but you’ll eventually run out of offers.” He also reminded me that you cannot transfer a balance between Chase credit card accounts.

Citi: Jean from the Philippines may have misunderstood the question, but I’ll post her response anyway:

“Yes,” she said. “For example, if you have a balance transfer offer, you can transfer to your checking account and pay off your other credit card.”

Mmmm… okay.

American Express: The AmEx agent from the Philippines offered a similar response, which may be a reflection of the language barrier between us.

“No,” she said when asked if you could pay one credit card with another credit card. “But if that credit card links to a checking account or bank account,” she added, “then you can. We just have to get the routing number. We can definitely do that on the account.”

Capital One: Frank from Capital One, on the other hand, put the smack down on my idea of paying one credit card with another indefinitely. When asked, he gave a flat out “no,” but his tone was really saying, “Hell, no!”

“At Capital One, you can only pay your credit card with a checking or savings account,” he said, with no mention of balance transfers. It seemed like he was trying to avoid encouraging me.

Discover: And when I asked Kelly from Discover if I could pay one credit card off with another over and over, she wasn’t impressed, either.

“We wouldn’t recommend that,” she said.

Smart woman.

Question #4: How do you apply my payments?

The Truth: Thanks to the Credit CARD Act of 2009, any amount you pay over your minimum monthly credit card payment must be applied to your balance with the highest APR. But the CARD Act has no such requirement on how your minimum payment is applied, leaving each card issuer to implement their own policy and post it within their card’s terms and conditions.

Since many credit cards offer different APRs for things like balance transfers, cash advances, and regular spending, this change has been crucial. With the Credit CARD Act of 2009 in place, and card issuers forced to apply extra payments to the highest interest balances, paying down credit card debt is now a lot easier.

When asked how payments are applied in this respect, here’s how each of the five card issuers we contacted replied.

Chase: Chris was right on the money, even sharing the fact that Chase added this benefit to their business credit card account as well.

Chase’s Chris said, “The minimum payment goes to the balance with the lowest APR. Anything you pay over goes to the balance with the highest APR. That rule used to be in place just for personal accounts, but we now use that formula for our business accounts as well.”

Citi: Jean from Citi also did her best to explain how it works:

“The minimum payment due is allocated to lower APR before the higher rate balance. Any payment in excess goes towards the higher rate balance,” she said. “For example, if you paid $500 and had a minimum payment of $50, $450 goes towards higher rate balance.”

American Express: Unfortunately, all rhyme or reason went out the window when I posed this question to Renee from American Express. She started talking and I kept listening, trying to make sense of it all. Hint: It didn’t work. Here’s what she said:

“It really depends on your account. If you do have a typical card, it depends. If you have a card with a bill-over-time feature, some of your charges go on that feature. On that balance, we assess the finance charge,” she said.

Renee continued: “When we receive a payment, it will usually satisfy the current minimum payment due on your bill-over-time feature. After that, it will go towards the current due for your bill-in-full account. For example, the pay-over-time balance is $1,000 and the minimum due is $50. Okay? When we receive a payment for $700, there’s gonna be $650 left. It will satisfy the pay-in-full. It will go back again to the balance of your pay-over-time feature. It will deduct whatever the balance is. If you have past due, it will satisfy that.”

Moving on……

Capital One: Frank from Capital One kept it simple and sweet:  “Your payment goes toward the highest-interest balance on your account first,” he said.

Discover: And the friendly agent from Discover concurred: “Payments are applied like this,” she said. “The minimum account due goes toward the minimum balance due – and anything you pay over that goes towards the highest APR balance.”

Question #5: What do I do if I see a fraudulent charge on my account?

The Truth: The responses to the last and final question I asked aren’t anything to write home about. When asked what to do when you see a fraudulent charge on your account, all five agents agreed that you should call your card issuer to report it right away.

Chase, Citibank, American Express, Capital One, and Discover all offer zero fraud liability for purchases made with your card without your consent, and each agent was adamant about taking advantage.

So, at the end of the day, at least we can rest assured that we are protected if our cards are ever lost are stolen. In light of some of the other wacky responses to our questions, I appreciated the fact that each card issuer offered the same response to this question at the very least.

The Bottom Line

Credit card customer service can be hit or miss, and agents don’t always have all the answers. With that in mind, it’s more important than ever for you to educate yourself on how credit works – and how you can avoid common credit pitfalls such as paying too much interest, bungling a balance transfer, or misunderstanding your card’s terms and conditions.

If you want to learn more about how credit works without relying on a customer service agent who may or may not have all the answers, these resources can help:

Which card issuer offers the best customer service in your experience? Have you ever received any especially bad (or especially good) customer service from a credit card company?