Irate Consumers Cancelling Credit Cards

Consumers are becoming increasingly upset with their credit card companies, with about one in six recently closing out at least one card in response to actions taken by their credit card issuers.

A new survey by Consumer Reports found that one-third of all U.S. credit card holders had paid off their balance and cancelled at least one card during the previous 18 months. Half of those said they did so in response to higher interest rates, new fees, reduced credit limits or other changes imposed on their account.

One cardholder in five complained that they had been treated unfairly by their credit card company, while only two-fifths said they were highly satisfied with their credit card companies, one of the lowest ratings of all service industries monitored by the nonprofit consumer information organization.

In addition to the survey results, Consumer Report says it has received scores of angry letters and emails from readers complaining about their credit card companies.

The survey found that one-third of respondents said they don't have any credit cards, a surprisingly high number for an economy widely regarded to operate on credit. Of the others, about 45 percent said they are charging less than they did one year ago, a similar number is charging about the same and only 11 percent said they are charging more.

Just over half of credit card holders said they pay off their balances in full each month. One-third report carrying a total balance on their cards of $10,000 or less, with a median debt of $2,500, while 13 percent said they carry a monthly balance of $10,000 or more, with a median debt of $17,000.

Much of the monthly debt in excess of $10,000 was reported to be the result of emergency expenditures. Of consumers carrying a balance over $10,000, 44 percent said they would not be able to survive financially over the next six months without using credit cards to meet expenses.

The telephone survey of 1,200 adults was conducted in July, and reportedly has a sampling error of plus or minus 2.8 percent, at a 95 percent confidence level.