What does your credit card company know about you?

[KittyWampus]

They know more about you then you know about yourself.


Buy premium bird seed? Your credit card company knows you'll pay your bill
Buy chrome accessories for your car? Your credit card company knows you have a greater chance of paying late.

Credit card companies also know when you log on and check your balance.

Checking your balance at 1:00 in the afternoon? You should be at work.
Checking your balance at 1:00 in the morning? You might be worrying how you're going to pay your bills

Suddenly using your credit card to pay grocery bills? Not good....

On today's Planet Money:

Credit card companies have decided to become your friend, before it's too late. If they chat you up instead of sounding threatening when you call, they figure, you might pay them back first. That's the message from New York Times reporter Charles Duhigg, who just published What Does Your Credit Card Company Know About You?

While they're getting friendly with you, credit card companies have managed to learn a thing or two about exactly your ways. For starters, they're never happier than when customers buy premium bird seed, or put their kids' pictures on their credit cards. But if they hang out at Sharx, an upscale pool hall in Montreal? That's bad news.


Listen to NPR segment here:
http://www.npr.org/blogs/money/

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What Does Your Credit-Card Company Know About You?

A 2002 study of how customers of Canadian Tire were using the company's credit cards found that 2,220 of 100,000 cardholders who used their credit cards in drinking places missed four payments within the next 12 months. By contrast, only 530 of the cardholders who used their credit cards at the dentist missed four payments within the next 12 months.

snip


So credit-card firms are changing their business plans. Gone are the days of handing out cards willy-nilly and hoping that the cardholders who dutifully pay up will offset the losses from those who default. Today companies are focusing on those customers most likely to honor their debts. And they are looking for ways to convince existing cardholders that if they only have enough money to pay one bill, it’s wiser to pay off their credit card than, say, the phone.

Put another way, credit-card companies are becoming much more interested in understanding their customers’ lives and psyches, because, the theory goes, knowing what makes cardholders tick will help firms determine who is a good bet and who should be shown the door as quickly as possible.

http://www.nytimes.com/2009/05/17/magazine/17credit-t.html

[xchrom]

1. 'privacy' is a thing of the past -

the question now becomes regulating people who make decisions based on personal information.

[Buzz Clik]

2. Gee. And I always thought my credit card companies simply wanted me to pay or die.

They cleverly rotate "Pay by ___" dates for your bill so that they are difficult to pay on time if you get paid on the first of the month. And, if they manage to trick you into missing that, they'll launch your interst rate into outer rings of Saturn.

I have two credit cards. I use none. Debit only, thank you very much.

[SheilaT]

3. There are some out there who advocate paying

everything by cash, every time you make a purchase, if for no other reason than to fully understand the cost of everything. That would also limit what a credit card company can learn about you.

[mwooldri]

4. They've had this information for YEARS.

Some are just getting smarter (or dumber) at using it. I work for one (I don't speak for them, won't disclose who here). The amount of information they can find out for you can be frightening. For certain transactions we go above and beyond the usual identifying process and ask some really offbeat questions. I've had to deny giving service because my customers could not or would not answer the questions demanded of them (that I was required to ask). At least with a competitors card that I have I can choose my own off-the-wall questions... with my employers you're stuck with what they get on you.

[DJ13]

5. REAL CC reform would include preventing them from monitoring purchases

So Congress....?

<crickets>

[rasputin1952]

6. Once you put that plastic to work...

just about everything about you and your habits become part of a database.

Worse than that, it is a one-way street...do you know anything about those who know all about you?

On another front, I had the dogs outside a couple of weeks ago, unleashed, and a cop gave me a ticket...OK, I was wrong, I can accept that. But when he did a "background" check on me while we were talking, I got upset. I asked if I could do a background check on him, just to make sure he was on the up and up as a cop...he got upset. When nothing came back on me, I asked if anything would come back on him...:D Bottom line, he didn't know what to do, and left somewhat ticked, but knowing there was nothing else he could do.

[TooRaLoo]

7. I suppose I can understand the need for credit, but I hate the way

my credit card companies have treated me (or the way they have decided to just NOT treat me). I have a card that I've never once been late on in more than 4 years, but they jacked up my rate sky-high because of something else; it's been so long I can't remember what it was. I am kind of on the cash-only side, except for my tuition and car. Who knows if anyone will ever decide that I deserve a home loan. I am working toward not needing a mortgage and buying a 'fixer'. I love the idea of remodeling and customizing my own home, so I don't mind the 'fixer' part at all.

I hate debt in general, but card companies suck in my opinion. There was a thread not too long ago here about how American Express likes to rate people up if they're lowly enough to shop at Wal-Mart. I hate Wal-Mart, but there isn't much choice for shopping where some people live - my mother's area is one example.

[high density]

8. Too much paranoia

I don't think they give two shits about when you log on to view your account as long as you're paying on time.

Canadian Tire can do this detailed analysis because they're both a merchant and a card issuer. Maybe that's a good reason not to use store credit cards.

From the Times piece:

One Bank of America executive acknowledged that Tiff — and the caller on the recording in the training course — probably could have cut her debt in half just by asking. Much of what they’re paying, after all, is fees and interest that Bank of America itself tacked on.

“Some cardholders are not as savvy as others,” said Tony Allen, a (Bank of America) spokesman, who added that the company tries to educate cardholders about their options. “I’m sure some people feel like we have conflicted interests and that we’ll only educate as much as it helps us get paid. But we take our responsibility seriously.”