Wednesday, October 24, 2012

Don't believe the credit card companies

I am a pretty honest person.  Consequently, I’m pretty bad at subtly manipulating people to get what I want.  Here’s a typical conversation where I try to convince my boyfriend to go out somewhere with me—

Me: I want to go to X event
Him: Ok … I don’t
Me: Fine, I’m going anyway

Subtlety is not my strong suit – I say what I think.  What I really dislike is when people are fake-considerate in an attempt to create the illusion of making you better off, or giving you choices.  If nothing changes when you ask ‘are you OK with that?’ and I answer ‘no’ rather than ‘yes’, then you’re not actually being considerate, you’re being a jerk and want to create the illusion of consideration. 

Choices are a funny thing – more isn’t always better.  It’s been shown that 401Ks with more options don’t lead to better (more diversified, lower cost) investing – people tend to just get overwhelmed and buy a bit of everything.  Hint: bad idea.  Framing of choices is critical as well– what sounds better, a medicine with a 95% success rate, or a medicine that doesn’t work 5% of the time? 

I was really excited to get an email from one of my credit card companies saying that I was eligible for an upgrade.  Woohoo!  Except, not.  Looking at the finer print, my new card would have a yearly $70 fee – whether or not I’d be better off with that card would be a function of how much I spend on it.  I am personally against cards with any kind of yearly fee.  Ideally I would be spending less money rather than more, and I’d hate to be penalized for doing so by not making up the fee with bonus points and other perks.  But nice try, evil credit card company.

More joyous news (this time from Discover) – “We are please to tell you that we have lowered the following APRs on your account to Prime + 9.74% from 12.99%.”  The prime rate is a widely used benchmark for setting HELOCs (home equity lines of credit) and credit card rates – what matters is that it’s variable and changes over time.  So the full picture is that yes, given that the prime rate is 3.25% … I now have the exact same rate that I had before.  But it could go up or down depending on what happens to the federal prime rate – on the bright side, the prime rate hasn’t changed since December 2008, and I don’t pay interest on my credit card anyways.  Still, amazing how Discover managed to spin things. 

A positive attitude can certainly make your day better, as you’re more inclined to appreciate your surroundings.  For that reason, I’m not surprised that credit card companies attempt to position any changes they make in a favorable light – that alone can change how you perceive their actions.  That strategy can, however, backfire when your consumers are as smart as me and don't like to be manipulated ... oh wait, that's most people.

Moral of the story: your credit card company is probably never going to do anything awesome for you.  Also, don't manipulate me (unless you're so good I don't even notice it, in which case go ahead).


  1. You can opt out of all credit card offers via:

    1. Cool, thanks for the link! My desire to not get spammed is at odds with my desire to get mail ... hmm.