Credit card companies, banks included, are getting nervous about their flagrant “generosity” in offering cards to children and other risky consumers.  Have you noticed?  You haven’t received any of those letters or unsolicited phone calls lately offering you a new card with cash advances as low as 0% for the first six months – longer if you quibble.  Instead they’ve put their in-house experts to work – or perhaps hired a high profile bunch of “math whizzes” or psychologists  -  to analyze who are the good clients who pay what’s due in part or in full on time and who are the bad ones, the losers who skip payments and ultimately just stop paying period.  That could be when they lose their job, their home, their health, and/or their sole means of support.  That would be, too, when they realize the exorbitant interest rates and other penalties the card companies add on every month to the original cost of their purchases will not get them out of debt quicker but will, in fact, bury them.

The experts who are analyzing everything they know about us – and it is mountains! – are the very same ones who, if they haven’t invented the term “risk averse” love it.  Now, I have to admit, I love it too.  I love the sound of it.  Risk averse, risk averse, risk averse.  Love it!

But I don’t think about what it means.  Probably because I understand it.  Yes, I am risk averse. By which I mean that I personally do not take foolish risks.  Of course, my foolish risk is someone elses sure thing, but hey, that’s what it’s all about.

Never mind definitions.  The interesting thing is what the analysis of what you charge on your credit card will reveal about your payment or non-payment chops.  If you want to get the full picture, read Charles Duhigg’s article in The New York Times Magazine, May 17, 2009, “What Does Your Credit-Card Company Know about You?”   If you want to know what these experts know about me (and maybe you too), and what I know about them, read on.

According to the research of one J. P. Martin, then of Canadian Tire, now of Walmart Canada where I never shop, “People who bought…..those little felt pads that stop chair legs from scratching the floor almost never missed payments.”

Uh-oh. Two things wrong here: one -  “almost never” doesn’t apply to me.  Never is the rule.  And two – I didn’t buy them to “stop chair legs from scratching the floor”, I bought them to stop crazy downstairs neighbor from pounding on the ceiling with his broom. (It didn’t work.)

Mr. Martin also discovered that among the “safest” products was premium birdseed.  By safest, Mr. Martin meant, of course, safest for the bottom line.  His bottom line, not mine.  Not two weeks ago on our way to our northern cottage which we rarely visit these days, my husband insisted on stopping at the hardware store in the town nearest  our wooded glen to buy birdseed.  This is in the month of May.  Now, it is my particular philosophy that in a wooded, nay forested area rich in protein during the spring and summer (black flies, mosquitoes, that sort of thing) you don’t provide birdseed for native birds.  You let them eat meat.

I have stated my philosophy, which may be entirely flawed, frequently, repeatedly – elucidating if necessary, that I am all for feeding whatever birds remain during the winter.  But the fact is, in recent years we have stopped going to the cottage in winter so the bird-feeder in front of our window remains largely empty.

Breaking George’s heart.  So O.K.  Buy some birdseed.  Which he did.  And for some weird reason, paid cash for it.  He actually came out of the store to the car where I was waiting with Lily (our dog) and asked if I had any cash.  I gave him some.  I didn’t ask any questions.  Actually, I never saw that bag of birdseed.  Perhaps my head was turned when he came out of the store and put it in the trunk.  I still haven’t seen it.  I don’t want. to.

As we proceeded on our way, George explained that the $12 bag was so small, it didn’t make any sense to buy it.  He bought the bigger size to get the bargain price.  Which was?  $21.39 including tax.

“By the time [J.P. Martin] publicized his findings, a small industry of math fanatics – many of them former credit-card executives – had started consulting for the major banks that issued cards, and they began using [his] findings and other research to build psychological profiles.  Why did birdseed….[and felt pads for chairs]..buyers pay off their debts?  The answer, research indicated….”

is so damned obvious I hope they paid huge consulting fees to learn what their own greedy brains couldn’t fathom!

It is more than a hope – it is a certainty.  According to Mr. Duhigg, “Data-driven psychologists are now in high demand…” by the industry,  and I will tell you more about how wrong they are next time.
©Elaine A. Zimbel 2009