Yesterday, ManvsDebt had a great post on credit card rewards and the things that people go through to “earn” them. If you missed it, you can read it here.
So, some of the arguments state that if you are buying things that you will have to buy anyway such as gas (which you shouldnt even need to buy, but I’m not going there) or food, then why not put it on your credit card, and get 2% cash back, or points or something else that they are willing to “give” you in return for a fairly detailed profile of who you are, where you go, what you like to do, etc. To some, using a credit card may not seem like an invasion of privacy, but it is.
Once they have all of the aforementioned information, they have a pretty damn detailed profiled of the things you like and the type of person you are. For instance, my charges are as follows. Restaurants in Cheyenne, Wyoming, Gas in Cheyenne, Wyoming, Gas in Laramie, Wyoming, Occasional Restaurants in Laramie, Wyoming, Clothing Stores in Cheyenne, Wyoming, Safeway in Cheyenne, Wyoming. From my spending history, they could discern that I like to have the occasional beer (I do, and they can tell because I prefer a local brewpub). They can tell I spend a significant amount of time in Laramie, because I get gas and occasionally a meal there ( I do, It’s where I work) and where I shop for groceries. Once they have this information on a long term basis, they can get a pretty in-depth profile of you, which is quite useful to advertisers.
Now, they’ve got you in the sights
Once you are in the sights, they are going to try and figure out ways to exploit you. Its what they need to do to make money, and that’s basically what they are all about. They can target you for new programs of theirs or they can sell some (or all) of your information to third parties who will then begin to send you targeted ads for other things. Most of the time, you (or me) just shake your head, get angry at the waste of paper, fuel for postal trucks and useless junk, but the companies dont mind. They are waiting until a disaster strikes and you need the money. Something happens to a vehicle, your health or otherwize and you cant quite cover the cost. Once you’re in, you’re in for good. Are they really looking out for your best interests, or are they just setting you up with a ladder when you slip into a hole?
Are they just laying in wait for you to slip up, then pouncing on you, trapping you in a nasty debt cycle for a long time?
I left a comment on Manvsdebt’s article on credit card rewards that I think is perfectly useable for the conclusion of this article:
Bottom line is this: If the credit card industry was a person, and it acted like it does currently, would you be friends with it, hang out on your off time, or let it borrow money?
Happy tuesday everyone!
