Saturday, February 27, 2010

Canceled

I got a USAir(ways) Dividend Miles Credit card from Barclay's a year ago, because they gave me a bunch of frequent flier miles and--when I insisted--no annual fee. I had no intention of using it, and never did. I was just in it for the one-time grant of mmiles.

I was slightly bemused to get a letter from them telling me they had canceled it for non-use. Without even a prior warning. I don't really have a problem with that. As I noted, I had no intention of using it, and I was clearly an unprofitable customer. Still, I have had plenty of other credit cards in the same situation, and that has never happened before. If anything, I might have expected a solicitation, accompanied by a mild sweetener, to try to prompt me to use the card and hopefully fall into the habit of using it once prompted. (Note: I'm not complaining about how it was handled, merely making an observation on an unusual consumer event.)

I wonder if the same Artificial Intelligence that (kinda) works for fraud detection also works to identify people who got the card solely for a the miles, or solely for a 0% balance transfer.

3 comments:

  1. New credit card laws went into effect on Feb. 22nd. A natural result of the new laws will tighten credit and make it harder to get cards. Also, no annual fee cards may soon be a thing of the past. So a lot of people will end up getting their cards canceled.

    http://www.cbsnews.com/stories/2010/02/22/business/main6232286.shtml

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  2. Yep, it probably is a harbinger of the new law.

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  3. The dirty secret in the credit reporting system is that even though the bank closed the account for their own reasons, you take the temporary ding to your credit score.

    From http://www.bankrate.com/finance/credit-cards/closing-credit-card-dings-credit-score-2.aspx :

    "Is there a difference between the issuer canceling the card versus you closing it yourself?

    Good question. That would be a good No. 3 for the misconceptions. No, there is no difference at all. That's a good one.

    Even though on the credit report it will indicate "closed by consumer" or "closed by creditor," the score only cares whether it's closed or open, but not by whom, even though it will say so on the report.

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