I was just wondering how CCC benefit from giving their customers more than one CC, especially when there are no annual fees for them to collect on. For example, I have an Amex Blue cash, they are offering me a Starwoods reward card, but will not just increase my CL on my current card. If anyone knows the answer to this please let me know. TIA
My assumption is that if someone has more than one rewards card, one is a lot more likely to use them. So maybe the two AmEx's get used on stuff that would otherwise be cash, or a different CC, or not at all.
Always the trick with rewards cards --you have to ask yourself if you'd be buying whatever-it-is if it weren't for the fact that you need 30 more points to get the next gadget you have your eye on.
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit? FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
statistical data suggests that a customer is significantly more likely to accrue fees on multiple low limit cards, than a single higher limit card. cap1, for example, appears to be a leader in this cc issuing practice. they deny that it is used to extract more money from their customers, some who have as many as 3 or 4+ low limit cards issued to them. most would agree that the more cards one has, the more difficult it can become to manage them efficiently.
Message Edited by score_building on 09-24-200802:49 PM
FICOS: 06/13 EX 765 (PSECU) EQ 771 (DCU) TU 779 (WALMART)
I agree with that scenario. If you have say, four prime cards (AMEX, Discover, Chase, Citi) with decent limits it is a lot easier to keep track of them every month than of you have 10 or more sub-prime cards with bad limits.
I had a friend in college and she had 22 credit cards. Not a joke, she literally had one from every issuer and every department store known to man. Of course back in the 80's it was SUPER easy to get a CC. She filed bankruptcy while in college. I remember giving her a ride to the lawyer, because her BMW had been repo'd. That actually kept me away from all the CC offers on campus. Free t-shirts and water bottles were not an incentive to sign up. I knew at 19 I would not have the willpower to stop spending and would probably not pay.
Also, I used to work for MBNA, and they called it the wallet factor. They figure a person will have only so many credit cards. So if you look in your wallet and you have 5 credit cards, and 2 of them are MBNA, they have a better shot at you using one of their cards. It was a little misguided because working collections there, if those people had one card in collections, you better believe they had all their MBNA cards in collections.
Thanks for the responses guys, it is very eye opening. I like the wallet factor idea from MBNA/BOA. I guess they didn't factor in SAAVY myfico users. We now know how to play the game too. Someone on here used great line for low credit limit cards. "if you pretend to issue me credit, I'll pretend to use your card"
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