Reply
Valued Contributor
Posts: 2,698
Registered: ‎08-13-2009
0

Re: Why Do Banks(BOA) send Checks Monthly?

You can call Discover card and tell them NOT to send any convenience checks or mail offers.  They will stop.  :smileyhappy:
Moderator Emerita
Posts: 3,091
Registered: ‎08-09-2008
0

Re: Why Do Banks(BOA) send Checks Monthly?


CHARGE_IT wrote:

I know our government has raised the bar by no longer seeing fit to spend in the "billions" and moving on to the great fun of spending "trillions". (and they criticized the big banks)

 

However, in fairness I have to point out a huge exaggeration; no bank is spending "billions" yearly in ad/marketing/customer research.

 

I think this is the result of our situation. We are beginning to think in inflated terms and we should resist that. Lets please not become accustomed to our government throwing around "trillions". It is not right or necessary. Keep focused.

 

CI

 


In fairness, I didn't say that any bank is spending that much. What I said was that "Billions of dollars are spent, yearly, on market research & marketing/advertising." It's not an exaggeration, and is probably a bit of an understatement. "We" aren't thinking in inflated terms. Perhaps you just misunderstood.

-------------------------------------------


Friendly, Supportive & Respectful


Understanding Your FICO Score  |  Credit Scoring 101  |  Common Abbreviations  |  FTC: FCRA Links  |  FTC: FDCPA Links  |  Opt-Out  |  State Resources


"However gradual may be the growth of confidence, that of credit requires still more time to arrive at maturity” ~ Benjamin Disraeli

Regular Contributor
Posts: 193
Registered: ‎07-13-2008
0

Re: Why Do Banks(BOA) send Checks Monthly?

You are correct in one sense; I see that you might be referring to all nationwide marketing and research and not just bank customer research. However the other posts seem to be stressing the costs of reaching out to customers and all that stands behind that effort. ( I could be wrong about that too, but it is how I have interpreted it)

I stand behind what I said . It is highly inflated and I would think that you would realize that the rest of us can post things that are vague in accuracy. In your position however, you should try to be as correct as possible and even give us links to back up your info because inexperienced members tend to believe that you are speaking from authority and indeed your response to me increases that sense of authority. I don't have that luxury, but I am more than willing read over things that I find questionable and if I care enough I will seek out the facts on this machine.

I hope the fact we disagree doesn't mean that it is wrong that we have both expressed ourselves.

 

CI

 


LilMirth wrote:

CHARGE_IT wrote:

I know our government has raised the bar by no longer seeing fit to spend in the "billions" and moving on to the great fun of spending "trillions". (and they criticized the big banks)

 

However, in fairness I have to point out a huge exaggeration; no bank is spending "billions" yearly in ad/marketing/customer research.

 

I think this is the result of our situation. We are beginning to think in inflated terms and we should resist that. Lets please not become accustomed to our government throwing around "trillions". It is not right or necessary. Keep focused.

 

CI

 


In fairness, I didn't say that any bank is spending that much. What I said was that "Billions of dollars are spent, yearly, on market research & marketing/advertising." It's not an exaggeration, and is probably a bit of an understatement. "We" aren't thinking in inflated terms. Perhaps you just misunderstood.


 

Frequent Contributor
Posts: 286
Registered: ‎05-02-2007
0

Re: Why Do Banks(BOA) send Checks Monthly?

Those checks have another purpose as well.  The major issue between creditors and those receiving credit is asymmetric information--you know more about your payment habit / ability than the creditor.  The creditor must therefore rely on other information--like credit reports, etc.--to provide transparency. 

 

Use of those checks provides more information.  Sure, they can be used for things like balance transfers, but the convenience checks can also be cashed.  Some people think that banks are crazy for providing convenience checks--not to mention cash advance allowances on credit cards--but it helps resolve the information asymmetry issue.  Why?  As mentioned by others, the creditor makes money on the interest spread (the spread between what it charges in interest and its own bowrrowing costs).  Because it typically (generally, in most cases) costs the consumer MORE to use the checks than to use his own cash, use of the convenience checks signals that the consumer has cash trouble. 

 

Ostensibly, a consumer will do a balance transfer from a card with less favorable terms to one with better terms.  However, this is information to the bank--transferring a balance is nevertheless a sign of instability.  Similarly, a cash advance is a sign that the consumer is running low on cash--again a sign of instability.  The use of these implements therefore gives the creditor the ability to further assess your risk profile.

Get a myFICO recommended credit card

Copyright ©2001-2013 Fair Isaac Corporation.
All rights reserved.

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions based on Experian or Equifax data (additional FICO® Score versions based on TransUnion data are not currently available on myFICO.com). Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.