What causes the "app itch"?

[Anonymous]

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@bichonmom wrote:

For 10 years, I couldn't get credit to save my life! After waiting 10 yrs for a BK to fall off, and another 2 to rebuild credit, it's such a nice feeling to know I can be approved for credit again. It's like I'm in a club that I couldn't join before.

I think Frugal is right. In so many ways, credit is something we have no control over. We can't control our FICO. And one mistake -- like heaven forbid be 1 day late on a payment -- stays with you for 7 years. IMO, that's very punitive. Apping is one area where we do have some control. We can choose to app or not. So, it could be exerting control in a situation where we have very little.

I get so excited about getting credit that I have to remind myself it's not really a big deal. I mean, it's not free money. If I charge something, I have to pay for it, and if I don't PIF, then I pay through the nose in interest (which I'm unwilling to do). Credit is really a means to an end -- you *need* credit to get things you want -- like a car and house. The cards themselves really shouldn't give me such a buzz, but they do.

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+1 to both you and Frugal. Very insightful comments. I can well relate.

[Anonymous]

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@LS2982 wrote:

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@Cdnewmanpac wrote:

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@LS2982 wrote:

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@Cdnewmanpac wrote:

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@TeeandDee wrote:

This "Credit Card" forum! LOL!!!  All the great news about "Just got approved for this card" or got this offer in the mail!" or that card!!!! 

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Don't laugh. This is part of the answer: Onnela JP, Reed-Tsochas F, Spontaneous emergence of social influence in online systems, Proc Natl Acad Sci USA, 2010 Oct 26; 107(43): 18375-80

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To summarize: participation in online forums influences our behavior, that behavior tends to become more extreme over time, this happens unintentionally. In other words, the "app itch" is caused, to some degree, by participation in this forum.

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Gotcha!! I agree. But if you really want that prize you have to control it!

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Agreed on both points. I get the app itch, too. What I do about it, though, is up to me.

[Anonymous]

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@Anonymous wrote:

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@Cdnewmanpac wrote:

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@LS2982 wrote:

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@Cdnewmanpac wrote:

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@TeeandDee wrote:

This "Credit Card" forum! LOL!!!  All the great news about "Just got approved for this card" or got this offer in the mail!" or that card!!!! 

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Don't laugh. This is part of the answer: Onnela JP, Reed-Tsochas F, Spontaneous emergence of social influence in online systems, Proc Natl Acad Sci USA, 2010 Oct 26; 107(43): 18375-80

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To summarize: participation in online forums influences our behavior, that behavior tends to become more extreme over time, this happens unintentionally. In other words, the "app itch" is caused, to some degree, by participation in this forum.

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I definitely agree with it.

It's a double-edged sword. Had it not been for these forums, I probably wouldn't have an AMEX BCE, but if it weren't for my sense of self-control and willpower, I'd probably have 13 more cards. The "Keeping up with the joneses" makes it way into some of the threads sometimes. You see the other guy app and get the 60K bonus miles and see his info is relatively similar to yours, so why not... and then you post about how you might app... and then someone else chimes in "DO IT!", so at that point, you got the validation you needed... except, the other people aren't getting hit with INQ's but you are.

I wonder if people DID get hard pulls for suggesting credit card apps, if we'd see a much deader Credit Card forum.

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I think we'd be able to hear the crickets chirping.

[Anonymous]

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@JenniferinFL wrote:

The sudden realiziation that there's some you might qualify for.. lol

Hadn't applied for new credit in 5 years. Realized I could, first one got approved and it was such a high I tried another, got that, and another, got that and now have gotten denied for 3 and one more pending. So, I'm done app'ing now.

After the first three, I app'ed ones that I noticed others with similar scores getting.

Hopefully that has my app itch fixed..

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That's a key point to keep in mind. I remember that in my psychology class back in my college days, we read about a study that was done with rats and rewards. The rats pulled a lever. In one group, the lever never resulted in a reward; the rats very quickly learned to ignore the lever. In another group, the rats always received a reward; the rats pulled the lever frequently at first, but soon became bored and only pulled it on occasion. In yet another group, the rats received intermittent rewards; in this group, the rats went nuts with the lever, and behaved as if they were addicted to it. In short, not knowing whether or not a reward was coming -- but it might! -- was a very powerful motivator.

I think that this translates to a number of  behaviors in certain individuals -- including an addiction to slot machines, and yes, for some even credit card applications. I think that some people apply for cards that they don't need because of the rush that comes from not knowing whether or not they'll get it -- but, they might!

[Anonymous]

}I cant help myself.... lol. I need a shrink to help me stop !

[Anonymous]

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@drkaje wrote:

@ JaysonT,

I'm really curious why you don't feel liquidity has any bearing.

The people I was referring to wouldn't be affected (in any way) by job loss. Perhaps I should have writen it that way, instead.

This topic borders on taboo and doesn't get the discussion it merits.

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drkaje:

I guess the reason for thinking, in this discussion, liquidity has no bearing is because so long as you are "liquid" enough to cover your spend on cards the number of cards plays no real role.  I for one am in a case where I work because of a both need and desire to better my retirement which is still a ways off (currently 38 years old).  My spouse is not in the same situation as a virtually retired dentist with no need to work and only does it (three short days per week) to keep busy.  We both carry a large number of cards for the same reasons and each have a different level of liquidity.  I learned the card points game from my spouse who taught me all the ins and outs and benefits.  We keep our finances separate but have learned from each other over the years to further maximize the benefits.  We also alert each other to the latest awesome card offer.

[drkaje]

Thanks, Jason!

[CreditScholar]

There's something to be said about quality vs. quantity. Some cards are simply better than others, and a handful of great cards can easily have more benefits than a huge pile of mediocre ones. Once people are in that spot and have REALLY good cards, they tend to stop applying so much. Truly good cards like Amex SPG, BCP, Chase Sapphire Preferred, and the like only come out once every few years. Having lots of cards might be ok if they're using those as a stepping stone to better things. However once someone has the best in the categories they need, theres rarely a reason to apply frequently.

[Open123]

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@Anonymous wrote:

Personally, I don't see any deeper issue beyond liking free stuff.  I never spend money I would not spend anyway and I get something back from my spending.  To me, if your credit allows it, why not take advantage of the offers cards put out there.  People often mention the juggling but honestly, I keep all cards on a page of links and I go to the individual sites and make online payments.  I can with no lies go onto all the sites in a matter of under 10 minutes and pay the bills.  Ten minutes out of a week or every two week does not seem like a lot to "pay" for the amount of free stuff I have received and still receive.

Liquid or very liquid means nothing to this discussion.  I do not carry a balance ever and that is based on the simple premise that I charge nothing I cannot pay for before the statement is generated.  I went from a life of using just a debit card and getting nothing for my efforts to credit cards and spending the exact same amount of money each month and getting a little something in return.

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Exactly, what is the downside from receiving perks for money one is going to spend anyway?  It makes no sense to spend extra for the perks, but it certainly makes a whole lot of sense to receive a rebate on some of our fixed spending.

Also, some of these freebies are because of the current 0% interest rates.  These Banks receive no return on their cash reserves and is thereby better served to allocate these funds towards client acquisition as opposed to paying higher taxes.  The moment interest rates increase, kiss all of these offers goodbye.  Why not be strategic and benefit from this windfall on money you're already going to spend?

Isn't an inquiry worth a business class flight?  Free hotel rooms?  $500 dollars?  Unless one is apping for a mortgage or other huge financing, towards what end would we have a high Fico score?  Watching it skyrocket to 800 and apply only when all the perks are gone?  Wow, I got approved for that 6 month 0% interest with $50 bonus isn't anything to get excited about.  Once those perks are gone, I can garden for a decade.

Obviously, this strategy is only pertinent to those who will spend the money regardless and will do so in cash, if not with a credit card.

[haulingthescoreup]

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@Open123 wrote:

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@Anonymous wrote:

Personally, I don't see any deeper issue beyond liking free stuff.  I never spend money I would not spend anyway and I get something back from my spending.  To me, if your credit allows it, why not take advantage of the offers cards put out there.  People often mention the juggling but honestly, I keep all cards on a page of links and I go to the individual sites and make online payments.  I can with no lies go onto all the sites in a matter of under 10 minutes and pay the bills.  Ten minutes out of a week or every two week does not seem like a lot to "pay" for the amount of free stuff I have received and still receive.

Liquid or very liquid means nothing to this discussion.  I do not carry a balance ever and that is based on the simple premise that I charge nothing I cannot pay for before the statement is generated.  I went from a life of using just a debit card and getting nothing for my efforts to credit cards and spending the exact same amount of money each month and getting a little something in return.

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Exactly, what is the downside from receiving perks for money one is going to spend anyway?  It makes no sense to spend extra for the perks, but it certainly makes a whole lot of sense to receive a rebate on some of our fixed spending.

Also, some of these freebies are because of the current 0% interest rates.  These Banks receive no return on their cash reserves and is thereby better served to allocate these funds towards client acquisition as opposed to paying higher taxes.  The moment interest rates increase, kiss all of these offers goodbye.  Why not be strategic and benefit from this windfall on money you're already going to spend?

Isn't an inquiry worth a business class flight?  Free hotel rooms?  $500 dollars?  Unless one is apping for a mortgage or other huge financing, towards what end would we have a high Fico score?  Watching it skyrocket to 800 and apply only when all the perks are gone?  Wow, I got approved for that 6 month 0% interest with $50 bonus isn't anything to get excited about.  Once those perks are gone, I can garden for a decade.

Obviously, this strategy is only pertinent to those who will spend the money regardless and will do so in cash, if not with a credit card.

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The difference is between those who understand the implications of frequent apps and accept them, because they see some perceived benefit in the card, and they suck up the negative impacts on their credit profile, vs those who mindlessly app for anything at all, knowing that it damages their credit profiles AND knowing that there's a good chance that they'll be declined AND knowing that if they're approved, there's a good chance that it will be a crap CL and APR.

There's calculated risk, and then there's blind, mindless apping.