Friday, July 24, 2015

An Idea For A Credit Card Company

Arguably, the most attractive asset a credit card company has are customers with high credit ratings. Well, the also, apparently, need to be using the card regularly, which is a bit counterintuitive- those that can achieve and maintain a high credit ratings tend to be precisely the sort of people who get fed up with debt, pay everything off, and close the account.

I have seen this in my own life. I don't like to be in debt, and I tend to value paying off debt more than I value certain creature comforts. Meanwhile, I have found other people's behavior in this realm inexplicable. It is relatively easy to find people who will just pay the minimum, happy to let it ride, with nary any sense of psychological harm.

But anyway, one of the things to do for a credit card company would be to find out what screws people up- I am not talking about people in general, but folks who used to have decent credit. So you try and market to good credit risks- I don't know if it can be done, but it might be especially good to market to people who have reduced their credit and/or mortgage- people who are evidently following an anti-credit lifestyle- and market a particular credit card as the anti-credit credit card. You laugh, but there are transactions- like renting a car- for which you practically need a credit card, and more of these transactions are likely to come into existence over time. Additionally, there's a war on cash, with governments and big businesses trying to end it so they can gain more control over people- so they are going to create more inconvenience too.

Once you get people with good credit ratings, and you've analyzed what is likely to make them drop off the good credit radar, you can look at which of these risks are the sort you can insure against. An example that bounces around in my mind is that most of us don't know what we would do if we were arrested. Who would we call? I don't know how likely it is for someone with decent credit risk to get arrested. Obviously, this is not an item you market to people in order to get them to sign up- because few are going to perceive themselves as under threat for arrest- but instead you'd have some sort of 'peace of mind' number or app, that you would encourage existing customers to call.

Another issue I have heard that comes up is healthcare related bills. Again, such things need to be analyzed, but I could also see a credit card company having special negotiators for their clients. Hospitals overcharge routinely, and insurance companies will suddenly decide someone who appears to be in-network is out. It is in the best interests for a credit card company for it's clients to get the right care and for that client to get a good price.

A third issue that can often be related to both of the above is job loss.

So, my point is that a credit card company might do pretty well finding good credit risks and then keeping them good credit risks- not necessarily by issuing them more credit, but by handling the sort of things those of us in the lower classes can't handle as well as upper class citizens can. Most of us don't have a lawyer on retainer, nor do we know how to navigate the corporate maze that much of the American system has become. Paying bills on time is comparatively easy.

One of the greatly missed things in this world is loyalty. It is hard to estimate how necessary it is, but it seems very telling to me that men tend to be more successful when they have good relationships. A company can't replace that, but in this extremely artificial world of debt-as-money, there are no doubt other ways credit card companies and their customers could collaborate- ways that are probably more apparent to a sociopath than to me. In a world where there is such a thing as 'too big to fail' your best bet is having as many 'friends' who are that big. Nor does it have to be Goldman Sachs big either- there are little bail outs and deal making going on all the time. One of the reasons Trump is rich is because he knows how to play this game.

But again, starting with what is beneficial to both the company and the customer, and then figuring things out from there. There's the obvious pitfalls people can inadvertently fall into, but there are also potential deals the more corporate types would be more familiar with than I am, if they are willing to think about them.

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