So
the other day I was looking through my inbox and I got an email from my bank,
JP Morgan Chase. It more or less said, “Hey,
you have our credit card, why not activate the 5% cash back feature on this
month’s special categories?” I deleted
it.
A day
or so later when I was on my Chase account online, I noticed a similar
invitation on the dashboard screen.
Since I had 2 minutes to spare, I figured I would go ahead and activate
it. One click later, I was on this
screen:
It
seems simple enough. You give them some
basic information (last name, last 4 digits of card number, zip code and optional email address) and they give
you 5% cash back on anything you spend with your credit card that’s related to
dining, department stores, movie theatres, and charitable organizations. However, there was a little tab that read, “Why
is this necessary?” that I decided to click.
The dialogue box that popped up is in the above screenshot.
“We
need to know who you are in order to make sure you receive your bonus.”
Are
you kidding me? You’re telling me that
Chase is unaware who I am and that if I don’t provide them this information
poor me won’t receive my bonus? Somehow
I doubt it.
For
example: I got the email with this
offer, so they clearly have my email.
Obviously they know my last name (and first name and middle initial),
which is tied to my account, and they definitely
know my entire card number, let alone the last four digits. As for zip code, maybe I can understand that,
but that information is tied to my account too.
So why do they really need to know this information?
Back
in my younger days, I might have assumed it was because the computer system
that took care of the bonuses wasn’t tied to the system that handled my
information and that they needed to cross-reference it. But I am skeptical to that explanation. Every time I swipe my card, information is
sent to Chase (and information is sent back to the vendor), which is then used
to prepare my monthly bill and so on and so forth. So now I wonder if the intention isn’t
slightly more sinister.
Unfortunately,
I know nothing about banks. I could ask
my friends more well-versed in the financial system, or I could go on a
two-week research mission to find the answer.
Or I could write a whiny blog about it.
The
thing is, I’m not ripping on Chase in particular; I’m sure all banks and credit
card companies are this way. I figure
somehow there’s money in it for them.
And to be fair, they’re giving me free money. In fact, they’re giving me a lot of free
money. Whether I activate this “bonus”
or not, I still get 1% cash back on everything I spend with my card. And when my school lets me pay tuition by
credit card, well, it turns out to be a good investment.
Consider
this: I have never actually had to
finance anything on my credit card, that is, I spend only what I can afford and
I pay it back in full at the end of every month. So right there, they’re not making any money
off me and are actually lending me instantaneous money every time I purchase
anything for free. That’s a pretty good
service when you think about it. The
card is harder to steal than cash (albeit not much) and even if it is stolen I’m
only responsible for a fraction of the possible damages.
Now
consider this: I get 1% cash back on
everything at least. When you hit a
certain amount, they mail you a check (or rather deposit it directly nowadays). Since I got this card in 2007, I’ve probably
made $1,500 off of it (no kidding!). For
free! That’s a pretty good deal.
It’s
kind of like having a Krogers card—You basically tell Krogers what you’re
buying, and they give you a very modest discount, as well as fuel rewards. It doesn’t cost you anything, and you don’t
even physically have to have your card with you as long as you know your ID
number. The disadvantage is that Big
Brother knows exactly what you’re purchasing.
To be
honest, I’m okay with that. I don’t care
that Big Brother knows I bought milk, bread, toilet paper, and a Sara Lee
cheesecake (it’s no secret I like my nom-noms).
Same for Chase; if they’re using this information to track my purchases,
so be it. A lot of people are
uncomfortable with this level of information on them out there, and that’s fine
if they want to opt out. I can see where
there are “slippery slope” concerns about how the information will be used, and
I’m not oblivious to that. I don’t put
down my social security number on every blank on every form unless I know they need it and don’t just want it, for
example.
The
truth is, we live in an era where information is valuable. Maybe even worth $1,500 to Chase over 5 years
(although I think the real incentive to the bonuses is hoping people will spend
more money if they’re getting a bonus, which they can finance at an 11.5% APR). Definitely worth $1.37 of a $20.97 grocery
trip at Kroger. So they can sell us more
products we want and fewer that we don’t.
Then
again, maybe I am being too careless and Big Brother is watching me right
now. I bet he’s bored.
