Big Brother is Watching You Pee

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.