The creditor is IN your head. Literally.

[DeadManCrawling]

2-3 years back I posted about this and was roundly ridiculed by people, in spite of pointing to what was (at the time) a huge plume of smoke that led directly to the credit companies.

http://www.nytimes.com/2009/05/17/magazine/17credit-t.html?pagewanted=1

These creeps are tracking everything from what toilet paper you use to what time you are online and more.

All for the purpose of predicting defaults and using information to squeeze payments out of you.

And I believe this is just the beginning.

[diebroccoli]

Sheep are happy animals when they are well fed and given enough attention

[Billssuck]

This is so on the mark. And now that I'm going through BK, I honestly believe that the credit score stigma in America was created by credit card companies to keep us paying to them no matter how they affect us financially by raising interest rates, changes available balance, and flat out running schemes to make us pay late and over the limit fees. They want us to "want" a high credit score so that we can continue to borrow to pay for things we can't afford. I'm soooooo over it.

[StartingOver08]

This is so on the mark. And now that I'm going through BK, I honestly believe that the credit score stigma in America was created by credit card companies to keep us paying to them no matter how they affect us financially by raising interest rates, changes available balance, and flat out running schemes to make us pay late and over the limit fees. They want us to "want" a high credit score so that we can continue to borrow to pay for things we can't afford. I'm soooooo over it.

This is exactly right. The banks/lenders created a marketing angle and have pushed it to the extreme. Look at all the monitoring companies to keep up with a 'score' that changes from month to month and even has different algorithms (eg: bank cc score, mortgage score, auto score) so you don't even know which score you are actually receiving with your monthly subscription.

Now, back to DMC original post - how do we get them out of our head???
I'm sure its the same concept with debt cards. After all, where does the data mining stop?

[kornellred]

I realize that this is the General Talk forum, but somehow bankruptcy gets talked about a lot here, and lots of times, bankruptcy can fit into this arena and not be incongruous, especially if it has to do with motives.
I am into my 2nd bankruptcy (there probably won't be a 3rd because I am in my 60's and probably won't live long enough to amass enough debt again - but by God, I will certainly try!) My Chapter 7 in 1994 came about out of necessity due to divorce, alimony, child support, and other assorted unpleasant realities. Even back then, I cannot say that I did not see it coming - I just rolled the dice and "crapped out". Boo Hoo.

My 2008 Chapter 13 was a deliberate shirking of my responsibilities, if you consider repayment of debt a responsibility. I simply decided that I no longer felt like paying my creditors back. All the debt was unsecured, and breaking a promise is not illegal. I was going to simply stop paying and let whatever happens, happen. An attorney convinced me that Chapter 13 was a far easier alternative than lawsuits, harassment, judgments, wage garnishments, bank account seizures and the like. Boy, was he ever correct on that score.
The analogy may not hold up well, but from my perspective, bankruptcy is a better investment than blue chip stocks used to be. In total, I will have walked away from over $100K of "debt" in both bankruptcies when all is said and done. Ahh, but hold on there...the creditors have probably fleeced me for more money than they actually gave to me after 35 years of high-interest payments. I got right back into debt after my 1994 Chapter 7. Looks like they got me coming and going, despite my cynical plan.

So the creditor IS inside your head, literally. Just don't let it bother you.

[DeadManCrawling]

Here is part of the text, since the link is now a subscriber only thing.


The next time you apply for a credit card, your credit report and income will be only a part of the criteria used to determine your creditworthiness. For that matter, as long as you have the card, what you use it for will be noted and added to a growing set of data that makes up your psychological profile, which will then be referred to every time the bank deals with your or reevaluates your risk as a customer.

The New York Times Magazine takes a look at this new method of determining credit risk, pioneered by Canadian Tire executive J.P. Martin about 6 years ago.


Martin's measurements were so precise that he could tell you the "riskiest" drinking establishment in Canada - Sharx Pool Bar in Montreal, where 47 percent of the patrons who used their Canadian Tire card missed four payments over 12 months. He could also tell you the "safest" products - premium birdseed and a device called a "snow roof rake" that homeowners use to remove high-up snowdrifts so they don't fall on pedestrians.

It's not just that what you buy reflects your socioeconomic level and current financial status, however; what Martin did was take the raw data and tease out personality traits that explained the the purchases while predicting future behavior.


Why did birdseed and snow-rake buyers pay off their debts? The answer, research indicated, was that those consumers felt a sense of responsibility toward the world, manifested in their spending on birds they didn't own and pedestrians they might not know. Why were felt-pad buyers so upstanding? Because they wanted to protect their belongings, be they hardwood floors or credit scores. Why did chrome-skull owners skip out on their debts? "The person who buys a skull for their car, they are like people who go to a bar named Sharx," Martin told me. "Would you give them a loan?"

Lenders have been using this sort of data mining ever since, but until recently they've kept it on the down-low to avoid triggering any privacy fears from customers. Now, with billions of dollars of losses from formerly profitable customers (i.e. the slightly risker ones) who suddenly can't pay, the lenders are using their psychological data not only to screen for the "right" sorts of customers but also to try to convince the bad ones to pay off their debts.

There's another reason for this, too: it helps build a stronger relationship with the customer.