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Recently, MIT economists Hong Ru and Antoinette Schoar analyzed over a million credit card mailings collected by Mintel, a company that pays people to read their junk mail. The economists scanned the terms of these offers and noted the income and education levels of recipients. Now Jeff Guo writes in the Washington Post that if you want to know what credit card companies think of you, look at the junk mail you receive from credit card companies. Are you "pre-screened" for lots of mileage-reward cards? Banks think you're rich and educated. Do you mostly see offers for low-APR teaser rates? Banks think you're poor and uneducated — and, perhaps, vulnerable to financial traps.
Cards with travel rewards epitomize the kind of product aimed at the rich and educated. It's a fairly exclusive niche — only about 8 percent of credit card offers fall into this category. People in this demographic are the most likely to jet around, and therefore most likely to appreciate a card that will earn them frequent-flier miles. In contrast, the card offers sent to poorer, less-educated people were often loaded with risky features: low introductory APRs, high late fees, and penalty interest rates that kick in if you break the rules. Ru and Schoar believe that the system is tuned precisely to take advantage of those who make financial mistakes. "Backward loaded credit card features with high late fees can only be optimal [for companies] if customers do not understand their actual cost of credit," they write, using a term to describe arrangements that offer low upfront fees but higher penalty fees.
(Score: 5, Informative) by Anonymous Coward on Friday October 23 2015, @08:31PM
Instructions are at http://www.consumer.ftc.gov/articles/0148-prescreened-credit-and-insurance-offers [ftc.gov]
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(Score: 2) by dyingtolive on Friday October 23 2015, @08:39PM
Wish I didn't mod so much spam. This could be good for more to see.
Don't blame me, I voted for moose wang!
(Score: 3, Insightful) by SrLnclt on Friday October 23 2015, @09:11PM
Beat me to it. I don't think I have received any "pre-approved" credit card offers in the last six or eight years after doing this. It saves me time, I get less junk mail, have less stuff to shred, and best of all it was free. I highly recommend it - it's just a shame I had to opt out instead of opt in.
I view these offers and the blank balance transfer checks your credit card company may send out as security issues. If someone steals my mail it is far too tempting to try and use this stuff. I know the banks have things in place where someone would need to do more than steal my mail to use these things. I just want to make it easy on anyone - particularly when I have zero chance of ever wanting to open a credit card or use those transfer checks because I got something in the mail.
P.S. If you don't want to spend 5 minutes doing this yourself for free, Lifelock would be glad to do it for you if you sign up for their high quality service. /Ducks
(Score: 2) by frojack on Friday October 23 2015, @09:24PM
I don't think that website did anything for you.
What put the stop to pre-approved credit card offers was a change in the law that made the credit card companies responsible for charges made on a pre-approved card when there was no prior business relationship.
No, you are mistaken. I've always had this sig.
(Score: 2) by Joe Desertrat on Saturday October 24 2015, @05:48PM
Years ago they used to send pre-approved credit cards, not just offers, but a court decision put a stop to that.
(Score: 1) by mr_bad_influence on Friday October 23 2015, @09:50PM
I opted out too using a different method. Every time I would receive an offer, I would mark the application in big red letters 'do not want, take name off list' and send it all back in the prepaid envelope. It cost them not only postage but labor to deal with it. Seems to work, I haven't gotten another offer in years.
(Score: 2) by hemocyanin on Saturday October 24 2015, @12:51AM
If you really want to be devious, take the marketing junk from one offer, and put it in the prepaid envelope of another offer. Rinse and repeat.
(Score: 2) by TheRaven on Saturday October 24 2015, @01:32PM
sudo mod me up