Crossing the line to Obnoxiousness

This is a general observation, not targetted at anyone. Just wanted to see if my thinking is way out of line with society in general.

A lot of what I am reading these days on BB about credit card bonus offers, it seems almost as if peeps are crossing over to the side of being obnoxious bullies. Apply for a card with a given bonus, ie Chase Preferred Card, get the 50k, another targetted offer comes out, everyone piles on, some get the additional bonus points, others don't.

It's when they don't that the awful behaviour begins. Multiple calls/emails to CSR trying to get their own way, postings about how they are going to cancel their cards and how everyone else should as well, being the supermodel of credit card applications and complaining how it's not worth getting out of bed for a mere 50k points.

I'll admit I got luck and did get the addtl 50k of Chase points. I'll also admit that I've never asked for a bump bonus before and I have never churned any cards to this point. I've made applications and gotten cards but have never applied just to get the bonus then dumped the card.

I'm almost feeling as if peeps are becoming more about the game of getting the points rather than focussing on what they are going to do with them. Instead of seeing gratitude for what we do get, there seems to be a greater focus on the displeasure of what could have been.

For example, BA card 100k points, spend the 30k and you are in First Class with a companion for very little effort and probably $1500 in surcharges. Instead peeps seem to whine ad-nauseum about the fees with very little focus on the fact that they and a mate are sitting in First Class for very little cost.

All I know life is hard enough that I'm not going to allow myself to browbeat CSR's who are probably earning minimum wage to give me something to which I am not entitled.

 

Its greed, a lot of people feel that they deserve to get every little thing possible for free, regardless of whether or not they've earned or deserved it. Gimme Gimme Gimme. If I cry enough the person will just give me what I want to get me off the phone. Its like they never passed their 7th birthday! On the other hand, I feel sorry for that kind of person. They probably havent accomplished much of anything with themselves. It takes a lot of effort, anger and disrespect to brow beat CSR's for something they don't readily deserve. But they have the points to pretend that they did.

 

[QUOTE If I cry enough the person will just give me what I want to get me off the phone.][/QUOTE]

I am not sure what everyones motives are for getting the CSR to do something for them, but crying and bullying are very poor tactics in any case. The idea is to be nice and hope they help you out. Every worker deserves out full respect whether they are a top executive or an entry level worker.

 

Thanks for starting this thread Toula. In TOBB I came under attack for making similar points, although mine we probably not so well stated. I am not a great admirer of the credit card industry despite having been a consultant to it and a beneficiary of unreasonably high compensation for some of my efforts. Beyond that I find it appalling that many people do not think they should deal fairly with a business because, they say, the business should look out for itself. That is true, in an odd way, but the Golden Rule still ought to apply to all dealings, IMO. It is refreshing to find that some other people agree with that.

 

Fully agree on all points, but remember, it's the airlines themselves that make this mess....

 

I certainly think that the credit card banks are completely stupid in how they throw around bonuses and let people churn cards, but that doesn't mean I have to completely throw my ethics out of the window and abuse their stupidity. I always image if this was my little neighborhood coffee shop instead of a big international bank, how would I treat them? Would I sit there all day (taking up one precious table) using their free wifi and a/c, buying one small coffee in the morning and getting free/cheap refills all day until it's closing time?

 

Agree, but they are making money on each transaction.....

 

I think it depends on how you mean abuse.

I do agree with the OP that the sense of entitlement is ridiculous. Especially considering that one can very easily find out details like YQ surchages, etc., prior to jumping on the newest mega-super-duper bonus offer.

However, I do think that there's nothing in principle wrong with politely asking if you might be able to benefit from some offer, especially in cases where you have potentially done something to earn a company's loyalty (e.g., asking for retention bonuses because of a high annual spend).

I think you're also making a mistake by lumping in "let people churn cards" in there. Considering that the average card-churner is, by necessity, in a lower-risk credit bracket, such practices cannot be dismissed as predatory lending, etc.

Why, then, do credit card companies allow churning? Because, doubtless, it's profitable. It's quite apparent that the major credit card companies and banks are entirely aware of the practices taking place. And surely some vast assembly of actuaries deep in the bellows of Manhattan has crunched the numbers. Their verdict: in conjunction with the healthy risk profile--the spend requirements combined with the merchant fee, along with whatever benefit the company gets from having a certain demographic in its midst (think, amex), and the "actual" value of the miles--and also the associated marketing/advertising benefits furnished by the products--these credit card bonuses are lucrative. The need for checks and balances on the system (such as one-time bonus restrictions or not) results, surely, from profitability analyses. I'm no lending guru, but, I think it's greed, not stupidity, that keeps the bankers going--and maybe us to.

And I guess that's why I agree with the overall sentiment of the OP. I think we need to step back and think about value, entitlement, and courteous interaction with the bureaucratic world we interact with in this points game. Such reflection is surely salutary, and on many levels. If it keeps you credit score in check, keeps some CSR working in bangalore from getting a browbeating, or keeps your significant other from going insane over your antics, then you've worked towards balance--and that counts for something.

 

Are those the same greedy bankers who wrote mortgages for people who had no demonstrable way of paying it off? Profitable in the short term, maybe, until the whole house of cards comes crashing down? I am not a lending guru either, but I have a feeling that a lot of these offers are driven not so much by profitability of individual customers than by meeting quarterly goals for retaining or gaining new customers. Or maybe the hyper-agressive churners are such a small percentage of the customer base that it's simply not cost-effective to implement mechanisms to stop them (I am sometimes surprised how difficult it is in big companies to get the most obvious and trivial enhancement implemented when IT is involved).

I am not aggressively churning cards (signed up on average for two cards a year over the last five years and less before that... FT ruined me), but I am fairly certain that the value (and cost to the bank) of the bonus points I have earned on my cards outweigh the earnings from my merchant fees.

Let's take one example -- BA 100k mile offer. Let's say Chase pays $0.005/mile -- that means they paid $500 for my bonus miles. With a 3% merchant fee rate, I'd have to charge $16667 for them to earn the $500 back (I realize there's also some fixed per-transaction fee, $0.20 or so, but let's keep it simple). I might have actually spend about that much on the BA card since I got it a year and a half ago, but all that spend isn't "net new" spend -- it's charges that would have otherwise gone on my existing UA Chase VISA... or my existing Continental Chase VISA... or my existing Priority Club Chase VISA. Or my SPG Amex, and that's really the only "net new" spend gain for Chase -- if they convince me to move charges from another bank's card to theirs. But they could have looked at my existing cards' history and would have seen that I already am a regular user of some of their cards -- why would they think I would not stop using one existing Chase VISA and put the charges on the new one?

As it turns out, now that I have the Priority Club VISA with a lower fee and no forex, I will probably cancel the BA VISA after two years of use. I don't think they really broke even on it (in my case) even though I didn't put it back in the drawer after meeting the minimum purchase requirements.

 

Good post and valid observations, thanks.

Strange as it may be, I removed myself from the scenario you described and haven't chased a new cc offer in at least 10 years. Oh the bonus miles I have missed, but rather than wrestle with the possible issue, i'm simply happy with the cc card choices I have made—less bonus or not.

 

Well, I'd be interested to know what the banks actually pay for those miles. The fact that this is an ongoing, fairly transparent process (at least to the consumer) when compared to structured investment vehicles means that--while greed is surely the motivator--it is less likely to be "short-term" profitability minded greed (as with subprime mortage), but just day-to-day business in big american banks.

The situation, I imagine, is further complicated by the relationships between banks and airlines. Surely there is something in it for the airlines to align themselves with thus-and-such credit card issuer/lender vs. another, as allegiances do matter and do change.

So how exactly the bonuses are offered is probably highly related to intra-operational profitability--otherwise we wouldn't see, for example, the 100,000 BA offer. For the airlines, your redemption is definitely not as valuable as it looks. Considering that, on the average domestic flight, business seats are more often than not (of course, this is highly dependent on the route and schedule) upgrades to elite pax, then there's a fairly large inventory of potentially empty seats (plus a few bumped AA EXPs, UA 1Ks, etc.)

Just as with bump vouchers, where the revenue lost is much lower than the revenue gained in overbooking (especially when the route the bump voucher is used towards is a fairly empty flight), selling lots of mile is good for the airlines as they can (hopefully) optimize increase flight loads by adjusting availability of award seats. They have to maintain a large enough inventory to make sure the miles are going of the books, and hopefully (for the airlines) on seats that have market values much higher than needed.

I'm reminded in a sense of select-sale sites of luxury goods, like gilt. Their model is probably highly analogous to the mileage game. By selling premium goods at a discount for limited time-frames (i.e. limited availability)--but still being priced fairly high--they maintain the integrity (i.e., price-point) of the brands they're selling, while still having an optimal revenue structure.

Just like a Louis Vuitton bag isn't "worth" it's price-point in one sense, it maintains its value because of a certain level of exclusivity (see: veblen good). Hence why, when valuing premium airline products, it's extremely crude (and really fallacious) to value a F ticket redemption at the retail price (and not just because you wouldn't pay for that). The experience may be indeed worth $15,000, but, to the airline, it's a highly complicated perishable luxury good that retains its value because people generally don't buy them.The mileage game just gets a lot more complicated because the product is being bought by a whole slew of other things with certain associated values--CC spend, name recognition, greater market share, etc., etc., etc.

Caveat lector: I'm working on a lot of (hopefully) informed speculation here. The economics of loyalty programs are doubtless massively complicated; I'd love if someone with a solid foundation in micro/macro-econ, banking, or brand-management/marketing would comment. It'd be neat to learn more about what keeps this machine going.

 

Doesn't the escalation of bonus offers in the last two years look a bit like, uh, a bubble, though?

Oh, absolutely. Which is why I didn't put the hypothetical value of the 100k miles to me into the post above, but rather tried to come up with a cost value to the bank. Because that's ultimately what they need to be concerned about recouping, not whether the $x000 value I might put on the C or F seat to Europe on BA.

But I think we (or I) are getting off-topic here.

I notice a lot of greed and sense of entitlement when it comes to promos -- mostly by hotel chains since they are really the ones who have regular and fairly lucrative promos (I think we've been spoiled, frankly). While I like a good promo as much as the next guy, my loyalty to a brand is usually not solely determined by the promos offered. And I certainly recognize that the promos have a particular purpose, and that's not necessarily to give me free or cheap hotel nights. While a promo or lack thereof can certainly influence my stay behavior or property choice, I try to look at it analytically and not with a sense of entitlement.

 

I don't know, I'd bet that 99% of the people with obnoxious attitudes about these deals, are simply obnoxious people in general...and probably react similarly in other situations in their lives.

I don't believe calling the bank to ask for reconsideration is out of line at all, in fact many people are able to gain approval after doing so when there were errors, a need to move credit lines, etc. They shouldn't be a jerk about it, though. And I'm not sure why some of them think whining to us is going to change anything though - we're not the bank!

The wife and I don't go after every CC offer, we try and focus on the ones that will best help meet our particular travel goals. Some cards we won't keep longterm, others we will.

 

Speaking of crossing a line .... "peeps"?



-David

 

You're assuming that the bank that issues the credit card will keep 100% of the merchant fee. Don't forget it's likely that the bank that deals with the business is going to keep a portion of the merchant fee --- it's a similar situation to selling a house --- the selling broker and listing broker each get something out of a transaction.

As a result, I think the breakeven position for the credit-card-issuing bank is likely to be a higher amount.

 

Civil behavior towards all csr is always called for. But it also never hurts to ask for the bump. The line is crossed when people won't take no for an answer. I'll send one reconsideration letter if I don't like the answer, but that is as far as I'll go. Remember, it is only miles and points

 

Excellent topic. But I would not try to judge the folks who are less fortunate than I am.

 

As much as I enjoy receiving lots of miles and points, three other considerations remain important for me:
1- How do I feel about what I am doing in order to acquire points/miles? If it doesn't feel right to me, then I let it pass.
2 - Am I building a positive relationship with the company I am doing business with? One-time deals are good, but they don't last. A good long-term relationship creates trust and other opportunities.
3 - Gratitude for what I have and for what I am receiving (or will receive) is far more valuable than any pile of miles and points.

 

I try and act in a similar manner to yourself. I've decided there are lines I will not cross in my quest for points. For me, coins are one area I will not go. I'm not saying that everyone should adopt my position, rather I personally feel for me to do so would violate the general vibe of the agreement between the credit card issuer and myself. If the application requires a $3k spend I can make that happen doing regular activities.

I also agree with building relationships with companies. I think we will be moving our household to AMEX and Chase cards only.

The other hassle I find with going for too many new cards is it dilutes and distracts from my main credit card goals. in 2012 I would like to stay more focussed, and more grateful for what I do have, rather than getting in on every deal.

 

I find that I am always learning and growing with this as well as with other things.
I have gotten cards just for the bonus miles/points and then put them away after I met the minimum spend. Having done that a few times, I've concluded it doesn't feel the best for me and I will do it much less often, if at all, in the future.
I also did coins a few times. It was fun at first, but then I stopped enjoying the process. Also, the goal I had in mind for the coins was met in another way that was just gifted to me. So, another lesson learned, and I doubt I will do coins again.
For me, finding balance is becoming more and more important. I do have reasons to travel that involve family and service, I do have modest income as a retired person. So, it's important to me to find ways to fly and stay in hotels without spending too much money. I'm just going to do that in ways that feel good and feel balanced.
Obviously, for each person the goals and the means are different.

 

I would agree... with the housing bubble collapse, there are fewer people with good credit scores - so more and better promos are necessary to attract them.

Now, while I'm relatively new to the c.c. bonus game, I did luck out with the 100k Chase Sapphire bump. But I do plan on keeping the card for the next year, at least. In the long term, if these bonuses turn out to be money losers (or loss-leaders, etc) for the c.c. companies they're either going to have to get rid of them, or raise the merchant fees they charge (and I think the latter is more likely). I already feel guilty using a c.c. at a mom-and-pop store (no guilt at a national chain - which is an interesting dichotomy in itself), so the idea that by abusing the bonuses will end up raising fees on those stores is enough to keep me "honest" - in that I would hope to never feel entitled to a bonus.

It's easy to get caught up in the "how do I maximize my mile/point earning, and how do I get the best value for my miles.points" game. And while it never hurts to ask for a bonus match we should keep our emotions in check and realize that it more-or-less is still just a game. And as we all learned in little league (or peewee football, etc)... it's not whether you win your lose, but how you play the game

 

Amen!

 

Thank OP for starting this thread.
I am glad I am in a good company here, for awhile I thought I was the only one who didn't jump on all CC offers.
I just signed up Amex Open it is because they are giving 5% on Fedex.. who can't refuse this offer

 

I have a wealthy brother-in-law who laughs at my totally appropriate shenanigans (none of the bad stuff the OP wrote about - really!). But he can afford to laugh since he doesn't have to do it. As for Randy, my guess is you have a number of miles that most of us can't fathom! No different than the way I look at some who go through hoops to get 5,000 miles.

 

Okay - in keeping with the theme, here's my one truly evil moment.

I have a friend who looks to me for advice on this stuff. I told him that he and his wife BOTH had to get the BA Visa, which they did. They are planning a great trip.

A few weeks later, the day after the expiration of the 100,000 mile bonus, I asked if he had applied and gotten the cards (I knew he had). When he said yes, I told him it was too bad since they had just raised the bonus to 250,000 per person! He fell for it, we both felt bad, and then we both laughed a whole lot.