| On the cards |
[May. 14th, 2009|06:34 pm] |
Frankly amazing article about customer profiling by credit card companies at the NYT. Like this bit:
But giving credit cards to riskier customers posed a problem: How do you know which cardholders will pay something each month, providing fat profits, and which will simply run up a huge tab and then disappear?
The Ph.D.’s arrived at two solutions. The first was to create thousands of new kinds of cards with their own credit limits, terms and interest rates. Such a strategy theoretically protected companies by limiting how much a cardholder could buy and by charging sufficiently high interest rates to ensure that if a few cardholders walked away, the companies still made plenty of money.
The other solution was learning to predict how different types of customers would behave. Card companies began running tens of thousands of experiments each year, testing the emotions elicited by various card colors and the appeal of different envelope sizes, for instance, or whether new immigrants were more responsible than cardholders born in this country. By understanding customers’ psyches, the companies hoped, they could tell who was a bad risk and either deny their application or, for those who were already cardholders, start shrinking their available credit and increasing minimum payments to squeeze out as much cash as possible before they defaulted.
There are some real gems in the article, long but definitely worth it, go read. [HT Radar]
This article however, is complete tosh, if LLL is such a savvy user why is he not following basic computer security, you know, anti-virus, anti-spyware & firewall? The tag line for the article:
In short, alongside the ethical considerations surrounding casual piracy, there are also very good technical reasons why people should not try this at home
Is IMO a bit of blatant scare mongering propaganda, courtesy of FAST. If you read as many computer magazines as I do, you get used to the industry line. But it's never OTT. Things must be getting desperate if they're fostering such pseudo technical tosh onto otherwise respectable newspapers. |
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praxis22's journal
good