Smart SpendingSmart Spending

Change in credit reporting leads to better card offers

Banks can now see expanded details of your credit habits. This means more aggressive marketing -- and juicier credit card deals.

By Donna_Freedman Sep 4, 2013 2:21PM

Logo: Woman with paperwork (Comstock Select/Corbis)Remember when people who paid their cards in full were called "deadbeats"  because they didn't generate much income for card companies?


Chin up, responsible payers: You're now called "transactors," and those same companies really, really want your business.

And those who carry balances, aka "revolvers"? Plenty of you will also be wooed, thanks to additional data now displayed on credit reports.

In the past your file showed your credit line, your total balance and whether you failed to pay on time. Now the credit bureaus also display the minimum payment due, the amount you paid and the date you paid it -- and they're showing 24 months' worth of this information.

This "time series" reporting helps banks market more effectively -- and boy, are they doing so.  Credit card direct-mail solicitations rose 22% between June 2012 and June 2013, according to The Detroit News.

The incentives rose, too: Everything from sign-up bonuses to unlimited cash-back to 50,000 airline miles right off the bat.

"For the consumer, it's a no-lose scenario: They're going to get better offers," says John Ulzheimer, credit expert with  

Revolvers -- customers who carry a balance -- are more likely to be offered balance transfers than big sign-up bonuses. However, some revolvers might also get rewards-card offers because of what banks can now discern about their spending patterns.

For example, in the past your file would indicate only how much you owed and whether you missed a payment. But suppose that for the past 18 months you've made great progress on paying down debt, and always well before the due date. A card issuer can now see that.

Of course, the issuer can also see someone making minimum payments at the last minute on multiple accounts. If that's you, don’t hold your breath waiting for an airlines reward card.

Lessons learned during the recession

This isn't just about marketing, however. The new method of reporting helps issuers manage risk, according to Ben Woolsey of 


Default rates are much lower and the banks are "quite profitable," yet recession-era losses have made them cautious. Even though card offers are increasing in both numbers and incentives, they're still not being given to just anybody.

"They've (generally) changed their underwriting policies to be more conservative," Woolsey says.

Suppose you're pretty content with the card you have? Don't automatically rule out a change, because the benefit might be worth the minor disruption.

(Applying for a new card or closing an old one won't cause major damage to your credit score. However, MSN Money columnist Liz Weston suggests holding off on doing either one if you plan to apply for credit -- including an auto loan or mortgage -- in the near future.)

Don't like change? You can still benefit. Your current card issuer is likely to work a little harder to keep you happy, since it knows you'll be getting offers from competitors.

Ulzheimer, who's been in the industry for more than two decades (including half a dozen years with a credit bureau), says card companies will have to "amp up their game," perhaps proactively.

"Everybody's going to have to do a better job at offers and marketing and terms," he says.

History makes a difference

That includes marketing to consumers whose finances had gone awry. Suppose a major life event (illness, job loss) led to big debts but you've paid them down considerably in the past two years. Your current card company should realize that competitors will be interested in you, and offer a lower interest rate or some other perk to get you to stay.

(And if that doesn't happen? Give customer service a call and ask for a better deal, hinting at the new options suddenly opening up.)

That road runs in both directions, however. Issuers can now see that for the past 18 months you've made only minimum payments on burgeoning debts. You won't have much leverage with your current issuer (although it doesn't hurt to ask), and you shouldn't count on lucrative offers landing in your mailbox.

"Issuers are still pretty conservative. That history makes a difference for them," says Trevor Carone of Experian.

"They want to grow, they want to lend money, but they're still concerned about overextending and granting too much credit."

However, responsible credit users have plenty of opportunities, according to Curtis Arnold of No one is saying you should get lots of extra cards and spend more than you can afford to pay off. But why not look for ways to improve the bottom line?

"This is a very competitive market. Use that competition to your advantage," Arnold says. "Chances are there are much better cards out there than the one you currently have."

More on MSN Money:

Sep 4, 2013 4:51PM

What waste of space. OF COURSE retiring young makes you live longer because working SUCKS!

We all hate it and can't wait to be done with it! Doesn't take a study to know that!


"Oh you hate your job? Why didn't you say so. They have a support group for that. It's called everybody and they meet at the bar"

                                                                    -Drew Carey

Sep 5, 2013 3:45AM

I do NOT find my credit card offers falling into these descriptions.  I havenearly  ALWAYS paid my cc bills in full.  My only exception was a a couple balance transfer no interest/no fee deals back in 2007 that were paid in full before the no interest time ran out (about a year).


Here it is nearly 6 years later and all I still get is no interest but 3/more$ transfer fees.


I do pay the bills very close to the due date (business day before) since I pay online via my bank.

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.