I was reading an article in Cards & Payments, a credit card industry magazine, that discusses the rising popularity of personalized cards, those that have your picture, or a picture of your alma mater or company, or some other distinguishing characteristic that makes you feel more emotionally attached to the card. The most interesting part of the article were the following statistics on photo cards from a Datacard Group research study for 2005-2006:
– 62% of photo card customer’s outstanding balances are higher than the U.S. national average.
– 50% fewer customers are likely to switch to other cards or destroy their cards when renewal time comes.
– 34% of photo cardholders’ monthly volumes are higher than the U.S. national average.
– 15%-20% more transactions occurs with a personalized card than with one that is not personalized.
– 2%-5% of photos submitted are attached to card applications, suggesting photo cards draw new customers.
Cards & Payments is an industry magazine so they’re portraying the state of the industry so that credit card insiders can make decisions, they’re not trying to sell a particular product or pimp out some service and they certainly aren’t on the end consumer side. That’s the perspective I have when I see those statistics and they show that these personalized cards work because they tap into vanity. The basic idea behind the article is that if you feel attached to a card, say because it has a football logo on it or an American flag (Discover card popularized these), then you’re more likely to use it even if the financial reasons aren’t as strong.
Do not get emotionally attached to your financial transactions, they should not be about emotions, they should be about numbers and what makes financial sense.
For example, Vanguard is great because they have low fees, reliable service, and I’ve never had a problem with them. If Vanguard sent me a handwritten letter each quarter telling me how much they valued my patronage, I’d certainly be impressed. However, if they sent me a handwritten letter saying they were going to quadruple their fees then I wouldn’t stick around because Fidelity makes better sense financially and they have a similar reputation. When it comes to business, and personal finance is business, keep emotions out of it and don’t get attached. You might get along with the local teller at your bank but if the rates aren’t favorable or they aren’t willing to nix a fee, go to another bank. Other banks have really nice tellers too. 🙂