The Two Types of Credit Card Users: Churners and Chuggers
There are numerous pieces of philosophical shorthand floating around about there being “two types of people” in the world — those that like a certain type of entertainment or music, say, or those that don’t. Perhaps a kind of food, or a political philosophy.
Understanding Churners and Their Credit Card Strategies
While this kind of binary redaction may not be the most useful way of sorting through the world’s various complications, two items popping up in the news cycle this week would seem to suggest there are, after all, two types of credit card users: Those who hold on to the same cards as long as they can, and, well, “churners.”
“Churner” may sound like a job position on a shark-fishing trawler or in a butter factory, but in the world of consumer credit, they are “customers who jump from credit card to credit card just for the sign-on bonus,” according to a Bloomberg article on American Express Card’s revamped strategy to weed out these “churners” or “gamers.”
But the rewards on the “high end” of credit-card use can truly be compelling. AmEx, after all, describes itself as being in “‘hand-to-hand combat’ with JPMorgan Chase & Co.’s Sapphire Reserve card as issuers sweeten rewards to attract new customers,” which “made a splash” with its Sapphire Reserve card “featuring an initial sign-up bonus of 100,000 points, drawing so many applicants it temporarily ran out of materials to mint it.
“‘What will be interesting to see not just with Chase but with other competitors is what happens when the short-term incentives are dried up or what happens if people game ‘ the offers, AmEx Chief Executive Office Ken Chenault said.”
And yet, 48 hours in the same news cycle, came a report from CreditCards.com that “millions of Americans are finding a credit card they like, and sticking with it for years.”
Is that really better than “churning?” The article acknowledges that “you can probably get more points by switching to a new card because the market is saturated with card companies and some of them are offering some pretty sweet sign-up bonuses. ‘It normally takes a long time to accumulate 50,00 bonus points or airline miles but every now and then, you can accomplish that with a single sign up bonus.’
And yet: “32 million U-S card holders haven’t changed their preferred card in at least 10 years.”
Sticking with the Same Card: The Chuggers’ Approach
Though whether churning, or “chugging along,” your customers will want to know their cards are being treated securely — above and beyond the convenience — when they’re buying from you. And while that’s part of what AVPS offers with its card processing regardless, we’ve also added SID4B to give you –and your customers — additional layers of protection.
No sense agonizing — or churning — over whether your data is safe. Contact your AVPS rep to find out more. Or at least do that first thing, after you get back from using all those new reward points?
