Chase considers rewarding customers for boosting credit scores
Banks could follow health insurers’ lead in using games to improve customers’ credit
Someday, boosting your credit score may not only help you lower your interest rates or get approved for a new loan. It could also help you earn additional rewards.
To help nudge people into getting in better financial shape, Chase is considering doling out extra perks to consumers who have improved their financial wellness.
In a recent interview with Business Insider, Chase CEO Jamie Dimon revealed that the bank is considering showering its borrowers with tangible benefits – such as discounts or rewards – in exchange for proactively building a healthier credit score.
“We might gamify it, but also give you real rewards,” said Dimon in the interview. “If you get to 700, 750, we’ll cut your mortgage costs a little bit. If you get to this, we’ll give you actual rewards like you do in credit cards today.”
The proposal Dimon described in the interview hasn’t been rolled out formally; nor is it clear just how close Chase is to making rewards-for-better-scores a reality.
But if the proposal comes to fruition, it could inspire other banks to reward their customers for improving their financial vital signs.
A new reason to boost your credit score
According to Business Insider, Chase is also getting ready to beta test a number of other tools designed to help consumers “get more financially fit.”
Chase spokeswoman Patricia Wexler declined to provide CreditCards.com with specific details, but confirmed that Chase is in the process of developing ways to help consumers tone up their finances and trim their financial waistlines.
“We’re always looking for new ways to show that we’re there for our customers and have their backs,” wrote Wexler in an email.
This isn’t the first time Chase has used rewards as a carrot. Since 2017, Chase has allowed select credit card holders to earn extra rewards points in exchange for getting a Chase-approved mortgage. Chase Freedom cardholders, for example, are currently offered 25,000 bonus points when they close a mortgage with the bank. Chase Sapphire Reserve cardholders are awarded up to 75,000 bonus points.
The tools sound similar to game-like incentives used by health insurers
It’s not clear when Chase plans to formally announce any of these new financial fitness tools. But the initiative Dimon described to Business Insider sounds a lot like the gamification tools that health insurance companies have been using for years to encourage people to make healthier choices.
Many of the nation’s largest health insurance providers, for example, offer game-like wellness programs that reward members for healthy behaviors, such as wearing a fitness tracker or getting more exercise. Humana’s Go365 program, for example, offers rewards points for everything from working out to visiting the dentist. Just like with a credit card, Humana’s points can be exchanged for gift cards, merchandise and more.
Similarly, UnitedHealthcare’s Motion program awards cash to members who agree to wear a fitness tracker and meet certain health goals, such as taking more steps or ramping up their workouts.
The gamification programs have been popular, in part, because research shows that motivating people with games and extra incentives is effective.
A 2017 study published in JAMA Internal Medicine, for example, found points-based games that reward people for moving more can help motivate them to exercise.
“Gamification helps motivate people by making the hard stuff in life more fun,” noted Harvard professor Ichiro Kawachi in an article about the study.
Fintech firms get in on gamification
Financial services providers have also been experimenting with games that encourage people to save more. During the 2018 Super Bowl, for example, the online bank Ally create an augmented reality savings game for people to play during commercial breaks. Players were encouraged to name their saving goals before playing a game where they drop virtual amounts of money into piggy banks.
A number of apps have also popped up in recent years that use gamification to encourage people to make healthier financial choices.
For example, the months-old app Blast fuses online gaming with savings. Every time users reach a goal playing a mobile game that’s been linked to the app, Blast will transfer money from their checking account to their savings. People can also compete with other app users in a chance to win up to $1,000.
See related: How credit score simulators can help your score
An easier way to reach your goals
Many gamification tools are marketed toward people who already love to play games. But even people who rarely play may benefit.
Setting goals – such as saving more money or improving your credit score – and getting rewarded for it may make it easier for you to stick to your goals and follow through.
If your bank offers a gamification tool that helps you track and celebrate your progress, go ahead and try it. You may find that the extra rewards, or friendly competition, offer just the kind of motivation you need to finally reach your most ambitious goals.
- Credit scores are rising: How not to get left behind – The average credit score among U.S. consumers is now 704. Are you more likely now to be denied credit if your score is much lower? Some recent studies suggest the answer is yes ...
- 2019 will bring big changes, more control to first-time borrowers – Beginning this year, young borrowers with thin or non-existent credit histories will be able to proactively influence their FICO scores by granting credit bureaus access to more of their financial information ...
- Experian offers a way to raise your credit score in real time – Experian has launched a new program that allows the credit bureau to access your on-time mobile phone and utility payments, potentially raising your credit score in real time ...