When to be on the lookout for a credit card upsell
Develop a strategy when presented with a new card you may not want
Writes about banking, credit cards and mobile finance.
From the checkout line to your email inbox, there is no place safe from the credit card sales pitch – or from being upsold on a card or service you never thought you’d want.
While you may be seeing fewer credit card solicitations in your mailbox today than in the past, that doesn’t mean issuers still aren’t after your business. They’ve simply diversified their sales efforts to reach you where you are.
Nearly half of all offers today arrive via digital channels, according to the Consumer Financial Protection Bureau’s biennial report on the state of the consumer credit card market, published in December 2017. And no place on your computer or phone is immune from targeting, as issuers use their own websites, social media and even text messages to entice customers to apply.
But if roughly half of all offers arrive online, that leaves plenty of opportunities for issuers to reach you elsewhere.
“It is so common to be upsold on a credit card no matter where you are, you should expect it to happen,” says Brayden McCarthy, a credit card expert and vice president of strategy at the small-business lender Fundera.
Here are three times you should be on the lookout for a sales pitch and how to handle the upsell when it occurs.
1. Cross-selling from your financial institution
That hasn’t prevented banks from pushing credit cards and other products to their existing customers, however.
In fact, a 2017 Digital Banking Report study on marketing trends at financial services companies found banks’ No. 1 marketing objective over the next 12 to 24 months was to “cross-sell, deepen relationships, improve share of wallet (and) increase products-per-household.”
So don't be surprised if you see a credit card ad appear on the ATM machine screen when you attempt to withdraw money. And anticipate a solicitation if you do pop inside a branch or an offer to sell you an add-on service when you call your issuer about something unrelated.
Jesse Harrison, the founder and CEO of the Los Angeles employment law firm Employee Justice Legal Team, says he's frequently been offered credit cards at his bank.
“Whenever I go to withdraw from Chase or to deposit, they do make offers like that,” Harrison says. “It makes me feel not cool if I say ‘no.’ There’s a lot of social pressure there. You want to be cool and say ‘yes.’”
Your bank also may push you to apply for a card that charges an annual fee after you've applied for one that's fee-free, McCarthy says, particularly if they see you have a high income or charge a lot to your existing cards.
“They know you can afford it,” McCarthy says. “They think you fit the profile of someone who might want a premium card.”
2. When other companies try to sell you on their credit cards
Beware of solicitations from other areas of your financial life that aren’t directly related to credit card spending.
McCarthy says he’s seen contracting services and accounting software programs partner with issuers to offer cards to their customers. He’s even been solicited for a card when trying to rent a car.
“It’s a way for that company to make more money on that customer because they’re offering multiple products,” McCarthy says. “And it’s a way for a credit card issuer to get a customer to think about a credit card when they’re not thinking about one.”
Stacy Harris, a Nashville-based music journalist, says she called an AAA insurance representative in December 2017 to do some comparison shopping. She wondered why, with a perfect driving record and a top credit score, her auto insurance premium was on the rise.
The rep told her he couldn’t do anything about her premium cost, but he could give her a discount if she took out a AAA Dollars Plus Mastercard, which pays 3 percent cash back on qualifying AAA purchases.
“When I get stuff in the mail, I just toss it,” Harris, the publisher of Stacy’s Music Row Report, says. “But this wasn’t a call out of the blue. That’s the important thing. I initiated this call.”
Harris said the discount intrigued her, and she applied for the card, even though she has other cards in her wallet that pay the same or more on the reward categories she favors the most. The AAA card pays 2 percent on net gas, grocery and drugstore purchases and 1 percent on all other qualifying purchases.
“The thing that sold me is the idea that I don’t have to use it more just to keep it active,” Harris says. So, Harris pays her AAA premium with the card to earn the discount and uses it for nothing else.
3. At checkout with the percentage-off discount bait
It should be no wonder why you so frequently receive a credit card offer when checking out at a retailer. Store cards are predominately marketed in-store. According to CFPB data, about three-quarters of all applications for store cards submitted in 2016 were done so in person at retailers marketing those cards.
Still, in-store applications make up a small fraction of total card applications. During the first quarter of 2017, just 6 percent of total credit card applications occurred in-store or at a kiosk, data from the market research firm Mintel shows.
Harrison’s advice? Resist the urge.
He recalls finding a jacket at a store and asking if there was any way he could get a discount on the $250 price tag. The store clerk told him he could save 20 percent on the purchase if he applied for and was approved for the store credit card.
Harrison turned down the offer, but not without some hesitation.
“It was difficult to resist,” he says. “I really wanted the jacket, but not at the price they wanted for it.”
How to prepare for the card pitch
When credit card issuers offer the unexpected sales pitch, they’re hoping to catch you at a moment when you’re not thinking critically, McCarthy says.
“My general advice for business owners or consumers is don't take the bait,” he says.
If you receive a surprise solicitation – and you think it might be a card you’d be interested in acquiring – say no on the spot and then do your own research. Compare offers, both for the card the issuer offered you and for other similar cards in the marketplace, McCarthy says.
And understand you’re probably not going to lose the offer when you step back to research it further.
Your goal, McCarthy says, is to ensure the card you’re being offered is right for you. Evaluate the annual fee (if there is one) and what happens to it after the first year of card ownership, the sign-up bonus and any restrictions the issuer places on earning it and, of course, the APR, and your own financial situation.
If, for example, you are already carrying credit card debt, don’t apply for a new rewards card that charges an annual fee, McCarthy says.
“People get sold on the dream and they get pressured into taking out a card,” McCarthy says. “Your approach should be about trying to ensure this card fits your goals.”
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