Data-driven psychologists are now in high demand, and the industry is using them not only to screen out risky debtors but also to determine which cardholders need a phone call to persuade them to mail in a check. Most of the major credit-card companies have set up systems to comb through cardholders’ data for signs that someone is going to stop making payments. Are cardholders suddenly logging in at 1 in the morning? It might signal sleeplessness due to anxiety. Are they using their cards for groceries? It might mean they are trying to conserve their cash. Have they started using their cards for therapy sessions? Do they call the card company in the middle of the day, when they should be at work? What do they say when a customer-service representative asks how they’re feeling? Are their sighs long or short? Do they respond better to a comforting or bullying tone?

These are all neat anecdotes which, in sum, lead Duhigg and his editors to the headline, “What Does Your Credit-Card Company Know About You?” Which is, as it seems from the reporting, quite a lot. Based on the evidence Duhigg collects, all this data mining has been effective. One collector, trained in Abraham Maslow’s hierarchy of needs theory decides that a delinquent customer should be treated more firmly:

Santana’s classes had focused on Abraham Maslow’s hierarchy of needs, a still-popular midcentury theory of human motivation. Santana had initially put this guy on the “love/belonging” level of Maslow’s hierarchy and built his pitch around his relationship with his ex-wife. But Santana was beginning to suspect that the debtor was actually in the “esteem” phase, where respect is a primary driver. So he switched tactics.



“You spent this money,” Santana said. “You made a promise. Now you have to decide what kind of a world you want to live in. Do you want to live around people who break their promises? How are you going to tell your friends or your kids that you can’t honor your word?”

The customer agrees to pay back a greater sum of his debt. Which is fascinating, if not overly convenient, stuff. As the economy falls apart, vulnerable consumers are choosing between paying the credit-card bill or the electricity bill, and a collector’s tone can, perhaps, affect the outcome. But all that is secondary to the imbalance of information that consumers face. Just skim this Washington Post Q&A about credit cards. Consumers left and right complain about being duped by creditors:

Mount Air, Va.: I bought a Freezer from Sears on my Sears Mastercard (Citi). The first bill came in with a 28 day grace period but Sears had not entered the transaction under the special no payment/no interest for 12 months promo that I bought the freezer under. Second bill came in with promo noted but now the grace period had automatically dropped to 20 days (I called Sears to confirm this). Call me paranoid but I think they do this so that customers will miss the new due date and default on the promo allowing Sears/Citi to collect on fees. Will prohibiting this practice be part of the new rules?



Adam Levin: You’re not paranoid. It’s a given that issuers make more money when people miss the due date and end up losing the interest free promotion.



The Fed Rules that go into effect July 2010 will require issuers to mail statement at least 21 days in advance. Both the House and Senate bills address this as well.



Watch those due dates in the meantime!

Katia Bachko is on staff at The New Yorker.