Need an Interactive Map?

If you have a website and want to display statistics or improve navigation you should consider getting an interactive flash map. Options include a flash world map, a flash us map, and a flash canada map. These maps are fully customizable and easy to install. Free trials are available.

Recent Posts

Sponsored Links

Please login to Automatic Backlinks and activate this site.

website uptime

« | Main | »

Status Credit Cards

By Chris | March 22, 2010

In high school, credit cards were alluring.  They were a symbol of freedom and adulthood. I couldn’t register a domain name or rent a hotel room without one.  So, I convinced my parents to cosign the papers I needed to get a debit/credit card at my local credit union. The credit part of the card only kicked in if my checking account ran out of money.  My credit limit was $100.

In college, when I started running out of money I applied for numerous credit cards.  I wanted some security in case of a crisis (e.g. if my car broke down in the middle of nowhere; eventually it did).  I didn’t have a credit history though, and application after application was rejected until I finally found a company willing to take a chance on a student with no income.  Since then, credit cards have lost their luster.  Too often I miss the payment deadline by a day and must write customer service begging for a fee waiver.

From an economics perspective, credit cards are fascinating and perplexing.  Credit card companies act as a middleman minimizing the transaction costs between merchants and customers unknown to each other.  The buyer is protected against a seller who doesn’t provide goods as promised and the seller is (largely) protected against buyers not paying.  When you think about it, it truly is amazing that I can type a number on my computer and someone across the country will ship me something very valuable.  This is only possible because credit card companies are so good at sniffing out fraud.

On the other hand, credit cards are perplexing in that people use them so irresponsibly. Credit card companies are offering 30-day interest free loans to their customers. Instead of taking advantage of this offer, most customers rack up revolving debt at above market interest rates.

In addition, customers shell out hundreds of dollars in annual fees for prestigious cards with extra perks.  One of the bloggers I follow, Tynan, is a big fan of Amex’s Platinum Card.  He raves that the card replaced his laptop when he left it in the rain.  He praises its concierge service which has served him well during his travels.  Maybe the perks are worth the annual fee?  Possibly, but it turns out the American Express Gold card has nearly identical benefits with an annual fee that is $300 cheaper. On the other end of the spectrum, Amex offers an invitation only Centurion Card with a $2,500 annual fee.  It’s reminiscent of the “I’m Rich” iPhone application.  You have to admire American Express’ skill in price discrimination.  But other companies are succeeding in the market.  There is now a Visa Black Card with mediocre benefits that is made of carbon.  It’s wildly popular.

I think credit cards are uniquely suited for status signaling. I’ve come to realize this recently when alternating paying for things with my girlfriend.  I’d much prefer to pay for dinner than for gas.  Paying for the meal is public and projects status in and of itself.   It’s natural to want to augment that emotion by paying with a prestigious card. And yet, in the case of credit cards, the payment for prestige is so obvious.  A Mercedes may be higher quality than a Toyota but a metal card has no obvious advantage over its plastic cousin.  Status credit cards might just be the most overt form of conspicuous consumption out there.  Thorstein Veblen would cringe.

Topics: Behavioral Economics, Economics, Markets, Psychology | 11 Comments »

11 Responses to “Status Credit Cards”

  1. Esperanza Says:
    March 17th, 2015 at 9:39 pm

    If you do not have a credit card yrsuoelf you can use a parents or a friendsI use my moms credit card to pay for WoW (technically they pay for WoW for me too)My Brothers friends uses my brothers credit card to pay for WoWBut if you dont want to mooch off of your friends or family you can buy game cards which they have at most;Best Buys, Game Stops and Walmarts but buying with a credit card is easier and you can buy 6 months at once for cheaper which i do it goes from 15$ s a month to 12$ s a month. What you do is pay 72$ every 6 months.

  2. auto insurance quotes Georgia Says:
    April 1st, 2015 at 9:26 am

    Putting job candidates to fill current vacancies in the volunteer needs to the overwhelming amount of applicants. Equipment in use by this profession are mops, screwdrivers, and towels. The ideal manager will participate in the success of socialization by using behavioral outcomes and affective outcomes. They can seek individuals internally and externally to replace employees who have initial contact with the existing practices of the organization, it is for the hotel.

  3. life insurance quotes Says:
    April 19th, 2015 at 9:04 am

    Beautiful and sooooooooooooooooooo true… It is soooooooooo painful to see your children not walk in the ways of the Lord, I can’t even phathom what God feels. With God all things are possible, so not by my sight but my faith in Him do I continue to pray. Thank You, that was very inspirational…. Peace and Joy, Jo

  4. cialis Says:
    May 27th, 2015 at 11:29 pm

    I really appreciate free, succinct, reliable data like this.

  5. car insurance quotes New York Says:
    May 27th, 2015 at 11:32 pm

    Deep thought! Thanks for contributing.

  6. life insurance quotes Says:
    May 27th, 2015 at 11:52 pm

    Is that really all there is to it because that’d be flabbergasting.

  7. viagra levitra Says:
    May 28th, 2015 at 12:18 am

    I have witnessed that smart real estate agents all around you are getting set to FSBO Promotion. They are noticing that it’s more than simply placing a sign post in the front place. It’s really about building connections with these sellers who at some point will become customers. So, once you give your time and energy to supporting these traders go it alone — the “Law of Reciprocity” kicks in. Good blog post.

  8. where to buy levitra Says:
    May 28th, 2015 at 12:54 am

    Advertising yourself is the most important tools for a good supply of backup funds in the best possible light but really leaves a viewer with a higher price tag. The key is this person is going to make everyone wait for their meal, or stop the ceremony when they missed a shot? What is the most you do if they perceive you as being a persistent salesperson.

  9. buy cialis online Says:
    May 28th, 2015 at 1:49 am

    If not for your writing this topic could be very convoluted and oblique.

  10. life insurance Ohio Says:
    May 28th, 2015 at 1:56 am

    Zune and iPod: Most people compare the Zune to the Touch, but after seeing how slim and surprisingly small and light it is, I consider it to be a rather unique hybrid that combines qualities of both the Touch and the Nano. It’s very colorful and lovely OLED screen is slightly smaller than the touch screen, but the player itself feels quite a bit smaller and lighter. It weighs about 2/3 as much, and is noticeably smaller in width and height, while being just a hair thicker.

  11. Says:
    August 13th, 2015 at 1:21 am

    You have the monopoly on useful information-aren’t monopolies illegal? 😉