For many people, including me, credit card payment is often the single largest payment during the month. Every month, when I pay my credit card bills, I always feel, “if only there was a way to pay this bill with another credit card and earn rewards and enjoy deferred payment…”.
As a consumer, I know that my credit card “bill” is merely a statement of all the bills that I’ve already paid with my credit card. To that extent, it’s silly for me to think of a credit card statement as a bill.
As a self-proclaimed industry insider who claims to understand how credit card works, I know that it’s impossible to pay one credit card bill with another credit card. See Why can’t I pay my credit card bill with another credit card?
But that doesn’t stop me from having this wish month after month. Given that I’ve been using credit card for 33 years, my silly and impossible daydream has lasted 400 months. And I can bet that it will last for the rest of my life. Going by regular Q&As on social networks on this topic, I’m not the only one.
Enter CRED.
For the first time ever, a product has come along that says it will give me rewards for paying my credit card bill. After 33 years, somebody is telling me that my behavior all these years was not all that idiotic after all.
Ergo I think CRED is based on a truly innovative product concept that alleviates a very longstanding, even if irrational, customer pain area. Full marks to CRED for that.
Coming to some specific points.
What has surprised me mildly is why 750+ folks would sell their data for freebies.
— Ravi Kiran (@ravitwo) April 14, 2021
$100 billion companies indulge in nickel-and-diming.
Uber fines Rider even when Driver cancels. Few Riders jump thru' the hoops required to claim the measly refund, so Uber pockets the money. Why is the poster child of startups, creator of new gig economy & $80B company resorting to nickel-and-diming like any roadside $100B bank?
— Ketharaman Swaminathan (@s_ketharaman) June 18, 2019
Billionaires put $100+ million purchases on credit card to enjoy freebies. See UPDATE DATED 14 SEPTEMBER 2020 in my blog post entitled Credit Card Versus Debit Card.
That said, there could be a strong overlap between the “750+ credit score” and “disinterest in freebies” cohorts.
But the point is moot.
CREDcoin rewards is probably only the initial hook. Going by Cardlytics, of which I think CRED is a carbon copy, real value to CRED consumers will come from Targeted Offers / Ads made by brands off of their credit card transaction data. As I highlighted in Your Personal Data Is Not Sold, Just Used, these will typically be ads from brands attempting to drive brand switch by offering mouthwatering 30-40% discounts on 3-5 figure purchases.
When that happens, I’m guessing that the same people who are wary of giving third parties access to their credit card transaction data today will change their mind when they hear about the kind of deals scored by others who have opted in to do so.