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5 Ways Credit Card Companies Use Your Personal Data

by Kevin about a year ago in cybersecurity

Wonder what kind of information they’re gathering and how they’re using it? Read on.

Here’s a term that may be new to you: surveillance capitalism. It is the practice of capturing personal data on you, the consumer, and either selling that data to a third party or using that data to serve up relevant advertising and product offers. Much of this happens online, by way of your search history, social media likes, smartphone GPS location, survey and quiz activity and so forth. But one other item also does the digital collecting: your debit or credit card.

Yep, every time you pop that chip into the card reader, your credit card company is gathering new information about who you are, what you do, where you like to do it and when. Wonder what kind of information they’re gathering and how they’re using it? Read on.

1. They share your information with everybody

Unless you opted out, your credit card company can share data it gathers on you with whomever it wants, for the most part. It is one way they make money that goes beyond the interest they get from you.

The card network can share your information as well, via ssl decryption, though they anonymize it and sell it as data insights. Even the payment processor - the electronic box where you insert your card - collects information on you, storing it as a customer profile for the next time you shop.

2. They target you with ads they think you’ll like

Many firms use the information they gather to decide what ads should appear on your social media feeds and the websites you visit. They also bundle up that information and sell it to other marketers who will use it for similar purposes. If they have your email, you might get direct messages from companies you never knew existed. Or see ads for automotive accessories soon after you buy a new vehicle.

Now, you might like that you only see ads for items you're more likely to buy and fewer items that do not fit your personality at all. And that is perfectly fine, as long as you don’t mind feeling like a computer is reading your mind.

3. They get a leg up on the competition

Another way credit card companies use your information has nothing to do with you. Instead, they purchase information from third parties about the competition and then compare their data against it. Are they selling more? Less? What’s popular there versus what’s popular in their aisles. What you buy and how you buy it helps retailers strategize. Often, that can be to the consumer’s benefit.

4. They see if you are doing something wrong

It’s not all bad, of course. Credit card companies are also mandated to share certain information with government agencies if and when they believe suspicious activity is occurring. This can potentially help law enforcement track dangerous individuals or stop the illegal transfer of funds.

5. They engage in interesting social studies

Organizations have even used credit card user data to make some fascinating discoveries about what we do and who we are. For example, one study, by the journal Nature Communications, used the data to determine what we buy as groups (men vs women, different age groups and so forth), where we go when we leave home. Among many things, the study found that women tend to spend the most on groceries while men tended to spend more on toll roads and long commutes.

Credit card companies, like many other companies, are growing more sophisticated in the digital age. They are using your data and my data to learn more about what we buy and why we do it. They are also making a lot of money sharing that data with others. Remember, though, if any of this bothers you, you always have an option to opt out.



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