How Does Your Credit Card Company Know Which Card Is Your Primary Credit Card?
by Mr Credit CardHow does your credit card company know which credit card you are using as your primary card? A reader, Gidi, asked this question:
Hi I was hoping you can help me answer a research question: I have 5 different credit cards, from various banks and issuers.
One of my cards was issued by Capital One. How can Capital One know if I am using their card as my primary card? How would they define “primary” in the first place?
What kind of info do they have about my other cards, and what don’t they have? And how can they fill these info-gaps in order to conduct such an analysis and determine which is my primary card? Thank you for your time and help.
Thanks for your question Gidi. For the true answer, you are going to have to look at your Capital One credit card’s terms and conditions. I can give you the general answer though.
Most likely, Capital One does random checks of your credit report in order to determine whether or not you are using their card as your primary credit card.
Each credit account that you use reports the following information to the credit bureaus each month:
So, it would be pretty simple for Capital One to tell whether or not you were using your other credit cards more, or less than you use theirs. That is if they actually bother to check.
A quick look at your credit report will give them all of the information they need to know, but it is very unlikely that they are checking your credit reports every month to be sure.
To determine how often Capital One checks your credit reports, or what their specific procedure is, you will have to go online and read the current terms and conditions for the credit card that you have with them.
As far as how they define your “Primary” credit card, again, check your terms and conditions. I am not sure which of their credit cards you are using, so there is no way for me to check for you.
Thanks for your question!
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April 19th, 2009 at 22:19
I dont think they could know without you telling them or without all the cards being with the same company.
April 22nd, 2009 at 02:14
Every issuer has every data point about their own card and the individual’s corresponding bureau credit report. For simplicity let’s assume that each card issuer is pulling your credit report each month. This month they will see the balance reported to the bureau from ~ 1-2 months ago. Using this the issuer can make some fairly good guesses about where their card is in your pecking order.
Some of the data points that the issuer gets is your total debt, total credit limit with futher segments for auto loans, mortgages and of course credit cards. If you are like most Americans and pay your credit card bill once its generated the following will happen.
Issuer A sends bill for $300 to clear entire balance or $20 minimum payment
You pay in full $300 bringing the account to $0
Issuer A based on the end of month billing sends to the bureau that your account had a $300 balance
Note: not every issuer has to work this way and may choose to report differently
Even though you paid the debt in full, the bureau will show the balance as of the last month. Now to the question, how can the issuer determine whether they are “top of wallet”. This becomes more of a judgemental call, but is fairly easy to calculate.
If the issuer takes your total credit card balance at the bureau (including its own) – it will sum all credit card debt both transacting – PIF every month and revolving – balance with an interest. If your current credit card debt number at the bureau is $3000 and the issuer sees they only have $300 of that balance from your last statement, its fairly safe assumption that they are at the bottom or near the bottom of the wallet. Now if you repeat the same calculation and the issuer sees $1500 of $3000 at the bureau – now the issuer can safely assume that this card represents is the or near your primary card.
While not exact and each issuer has different criteria this represents the easiest way to determine whether a card is a consumer’s primary.
April 23rd, 2009 at 12:43
I just canceled my Amazon.com Chase credit card because of their high interest rate which they refused to reduce or remove because of my excellent credit record. Considering that today 4/23, Congress is reviewing the credit industry is being investigated regarding unfair consumer practices with credit card companies charges. Since I have other credit cards I don’t need Chase Bank or their credit cards.