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Credit Card Ads: Trading Privacy for Discounts


Buy dog food at the pet store today and tomorrow you might see ads online for grooming tools or training classes — if credit card companies are allowed to target consumers based on their purchases.

MasterCard and Visa are working on plans to market their transaction data to advertisers, according to today’s Wall Street Journal. Currently, targeted ads only reflect browsing behavior and purchases on particular sites, but companies want to be able to sell advertising based on offline transactions as well – a change that is already raising privacy concerns.

“People don’t like to be tracked by what they buy,” says Linda Sherry, a spokeswoman for consumer advocate Consumer Action. The companies could also hand over enough information that marketers can vary pricing based on number of visits or previous purchases. “That just seems totally unfair,” she says.

Consumers who would rather not be tracked — even if it means no special deals – can usually opt out from sharing their information, Sherry says. Look for the privacy notice your bank sends out annually, which should contain instructions for opting out. MasterCard told the Journal that it lets shoppers remove their information by providing the card number at the “Data Analytics Opt-Out” page at www.mastercard.us/privacy.

But the ads under consideration aren’t so different from the ones that may already appear on your monthly bank statement, as a result of banks sharing information with marketers, says Dennis Moroney, a senior analyst at TowerGroup consulting firm. And there’s even an upside: deals and discounts.  Citibank, for example, offers ads for its own services like Price Rewind price-tracking, as well as pitches for its Citi Specials, including early access to sales on Ideeli.com and 15% off at Blue Nile. More than 2,000 smaller banks and credit unions use Statement Rewards, a program that offers shoppers who frequent partner retailers the opportunity to buy special deals, like a $50 Babies R Us gift card for $35. (Think credit card rewards meets Groupon.)

“The objective here is to try to drive sales,” Moroney says. Pitching you products and services based on things you’ve already bought with a credit card increases the chance that you’ll buy, and secures how you’ll pay. Such deals are often sweet enough that consumers don’t mind that they’re being tracked, and marketed to, he says.


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