2007-12-22, Secret History of the Credit Card (3)

According to McKinley, the key to understanding how credit cards are marketed lies in the great digital revolution, the amassing¹ of data on American consumers.

Well, there is a gold mine of information residing out there in these databases by the consumer reporting agencies, the credit bureaus. They are collecting information about what kind of accounts you have opened, the balances, whether or not you make those payments on time. And that is a huge reservoir of information there that they can tap into and be able to get a sense as to whether or not a consumer is a revolver, someone who doesn't pay the balance off in full each month, so they can kind of sift² those out and / today it's really become almost surgical³.

The ability to surgically⁴ target consumers and track their financial behavior has become a booming business dominated by three credit-reporting agencies which gather information. All that data is then crunched⁵ by a little known company called FairIsaac, which calculates a number called a FICO score for almost every American with a credit history.

 

We are not a credit reporting agency like an Equifax, TransUnion or Experian that's gathering⁶ information daily on consumers and building up consumer records.

Tom Quinn is a spokesman for FairIssac.

We simply work with the credit reporting agencies and they deploy⁷ their data onto our mathematical formula to create that score.

The median FICO score is 720 out of a possible 850. The riskiest⁸ customers have scores below 600. The scores is an indication of how likely you are to pay your bills.

Lenders use that score almost like a thermometer to determine if they are going to grant credit or not, so the Algorithm is an indication of that consumer's future risk in terms of credit behavior.

Algorithm meaning a mathematical formula.
Mathema…, yes, mathematical formula.
And how many people have this number.

We estimate that approximately 75% of the US population that is eligible⁹ for credit, i.e., those who are eighteen years or older have a FICO score at any given time.

You know your credit score?
You are not aware that you have a credit score?
I'm aware that I have one, / I don't know what it is.
Right, I don't know what it is.
I don't know what it is either.

So if I said to you the words, FICO score, do you know what a FICO score is?
I know the terms. I'm not clear on what they are. I've never got my credit score.

An individual's FICO score often determines how much interest he will pay on a credit card. The terms and conditions of the card are laid out in the fine print of this contract.

When I get a credit card, there is a contract that goes along with it. What kind of contract is this, coz I never read it, have you ever read it when it came to you?

Er, I'd have to admit, in most cases I may have just glanced at it. You know, it's filled with so many legal terms and so many pages in such / small print that it can be intimidating¹⁰, I think.

It says that I'm guaranteed the terms of a loan for as long as I have the card.

Yeah, well, the / things, / the one unique thing about the credit card business is that the issuer can change the terms and conditions at will.

Without asking my permission?

Absolutely, they can change it all. It only takes 15 days' notice to make those changes. I mean, you could be offered a five or six percent interest rate today, and perhaps get it. Two month later, that could be 30 percent. There is nothing to prevent the issuer from changing those conditions.

Even professor Elizabeth Warren, an expert on contract law says she has a hard time deciphering her contract.

I've read my credit card agreement and I can't figure out the terms. I teach contract law, and the underlying¹¹ premise¹² of the contract law is that the two parties of the contract understand what the terms are.

1 amassing   

v.积累，积聚( amass的现在分词 )

参考例句：

• The study of taxonomy must necessarily involve the amassing of an encyclopaedic knowledge of plants. 分类学研究一定要积累广博的植物知识。 来自辞典例句
• Build your trophy room while amassing awards and accolades. 建立您的奖杯积累奖项和荣誉。 来自互联网

2 sift   

v.筛撒，纷落，详察

参考例句：

• Sift out the wheat from the chaff.把小麦的壳筛出来。
• Sift sugar on top of the cake.在蛋糕上面撒上糖。

3 surgical   

adj.外科的，外科医生的，手术上的

参考例句：

• He performs the surgical operations at the Red Cross Hospital.他在红十字会医院做外科手术。
• All surgical instruments must be sterilised before use.所有的外科手术器械在使用之前，必须消毒。

4 surgically   

adv. 外科手术上, 外科手术一般地

参考例句：

• Unsightly moles can be removed surgically. 不雅观的痣可以手术去除。
• To bypass this impediment an almost mature egg cell is removed surgically. 为了克服这一障碍，通过手术，取出一个差不多成熟的卵细胞。

5 crunched   

v.嘎吱嘎吱地咬嚼( crunch的过去式和过去分词 )；嘎吱作响；（快速大量地）处理信息；数字捣弄

参考例句：

• Our feet crunched on the frozen snow. 我们的脚嘎吱嘎吱地踩在冻雪上。 来自《简明英汉词典》
• He closed his jaws on the bones and crunched. 他咬紧骨头，使劲地嚼。 来自英汉文学 - 热爱生命

6 gathering   

n.集会，聚会，聚集

参考例句：

• He called on Mr. White to speak at the gathering.他请怀特先生在集会上讲话。
• He is on the wing gathering material for his novels.他正忙于为他的小说收集资料。

7 deploy   

v.（军）散开成战斗队形，布置，展开

参考例句：

• The infantry began to deploy at dawn.步兵黎明时开始进入战斗位置。
• The president said he had no intention of deploying ground troops.总统称并不打算部署地面部队。

8 riskiest   

冒险的，危险的( risky的最高级 )

参考例句：

• With markets lately rising, the riskiest investments are finding takers. 他说，在周期高峰时，投资者会追逐风险最高的资产。
• The riskiest subprime securitieshave almost no takers. 风险最高的次级证券几乎没有人持有。

9 eligible   

adj.有条件被选中的；(尤指婚姻等)合适(意)的

参考例句：

• He is an eligible young man.他是一个合格的年轻人。
• Helen married an eligible bachelor.海伦嫁给了一个中意的单身汉。

10 intimidating   

vt.恐吓，威胁( intimidate的现在分词)

参考例句：

• They were accused of intimidating people into voting for them. 他们被控胁迫选民投他们的票。
• This kind of questioning can be very intimidating to children. 这种问话的方式可能让孩子们非常害怕。

11 underlying   

adj.在下面的，含蓄的，潜在的

参考例句：

• The underlying theme of the novel is very serious.小说隐含的主题是十分严肃的。
• This word has its underlying meaning.这个单词有它潜在的含义。

12 premise   

n.前提；v.提论，预述

参考例句：

• Let me premise my argument with a bit of history.让我引述一些史实作为我立论的前提。
• We can deduce a conclusion from the premise.我们可以从这个前提推出结论。