The Truth About Junk Mail

Ever wonder how it is that you receive so many offers in the mail?  If your daily pile of mail looks anything like ours, it is likely crowded with offers for credit cards, home loan refinancing, reduced car insurance premiums, etc.  The good news is, you can prevent this junk mail from ever reaching your mailbox – or at least the majority of it.

Credit card companies are known for purchasing consumer information from the credit reporting agencies: Experian, Equifax, and Transunion.  Here is how it goes down.

Junk Mailers

First, the credit card companies decide they are going to do a large direct mail campaign, which vary in the type of consumers they target.  So they contact the credit reporting agencies requesting names and mailing addresses of consumers fitting a particular profile.  Advertisers understand how to get to their target audience.  Ever notice all the Ford F-150 and beer commercials while watching football on Sundays?

Capital One

Capital One is not afraid to spend money on advertising. Evidenced by them being willing to pay for “A-List” celebrities to do TV commercials: Alec Baldwin and Samuel L. Jackson, for example.  They also are not afraid to drop big money on direct mail to target their audience.

What does this mean? They will spend millions to study the financial behaviors of consumers. They then determine which consumer information to purchase. In this case, they target consumers that have between a 600 and 640 credit score. Why do they choose this range?  Their research shows that these consumers are most likely to max out their credit cards and make minimum payments for the rest of their lives – perhaps at 30% interest!  Typically 600-640 consumers will pay their bills on time, but are liberal with their spending habits. Jackpot.

American Express

On the other hand, American Express will usually only purchase lists that have 700+ credit scores.  This is because they are offering mainly “charge” cards as opposed to credit cards.  Charge cards rarely have a preset limit and are typically paid off in full each month. As opposed to credit cards, which have the option of carrying a balance into the next billing cycle and paying interest. They choose to target higher credit score, lower risk consumers as this best suits their business model. They make the majority of their money off of the annual fees they charge their users, not on interest.

Experian, Equifax, and Transunion are getting rich selling your information to anyone with a checkbook and a product or service to sell.  As a result, your mailbox is being stuffed full of junk mail and countless hours are being spent feeding your shredder.

Concluding Remarks

Is there a way to stop being targeted?  Yes!  Go to OptOutPreScreen.com.  This will put you on the “Do-Not-Sell-List.” So when the credit card company (or insurance company, etc) requests a list of consumers falling into a range of behaviors or scores, you won’t show up on it.  Credit card companies and other advertisers are finding ways around the opt-out list, but OptOutPreScreen.com will at the very least significantly reduce the amount offers finding your mailbox.