Consumer Behavior

Date: January 27, 2011 Course:Business 59, T Th 8-10 analytic thinking:#2- Consumer Behavior Title:How to Stop a Credit Card compensation Increase Source:mainstreet.com Author:Brian OConnell Summary: This customer crime syndicate is one that JPMorgan Chase wants to retain due to their decent deferred compensatement tale and payment performance. However, at their current promotional rates, the crime syndicate is not profitable. Chase is betting that their borrowers are payment-sensitive rather than rate-sensitive and the consumer will accept the higher interest rate in army to maintain the low minimum payment. Public sentiment against this channel will stall changes to be proposed by opposite quotation gameboard companies. Synopsis: This article in mainstreet.com touches upon several debates more or less the credit card industry. First, how do consumers behave when their separate salary structure have been changed? How does their reaction vary when they feel as though they have not adequately notified of such changes? How does this extend to JPMorgan Chases profitability on this pool of cardholders? And finally, what personal effects will a move like this have on the credit card industry that has currently gone with its most drastic changes ever? Analysis/Discussion: First, the consumer.

The borrower holding a credit card with a low foregoing rate typically (i) carries a credit card balance, (ii) shops among cards and balance transfer offers to take advantage of low rates, (iii) tends to pay his/her credit card bills on time to avoid a rate increase, and (iv) has a decent (although not stellar) credit history to be able to qualify for the promo rate. These are consumers that Chase probably does not want to lose. Chases actions could result in two types of adverse consumer reaction. Most borrowers already feel cheated by their credit card company, and this change will just progress to them angrier. Some may just pay off the card with a balance transfer from another company, even if the other card has a higher rate. They... If you want to get a full essay, order it on our website: Orderessay

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