Credit Card Come-Ons Ring Hollow, Critics Charge Issuers Court Consumers With Premium Cards, Then Offer Lesser Versions

Credit card issuers are promising platinum but dispensing lead, critics charged Thursday.

In response to rising late payments and record bankruptcies, credit card issuers have become choosier about who gets their premium cards. The cards are in demand not only because of their high credit limits but also because of such benefits as free auto rental insurance, round-the-clock customer help services and offers of frequent flyer miles.

The companies say they have developed sophisticated scoring techniques designed to weed out prospects who are likely to default.

Their mail solicitations don’t necessarily reflect that. Issuers are flooding consumers’ mailboxes with lavish, embossed brochures touting high-quality cards. They are sending them even to people who, their own research shows, would never qualify for a premium card, these critics say.

“Issuers are deliberately using the platinum issue as a come-on, knowing that the recipient will not qualify,” said Richard G. Barlow, president of Frequency Marketing Inc., a credit-card consulting firm in Milford, Ohio.

The hope is that the potential cardholder will respond to the pitch. They’ll be turned down for a platinum card, but instead sent a card that has a lower credit limit and fewer features.

Issuers defend the practice, saying they do their best to send applications only to people likely to qualify for the premium cards.

The mailings carry a fine-print warning that the recipient may not qualify for the card that is being advertised.

“The solicitations do not promise you that top credit limit, in the print you can see or the print you can’t see,” said Lisa Holton, editor of Card Marketing Magazine. “Legally, they’re covered.”

But, Holton said, consumers “may see a platinum card with a $25,000 (credit limit) advertised, but in most cases people are getting between $3,000 to $5,000 as a maximum.”

Credit card issuers wouldn’t discuss their mailing response rate or say what percentage of people who respond to the ads actually get a premium credit card or any card. But they disputed the notion that they are sending pitches to people who don’t qualify.

“We go out and determine who we think would qualify for the platinum,” said Maria Mendler, a spokeswoman for Citibank, the nation’s largest credit card issuer. “Otherwise, you’ve wasted mailing and materials costs.”