For years, the Internet was a pretty boring place. People interacted with each other one on one via email, and visited corporate websites when they needed to make a purchase or view their accounts. When the concept of social media burst onto the scene, groups of individuals who had a common connection suddenly became empowered to discover each other and interact online.
For the most part, large companies have been trying to leverage social media to communicate with their customers in rudimentary ways. Early examples included creating Facebook pages and Twitter accounts, but a major credit card issuer took some innovative steps to fully integrate the concept of social media into its products in 2012. The Barclaycard Ring MasterCard allows cardholders to collaborate as a community to shape its terms and benefits.
How a Social Credit Card Works
The Ring MasterCard recently ranked as one of the most simple cards on the market. It features an 8% interest rate that applies to purchases, balance transfers and cash advances. There is no annual fee, but there is a $1 cash advance fee and a minimal 1% foreign transaction fee.
Going beyond its simple terms, Barclaycard has created a collaborative online community that allows cardholders to interact with each other and the community managers at Barclaycard. For example, a discussion forum allows cardholders to ask general questions (not specific to their account) about fees, balance transfers and credit-limit increases. Cardholders can also look directly at the profit and loss statistics for the community including the cumulative transaction volume, and percentages of cardholders who are paying their bills on time. Customers can even see how much money Barclaycard is making off of interest payments and fees. Finally, the Ring community can vote on how best utilize a portion of the profits from this product, such as by decreasing fees, increasing rewards or donating more money to charity.
According to Jared Young, the product managers for this card, “All of the trends in the market were pointing towards consumers being more empowered. So we wanted to hand them the keys. Social networking technology has created platforms that make that possible.”
Young added, “But also we wanted to see if giving customers this level of control could actually change their behavior in mutually beneficial ways. If that happened then we had a disruptive concept on our hands.”
Young says Ring cardholders regularly interact online with him and another product specialist, Jennifer, making their goal of a credit card community a success in its first year or so on the market.
Is This Concept Spreading?
Now that the Barclaycard Ring’s social media program has proved successful, Barclaycard is working to expand this concept to its other products. Their next product to become social media enabled is the Barclaycard Arrival travel rewards card.
Barclaycard has created an online travel community where cardholders and even non-cardholders can share travel stories and pictures while exchanging advice and product reviews. Participants earn rewards miles in this program when they create a travel profile, and each time they post stories that receive “kudos” from other community members. Reward miles can then be redeemed for travel expenses or A mazon gift cards.
Other Issuers Dabbling in Social Media Interaction
While Barclaycard has the most advanced social media-enabled product of the major U.S. credit card issuers, others have also created communities around their products. For example, American Express offers its OPEN forum where small business cardholders can network, ask for advice and share insights. However, OPEN forum participants do not have a role in shaping the terms and conditions of the cards they hold.
In addition, Chase has invited many of its Ink for Business cardholders to participate in its Think Tank program, which is part community forum and part market research for Chase. This discussion forum includes a “suggestion box” that allows cardholders to offer their product ideas for Chase to consider. Further, Think Tank participants are rewarded with $5 Amazon gift cards when they complete surveys.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
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