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Voice--The Credit Card, Not the TV Show

posted by Katie Porter

For years, "product innovation" in financial services made consumer advocates squirm. This was the cover term for the 2/28 teaser ARM, automatic and costly overdraft protection, and direct deposit "payday" style loans. It was a great term because it's hard to be anti-innovation, especially in a world where every day a new app or technology proves useful. A new credit card, called "Voice" from Huntington Bank, is innovating in the credit card space. While the pros and cons of rewards are debatable (Ronald Mann's Charging Ahead has a dated but good discussion of rewards), the marketing and design of the Voice card are intriguing. What do I see?

1) The personification of the bank. It "listens." Consumers can "tell the card" things.

2) Big touted benefit of a one-day late fee. That's a nice consumer perk but perhaps telling about how many late fees are really the result of simple mistake rather than financial hardship. And that's a fact that perhaps should play into what a "reasonable" v. "abusive" late fee is.

3) That consumers presumably will be drawn to this idea of switching up rewards. If people forget to pay on time, are they really going to log on at the start of every quarter to change up and maximize rewards. The card allows consumers to "Earn a point per dollar on all purchases with Voice and pick a triple rewards category. So, you get the flexibility to earn 3x points in the category where you spend most. Go from triple gas points in fall to triple utility points for winter. It’s your choice." Huntington presumably will track whether consumers actually make such choices, and it would a field day for a behavioral economist to study how consumers use such a product.

4) No annual fee, so hey, maybe chasing rewards on cards with high annual fees would do well here. Typically we see high rewards paired with high annual fee (think airline cards). Query how good the rewards perks can be if the bank doesn't have annual fee revenue. Maybe the answer is that Huntington is marketing this card to its retail customers, and it knows enough about their habits to have optimized this product--both in terms of attracting them and being profitable. There's been a lot of talk about personalized medicine, but personalized finance is a reality too.

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