Debt Free

So, Bank of America is offering credit cards now to bank customers without social security numbers. It would be nice if they were doing this in an effort to combat identity theft. However, it looks like an effort to harvest some overripe credit card business from the portion of our economy that's in the country illegally. It could a great business move for BofA. After all, who are the illegals going to complain to if they're charged outrageous fees or out of sight interest rates? They can always take their business somewhere else.

Oh, wait! They can't. At this time, other banks require a social security number in order to get some plastic satisfaction. Obviously that will change in a heartbeat if other lenders and financial services firms see that BofA does well with this little venture. Will they allow just anyone to walk into a bank branch, and open an account without giving an SSN? Who knows? If they will, you can just open a new checking account without an associated SSN. The next step is to avoid boingoing a check for 90 days. That seems like a fairly lenient requirement for giving a credit card to someone whom you should suspect has a reasonable probability of being a lawbreaker. That makes me suspicious that the interest rates associated with these new credit cards will be, shall we say, extreme.

They may try the strategy pioneered by such credit card issuers as Capital One as well. Give out a card with a very low credit limit, say $1,000. When the creditor reaches the limit, rather than simply raise it, a new card is issued. This make sit much easier for the bank to generate a nice revenue stream of fees. After all, they can charge twice the total fees for two $1,000 limit cards as they do for a single, $2,000 card. As the initial provider of credit cards to the under-the-radar market they'll achieve great market penetration and build a substantial customer base, even if competition arrives fairly soon. You know that's just what the execs at BofA are counting on.