Credit card with incentives tied to credit score

• US 20060031158A1
• Filed: 08/09/2004
• Published: 02/09/2006
• Est. Priority Date: 08/09/2004
• Status: Abandoned Application

• Current Assignee: Suze Orman Media, Inc.
• Original Assignee: Suze Orman Media, Inc.
• Inventors: Orman, Suze
• Application Number:
  US10/914,609
• Publication Number:
  US 20060031158A1
• Time in Patent Office: Days
• US Class Current: 705/38
• CPC Class Codes: G06Q 20/24 Credit schemes, i.e. "pay after"
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof

Abstract

A credit product issuer markets a credit product to a targeted group of consumers offering incentives to the targeted group if the consumers improves their management of their financial affairs, e.g., reduces a credit score. A consumer receives an application for the credit card and submits the credit card application to the issuer. The credit card issuer accepts the application for the credit card from the consumer and establishes a consumer account and an initial interest rate. The initial interest rate is based on an initial credit score for the consumer and other consumer credit information. The credit card issuer activates the consumer account. The credit score of the consumer is automatically monitored on a periodic basis and the initial interest rate is adjusted to a new interest rate if the credit score of the consumer has changed.

Claims

1. A method of determining an interest rate for a credit card issued by a credit card issuer, comprising:

receiving an application for the credit card;

accepting, by the credit card issuer, the application for the credit card;

establishing a consumer account and an initial interest rate based on an initial credit score for a consumer and other consumer credit information;

activating the consumer account;

automatically monitoring a credit score of the consumer on a periodic basis; and

adjusting the initial interest rate to a new interest rate if the credit score of the consumer has changed.

2. The method of claim 1, wherein the new interest rate is lower than the initial interest rate if the credit score has increased.

3. The method of claim 1, wherein the credit card issuer accepting the application for the credit card includes contacting an independent third party to receive credit information regarding the consumer and the credit information includes the credit score.

26. The method of claim 1, further including,

a consumer paying late an amount of the consumer account;

and

deactivating the consumer account for a specified period of time in response to the consumer paying late.

27. The method of claim 1, further including,

a consumer exceeding a credit limit on the consumer account;

and

deactivating the consumer account for a specified period of time in response to the consumer exceeding the credit limit.

4. A method of rewarding a consumer for increasing a credit score, comprising:

receiving an application for a credit card;

accepting, by a credit card issuer, the application for the credit card;

establishing a consumer account and an initial interest rate based on an initial credit score and other consumer credit information;

activating the consumer account,

automatically monitoring a credit score of the consumer on a periodic basis; and

paying down an account balance of the consumer account by a predetermined amount if the credit score has increased by a pre-determined amount.

5. The method of claim 4, wherein the credit card issuer accepting the application for the credit instrument includes contacting an independent third party to receive credit information regarding the consumer and the credit information including the credit score.

6. The method of claim 4, further including lowering the initial interest rate of the credit card to a new interest rate if the credit score of the consumer has increased.

7. A method of rewarding a consumer for increasing a credit score, comprising:

receiving an application for a credit instrument;

accepting the application, by the credit instrument issuer, for the credit instrument;

establishing a consumer account and an initial interest rate based for the credit instrument based on an initial credit score and other consumer credit information;

activating the consumer account;

automatically monitoring the credit score of the user on a periodic basis; and

paying off an established percentage of a consumer'"'"'s outstanding balance on the consumer account if a specified credit score point increase is achieved.

8. The method of claim 7, further including lowering the initial interest rate of the instrument to a new interest rate if the specified credit score point increase is achieved.

9. The method of claim 7, wherein the credit instrument issuer accepting the application for the credit instrument includes contacting an independent third party to receive credit information regarding the consumer and the credit information including the credit score.

24. The method of claim 7, wherein a third party pays off the percentage of the consumer'"'"'s credit card account balance in exchange for the credit card issuer allowing access to the credit car issuer'"'"'s customers.

10. A method of rewarding a consumer for increasing a credit score, comprising:

receiving an application for a credit card;

accepting the application for the credit card, by the credit card issuer;

establishing a consumer account and an initial interest rate based on an initial credit score and other consumer credit information, the consumer account including tracking of reward points related to charges made utilizing the credit card;

activating the consumer account;

monitoring the credit score of the consumer on a periodic basis; and

providing a certain amount of reward points to the consumer to be added to existing reward points in the consumer account if the credit score of the consumer has increased by a predetermined amount.

11. The method of claim 10, further including paying off a portion of an account balance of the consumer account if the credit score of the consumer has increased by a second predetermined amount.

12. The method of claim 10, further including paying off a percentage of an account balance of the consumer if the credit score of the consumer has increased by a second predetermined amount.

13. The method of claim 10, further including reducing the initial interest rate for the consumer account to a lower interest rate if the credit score of the consumer has increased by a second predetermined amount.

25. The method of claim 10, wherein a third party provides the reward points to the consumer in exchange for the credit card issuer allowing access to the credit card issuer'"'"'s customers.

14. A method, comprising:

receiving an application for a secured credit card;

accepting the application, by the credit card issuer, for the secured credit card;

establishing a consumer account and an initial interest rate for the secured credit card based on an initial credit score and other consumer credit information;

activating the consumer account;

automatically monitoring a credit score of the consumer on a periodic basis; and

converting the secured credit card to an unsecured credit card if the credit score has been increase by a predetermined threshold.

15. The method of claim 14, further including the credit card issuer receiving collateral from the consumer before activating the consumer account for the secured credit card.

16. The method of claim 15, further including the credit card issuer returning the collateral to the consumer if the secured credit card has been converted into the unsecured credit card.

17. The method of claim 14, further including paying off a portion of an account balance of the consumer account if the credit score of the consumer has increased by a second predetermined threshold.

18. The method of claim 14, further including paying off a percentage of an account balance of the consumer if the credit score of the consumer has increased by a second predetermined threshold.

19. The method of claim 14, wherein the converting of the secured credit card to an unsecured credit card, if the credit score has been increased by a predetermined threshold, occurs if the increase in the credit score is maintained for a specified time period.

20. The method of claim 14, further including reducing the initial interest rate for the consumer account to a lower interest rate if the credit score of the consumer has increased by a second predetermined threshold.

21. A method of determining an interest rate for a credit card issued by a credit card issuer, comprising:

marketing a credit card with incentives for improving a credit score to targeted consumers;

receiving an application for the credit card by one of the plurality of targeted consumers and submitting a completed application to the credit card issuer;

accepting, by the credit card issuer, the application for the credit card;

establishing a consumer account and an initial interest rate based on an initial FICO score for a consumer and other consumer credit information;

activating the consumer account;

automatically monitoring the credit score of the consumer on a periodic basis; and

adjusting the initial interest rate to a new interest rate if the credit score of the consumer has changed.

22. The method of claim 21, wherein the new interest rate is lower than the initial interest rate if the credit score has increased.

23. The method of claim 21, wherein the credit card issuer accepting the application for the credit card includes contacting an independent third party to receive credit information regarding the consumer and the credit information includes the credit score.