What level is your credit card or frequent flyer status? Bronze? Platinum? Does it matter? I never even stopped to think about this until recently.
Some good friends were teasing me because I have a high tier frequent flyer card but I couldn’t see the joke. It meant I had a reasonable place to wait for flights, that I might not be the first to get bumped off an oversold flight and that occasionally, the staff member at the aircraft door would call me by my name instead of simply being told to take the second aisle.
So I suggested to my friends that their banter was just “card envy” But it stopped me in my tracks and made me think when David said: “well my goal is to have bronze”.
Bronze? His goal? He went on: “If I had bronze instead of platinum, it would mean that I wouldn’t be travelling as much and would be at home with my family more.”
What an insight. He’d certainly sorted out his priorities and made me think about mine.
Pre-approved – for more fees!
This issue of card status and its implications came up for me again when I got an unsolicited letter from the bank telling me I had been pre-approved for a platinum credit card.
Of course, in playing to our egos, what the banks don’t emphasise is that if we take up the higher level card it is accompanied by a higher credit limit, encouraging us to spend more. And if we don’t pay off our credit card accounts each month, the bank achieves its aim in sending out the pre-approval, i.e. to earn more interest.
So I got out all my credit cards and added up how much these cards were costing me in annual fees. The nasty thing about these fees is that unless you keep track of when they are due, the only time you are reminded of them is when they appear on your statement and that’s after they’ve been charged to your account.
Then there are the membership reward scheme fees on top.
So I started to do some analysis about what I really need my cards for. And then comparing that with the level of the card I had. I soon realised that I was paying for more expensive (higher level) cards when I didn’t need them.
What’s more, I didn’t need the extended credit limits and I would have to earn an enormous number of frequent flyer points to justify the difference between the costs of some of the cards. It would be cheaper to shop around for a discount fare!
Status and reward
So why was I hesitating in changing the cards? I began to think that my amygdala (and The Almond Effect – in this case an irrational fear of how it will look to others to have an ‘inferior’ card) was getting in the way of my downgrading from gold and platinum cards so I started to explore why.
It seems that reputation and standing (status) could be more important to our brain than cash. According to one of the authors describing an experiment in a study published in April 2008 in Neuron the part of the brain called: ‘the striatum became just as animated when players were given a shot at improving their social standing as it did when they won a buck…
And that wasn’t the only indicator that they cared about how others perceived them… another brain region (the medial prefrontal cortex) involved in sizing up others went wild when players were shown photos of competitors who outperformed them.
Hmmm. Maybe that’s the explanation for why, when I split the lunch bill with a friend the other day, and I put down a gold credit card and he put down platinum, I momentarily felt, well, of lower status!
And The Almond Effect® also is implicated. The researchers went on to note: ‘brain areas that process emotional pain (the amygdala and posterior cingulate) lit up when players failed to answer questions that inferior competitors had aced. The researchers speculated that this is because they were worried it would diminish their reputations as superior players.
The power of status in rational decision-making
Some of you will also remember the work of Robert Cialdini on Influence. Linking his work and the status theme, the way that status lights up parts of our brains reminds me of the mental heuristics (or shortcuts) that Cialdini talks about. In particular I’m thinking about his research on how we respond to social proof (“keeping up with the Joneses”) and to authority where Cialdini writes that people will tend to obey authority figures, even if they are asked to perform objectionable acts.
Authority and the perceived value of status seem closely connected to me. And this raises the whole question of how we make decisions and what we sub-consciously allow ourselves to be influenced by.
Managing your almonds (and your striatum!)
Coincidentally as I thought about these things, I was revisiting the writings of Viktor Frankl. In particular the latter part of the following quote resonated with me:
“We who lived in concentration camps can remember the men who walked through the huts comforting others, giving away their last piece of bread. They may have been few in number, but they offer sufficient proof that everything can be taken from a man but one thing: the last of the human freedoms—to choose one’s attitude in any given set of circumstances, to choose one’s own way.
“Between stimulus and response, there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.”
Gold, Platinum and the patience to do something about it
As I write this at my desk, I now have three credit cards sitting in front of me. These are the cards that I am going to cancel or downgrade because I simply don’t need them – even though I like their colour!
As we rebuild after the global almond effect (that’s the way I described the global financial crisis in previous CLUES) maybe, as I have done, this is a good time to ask yourself what you really need and whether your ego is costing you? Is it worth it?
And of course, the issue of status and ego goes way beyond credit cards and into the world of work where the ‘status card’ gets dealt endlessly by bosses to employees and by others who like to play with power and politics. Maybe that should be the topic for another CLUES.
In the meantime, I’m struggling with other parts of my brain including the amygdala. The parts that deal with garnering the patience and tolerance I’m going to need when I speak with the banks about changing or cancelling my credit cards.
Maybe that’s the real challenge here, not the potentially high cost of status but the emotional cost that has to be endured when trying to do something about it!