text book marketing managment Jodi Smith has always been very careful with regar
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Question
text book marketing managment
Jodi Smith has always been very careful with regard to how she manages her finances and in particular, has always been very conservative when it comes to using credit cards. Even though Jodi makes a good income, she only has two credit cards, an American Express card and a Visa with no annual fee. She only uses her credit cards occasionally (once or twice every six months) and instead, uses her bank debit card to make purchases when she doesn’t have cash. She always pays off her total balance when she receives a bill in order to avoid interest charges. She selected her Visa card because, in addition to not having an annual fee, the company offered airline miles, warranty protection on some types of services, insurance coverage when she rents an automobile, and other attractive benefits. She has had this Visa card for over four years and considered herself to be a good customer because of her excellent record of always paying her bills on time. However, she recently received a notice from the bank that services her Visa card. The notice informed her that going forward, her account would be charged a $14.95 service fee in any month where she did not either 1) use the card to make at least $250 in purchases, or 2) carry a balance of at least $250. Jodi is very confused by these changes and is upset that the bank is treating her this way when she thought that they valued her business. Based on your reading of the material in Chapter 5 of the textbook, what likely happened to make the company implement these changes and why is the company targeting Jodi with these new fees?
Explanation / Answer
Inspite of no annual fees,in case of credit card there is criteria of making minimum amount purchase everymonth to avail the benefits of credit card.As she was using card occasionally just to confirm that card is working and motive was to avail the benefits by doing this bank of credit is not getting Any benefit. No annual fees is given by card so that person use card more.
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