What Do Your Credit Card Purchases Say About You?

Feb 02, 2015
Behavioral Finance, Question of the Day, Research, Credit Cards, Purchase Decisions, Current Events

Answer:  A lot more than you think.

Watch this 4-minute video from WSJ to learn more


Here is some detail on the research study (from the Verge), which found with could find with eerie precision, who a person is just based on three anonymous credit card purchases:

The authors started with three months of credit card transactions from 1.1 million people, provided by an unnamed bank in an unnamedOECD country (the lead author, Yves-Alexandre de Montjoye of MIT, wouldn’t get more specific). They randomly pulled out a few single purchases for each person, then put the entire set in an anonymized database, removing details like names or bank account numbers. The database only gave prices within a range, since knowing that someone spent exactly $3.21 at Starbucks could give them away almost immediately. And researchers dropped super-high payments — more than $22,000 — for the same reason.

But this proved a minor stumbling block. When the authors mapped locations, dates, and prices of someone’s non-anonymous purchases against the whole database, it was usually easy to find a single, unique pattern. With three points or more, it was virtually a certainty. “You bought a coffee at that coffee shop, and you bought jeans at that shop, and then you bought a pizza,” says de Montjoye, by way of example. There’s a 94 percent chance that you’re the only person who did so.

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.