PurposeThe authors offer a new approach to segment credit card customers by classifying customers into two unobserved (latent) segments: opportunistic and needy.Design/methodology/approachThe authors develop a finite mixture model to estimate customers’ tendency to borrow using the three alternatives available to them—promotional cash advances, regular cash advances and retail balances.FindingsThe results support the presence of at least two segments among credit card customers. The authors find that relative to opportunistic individuals, needy customers are typically more sensitive to interest rates. Additionally, the results indicate that offering promotional cash advances to current credit card customers increases their sensitivity to regular interest rates. Furthermore, the findings indicate that needy customers tend to have a higher stickiness in their debt. In the post-estimation analyses, the authors observe that needy customers generate more revenue than opportunistic customers. Interestingly, the bank does not perform well in targeting needy individuals and targets both groups with the same probability.Originality/valueThe authors argue that teaser rates attract at least two segments of borrowers—the “needy” segment, which is more likely to be cash-strapped, and the “opportunistic” segment, which looks at these teaser rates as an opportunity. However, banks do not observe segment membership. Hence, the authors offer a new approach to identifying these segments and show that understanding the behavior of these latent segments could help a bank target profitable customers more effectively.