Credit Card Companies Persecute Based on Where You Shop
I am pissed. And you will be too when you hear this. Instead of just lowering your credit score when you are late, they are lowering your score when you shop at places (with fine credit, mind you) at places where others shop that may have bad credit. So you will be standing in line with your credit card, getting ready to pay for a usual item, and the person behind is ready to do the same and simply because their score is lower, yours is lowered as well.
Is that fair? Can they really do that? What? WTF? Really? Whats going to happen now? Are stores going to advterise that they only accept business with a certain credit score? They might have to if you value your credit score.
Ok, maybe thats stretching a bit too far, but honestly, it just seems a bit extreme to judge a person’s ability to payback simply based on anothers ability. Another person that you don’t even know. Man, I cannot wait to see what Congress has to say about this…
The credit card companies say that this “behavioral analysis” is simply a new tool to limit their exposure to credit fraud.
Tool indeed.
I guess the rules really are changing over all. Data mining is easier then ever, and every purchase we make might set off another slew of aggressive and unfair analytics. But they changed the rules without telling anyone. In this turbulent time of economic strife, where there is zero consumer confidence, they put a knife in our back. Nice.
Happily, there is a little something being done about it. In 2008, regulators and lawmakers filed a suit against Compucredit for not disclosing this new practice. It was settled last December to the tune of $114 million where the money went back to the credits of consumers. American Express who has been shown to have also participated this as well, had the following to say:
Our intent is to strike the right balance between accommodating our card members’ spending needs and, at the same time, prudently managing credit risk. While we may use additional data points, the driving factor for any credit limit reduction is the customer’s debt level.”
Its not enough they charge incredible interest rates, but to alter the rules, and then not have any transparency about it…pisses me off. $
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Comments
Use cash whenever possible, and this won’t be an issue. This is lower than the insurance companies basing premiums on your credit score and not just your driving record. Sneaky dogs.
I agree with Sam’s “secret”. Don’t carry a balance and it’s all a non-issue!
If you are shopping at a major department store then you must be at risk. The only answer I can see is not to use credit. How would we find out what stores are on the list?
[...] Thursday January 29th: MilkYourMoney.com how credit card companies are shameless – so cut up that card! [...]
To be honest, I don’t see a reason to NOT use a credit card when you purchase anything. Why wouldn’t you want cashback on everything you purchase?
This practice, if used, is used to alter your credit limit, which has an bad effect on your credit rating. It’s pretty pathetic and I don’t anticipate it continuing. Especially considering credit card legislation will likely pass during the 111th Congress.
An excellent question…of course a closely guarded question that I can’t imagine that they would really want to advertise that they are doing this. Slimy if you ask me. What should we do, simply use cash all the time? Ugh. Congress is looking into it though and there have been lawsuits filed at least. Thats the only thing that seems to speak these peoples language.
I believe what is best is just to stop using your credit cards. If you stop using your credit cards, you’re more likely to save yourself from acquiring credit card debt. But I avoid credit cards, is it possible to still get a mortgage? Does anyone know?
I got a secret that no one seems to know about: If you don’t carry a balance, it really doesn’t matter what rate they charge you, you don’t have to pay interest!
It is really sneaky, but they are allowed to do it. It’s their money, they can do what they want with it. It’s their game, if you borrow you have to play. Your best bet is avoiding it if at all possible (which sometimes can be hard).