Are Credit Card Companies Using Erroneous Factors to Determine Your Risk?
Does your credit card determine if you’re living a good lifestyle? Do the places you shop indicate your worth as a person? Well, according to your credit card issuer, your self-worth depends on your spending habits.
According to an article published on msn.com, credit card companies are now using information such as where you shop to determine your credit limits and interest rates. So they will look not only how much you spend but what types of merchants you purchased from. Here’s the kicker: according to the article, credit card issuers may identify purchases from casinos, thrift shops, bail bond services, retread shops, and more as higher risk activities.
Wait a minute. Shopping at a thrift shop? Being smart with your money and purchasing gently used clothing at a steep discount is risky? Apparently purchasing from these types of merchants may be an indicator of financial distress and foreshadow missed payments on the credit card. So the credit card issuer now decides if you’re being frugal or foolish based on their standards of what normal should look like, not your standards.
This is one of the most ridiculous things I’ve ever heard. For someone else to evaluate your? lifestyle and punish you for being frugal is absolutely way out of line. I’m amazed at the boldness at which they are trying to influence our lives and tempt us to pay more than we need to. This is yet another reason to stay away from credit cards for good. Don’t fall into their traps. Cut up your cards, pay off your debts and get that filth out of your life forever!
Matt Wegner is a personal finance, career, small business and leadership coach focused on teaching his clients the tools for L.I.F.E. (Living In Financial Excellence). Start enjoying L.I.F.E at www.financialexcellence.net.