I just saw on the news that some credit card companies are going to start researching their customer's spending habits and adjust their credit depending on what they think is happening in the customer's life. For example, if you spend money at higher-priced stores and then go shopping at a cheaper store they may "decide" you have lost your job and will adjust your credit. They are looking for things like marriage counseling and going to bars too! Does anyone know anything else about this?
Credit card companies looking at people's spending habits is nothing new. It's something that's always been done because they are extending you credit. The best way to avoid this is to not use them and only live within your earnings/means.
but is changing credit limit based on their research new? It was on the news this morning... hmmmm
Shame.... Shame they reduced mine when I moved to BumbleTown
i don't know... I think it is a little insane myself... what if someone was just trying to start saving for the future so started shopping at cheaper shops? idk... this all just seems a little weird.
The credit card companies are being challenged by Bank based Debit Cards which are biting into overall marketshare.
I'm not a fan of big government, but there's a point where some new laws might be in order when it comes to this kind of thing. It's never safe to "decide" what someone "must be doing", based on something like that. The person who just starts shopping at different stores may be saving up for a house or have reasons other than money problems.
Years ago I signed up with a cell phone company, and I always paid the bill on time. After having the account for a long time, I had one month where I talked to a family member who had been discovered to have a serious medical condition and need some very serious surgery. I knew I was running the bill up, but she had nobody else to talk to; and using the house phone would have cost me far more. It was a once-in-a-lifetime thing, and I figured I'd just pay the bill when it came in. Two weeks before the bill even showed up (and with the account never being late) they shut off the service, based on "deciding" that too many calls had been run up. I called them because I "knew" it "must be a mistake". It wasn't. They didn't even give me the chance to get the bill and pay it (or not pay it) before they "decided". Never, in my life, had I heard of anything like this from a company! Chances are it was in their terms of service, but it wasn't worded in a way that would make someone with a paid-up, non-late, account imagine this particular situation. Needless to say, I dumped them.
I couldn't believe it (still can't, and this was - like - 12 years ago). Even if they'd called and said they were concerned, or maybe even asked if I'd pay it up early, that might have at least been sort of reasonable (barely). Instead, I just discovered the service shut off out of the blue! They said they did that because they worried ("decided") that someone was making unauthorized calls on my phone; but when I explained that wasn't the case, they still didn't turn the service on!
Whether it's phone companies, credit card people, or any other business; it should be about nothing but whether the bill gets paid on time and nothing else - no guessing about what's going on, based on activity.
Maybe I've never been in the situation to experience it, but all I've ever known about was companies raising limits based on accounts in good standing and/or requests from customers after a certain amount of time. I've had cards that I didn't put "big spending" on, and the limits were never reduced. Someone may do something like shop at expensive malls if they have a few family members with, say, August birthdays; but then shop for their house stuff at Target or WalMart once the birthday shopping is done.
Of course, the credit reporting agencies aren't much better. If someone had reason to, say, apply for a loan to consolidate all their credit card/other bills in order to get better financing terms (and not re-run them up on the original accounts); credit agencies will consider that kind of move a bad thing in terms of credit rating. Or - the person who applies for a loan for something like getting a car to get to a job that will pay really well gets penalized credit-rating-wise.
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