Credit Cards: Top 10 Spending Habits That Will Get You Noticed

September 9th, 2009 | Author: Chuck Silva

Santa Claus may not be watching you. But the Credit Card companies are.

Credit card companies are profiling you and certain types of purchases can be red flags to the card companies that are looking for signs of consumers with questionable finances.

Not too long ago, the Federal Trade Commission filed a suit against CompuCredit, which marketed the Visa Aspire card. Reilly Dolan was on the FTC’s litigation team. Mr. Dolan says, “Compucredit was reviewing how consumers used the credit card, and it would lower the available credit to consumers based on their transactional history.”

So, what were the things that branded card-users as risky? Going to a bar, a marriage counselor, buyng retread tires, buying products sold via an infomercial…and others.

We’ve listed the top 10, according to Robert Manning, author of “Credit Card Nation,” below.

Traffic tickets: Makes you look reckless. Not to mention that tickets can push up insurance rates, which could put a strain on your finances, which could make it harder for you to pay your bills. Statistically speaking, a lot of people who have charged traffic tickets have defaulted on their cards.

Retread tires: A lot of people buy them because they’re cheap. But if you’ve always bought new and now you start buying retreads it can look like a desperate move. Credit card companies don’t like desperation.

Bargain binges: If you haven’t been using that credit card at the dollar store, you don’t want to start now. Downgrading to lower-cost retailers — or shopping at stores that attract financially pinched shoppers — tells the credit card companies that you’re worried about your finances or about your job. AmEx has been accused of cutting people’s credit because they shopped at Wal-Mart.

Adult Playthings: This ain’t about you — it’s about your purchases. Card companies see porn is seen as escapism and guess what they’re thinking you’re trying to escape from? Fiscal problems. Same for strip clubs. Use cash.

Marriage Counseling and Therapy: Money is at the root of many psychological issues and all kinds of relationship issues. The kind of issues that can lead to divorce. Divorce could destroy your finances, thereby destroying your ability to pay a card company. Needing therapy may also make you look unstable.

Lottery Tickets: Sorry, but lottery tickets don’t count as a sound financial plan and there’s not a card company out there that thinks they do. And, if you’re planning a trip to Vegas — cash.

Cash Advances: Cash Advances used to be a great love of the card companies because of the interest charges. But if you’re tapping your card for cash, now, or using a credit-card check to pay other bills it doesn’t look good.

Personal pampering: If you’re not a spa regular you may want to reconsider charging that visit on your card. The card company may assume you’re trying to relax because you’re worried about money. Or, you stressed out thinking you may lose your job, or you’re prettying yourself up for a job search.

Income Taxes: If you’re robbing Peter to pay Paul, it could be your debts and bills are overwhelming you.

Booze: Tossing that card out there for too many drinks may be a sign of job stress, financial stress, or relationship stress. And charging booze several days in a row will make it seem like your bar binge was not a fluke. Use cash, especially if you’re out for more than one consecutive day.

Source: Marketplace

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