GA man's credit line & score lowered because he shopped at Wal-Mart

[ecstatic]

AKA financial profiling

:wow:

A new policy being used by at least one major credit card company judges a shopper not necessarily by his credit purchases and payments alone, but also by the fiscal behavior of the fellow shoppers in the stores he visits.
Are credit companies profiling shoppers?

And in some cases, the bad repayment history of the guy behind you in line at your local megastore could result in a reduction of your credit line, which, in turn, could lead to a reduction in your credit score -- all because of where you shopped.

...

Johnson says because of his father's lessons, he scrupulously maintained his credit since college. He says he has never had a late payment, rarely carries a balance on his credit cards and has never been over his credit limit. His FICO score -- the standard credit rating used by most lenders to determine credit worthiness -- is a 764 out of 850. A score of more than 740 is considered by most experts to be excellent.

Two years ago Johnson says he jumped at the chance to open a "blue" personal credit card with American Express. He says he considered the card prestigious.

...
Johnson says he discovered a letter from American Express lowering his credit limit from $10,800 to $3,800.

Johnson says his jaw dropped when he read one of the reasons American Express gave for lowering his credit limit: "Other customers who have used their card at establishments where you recently shopped have a poor repayment history with American Express."

http://abcnews.go.com/GMA/GetsAnswers/Story?id=6747461&page=1


Simply amazing...

[Canuckistanian]

1. ANOTHER reason not to shop at Walmart

Not that you need any more.

[Why Syzygy]

2. k/r

Okay. Since the banking bailout fiasco started, I have hollered a couple of times about credit reporting. The whole system needs to be redone. Clearly, the big thieves can finance trash *assets* while hard working people are penalized for every little thing.

[Boojatta]

11. "penalized for every little thing"

You can call it a little thing, but I call it nothing.

Anyway, this might explain why Rain Man (played by Dustin Hoffman) wanted his underwear to be purchased at a particular Kmart store. People who shopped at that particular store might have had a good repayment history with American Express.

[customerserviceguy]

3. Amex has been known for doing this

for at least a couple of months now. I have a card with them, but only to get Hilton Honors points, which I use on my trips back to the Pacific Northwest. Since I read that, I've been damned careful where I use it.

There's supposed to be a law taking effect in awhile that will prevent abuses like this. Can't get here soon enough!

[JeanGrey]

15. We have American Express and they have never lowered

our limit. And we shop at Wal Mart all the time.

[ecstatic]

26. Maybe there's also an element of zip code profiling mixed in

with their shopping-profiling policies.

[JeanGrey]

44. I doubt this entire story, frankly.

[alittlelark]

31. I've had an Amex blue for many years.

....But I never shop at Wal-Mart or Home Depot, I never eat at the Olive Garden or Chilis.

I wonder if the 'green' or 'buy American' aspects are part of the equation?

[NutmegYankee]

4. Is it Fascism yet? n/t

[aquamarina]

5. I got the very same letter. Then about two months later I got

another letter from AmX apologizing for including this reason as one of the factors they used to lower my credit limit. However, what they are systematically doing is, as I pay down my credit card balance they are lowering my available credit line to just a few hundred dollars over my current balance. And like the person mentioned above, I've never been late and except for the last two years, have never carried a balance.

[ecstatic]

8. I'm glad I never bothered to get AmEx

That's really f*cked up!

[Lorien]

35. The green AmEx cards are nothing like the blue cards

you don't carry a balance on them, so there is no limit. As a self employed person my AmEx is indispensable; I get an itemized report at the end of every year detailing my purchases, which makes tax time much, much easier. Plus there's the frequent flyer miles.

[onager]

39. My AMEX is indispensable and mandatory.

Our company requires employees who travel to use the AmEx Corporate Card (green). Of course, that makes us personally liable for the charges. And if the company is slow on reimbursement for airline tickets or whatever, we have to pay up front using our own money. Otherwise we get our credit rating dinged by AmEx.

I've been based in Egypt for 3.5 years now, so I haven't really needed that..."service." In my situation, the company pays me a flat rate for an airline ticket and I book it myself. I use a travel agent in Cairo (a nice woman from New Jersey) who always gets lower ticket prices than the company or AmEx.

One caveat to the "don't carry a balance:" AmEx has, or used to have, something called "Optima," which generously allowed you to transfer an AmEx card balance to a credit account.

When I was dumber and (slightly) younger, I fell for that one. The Optima terms worked just like a credit card, with high interest rates and all the usual bait-and-switch nonsense: changing payment due dates, jacking up interest even higher for the slightest error, etc. etc.

I paid that off ASAP and never used it again. I have an AmEx gold but it gets paid off every month, without fail.

[Skittles]

6. and if you eat at greasy spoons they'll use that against ya too

bastards

[SoCalDem]

7. Look for Hotdog stands to change their name to Caviar Catering

:)

[damntexdem]

9. In general, a disgusting practice by AmEx.

But I'm glad they target WalMart.

[Chulanowa]

34. They're not targeting Wal-Mart

They're targeting wal-mart shoppers. They're stating that these people are credit risks because they go shopping somewhere. It's fucked-up beyond my comprehension.

[Boojatta]

10. Does American Express provide a complete list of establishments

where their customers aren't supposed to shop? If American Express doesn't make that information available, then maybe they should change the application process to test for ESP. Applicants who don't have ESP won't be approved for credit cards and then they won't have to worry about weird policies.

[liberalhistorian]

12. I've heard that some cc companies are also

pulling this shit based on what you use the card for. For instance, if you use your cc to pay for marriage counseling, or any kind of counseling or treatment, or car repair (especially things like tire retreading), or for groceries, or anything not luxury or considered unnecessary, then it's considered a sign that you may be either already experiencing personal/financial difficulties, or are on your way there. Complete and utter bullshit, just like this policy. Looks like they're just thinking up more and more excuses to squeeze people even further and get more and more stupid fees and charges.

At this point, restaurants, hotels, airplane tickets, luxuries and travel-related stuff are really the only safe things to charge without some stupid fucking goddamn profiling penalty of some kind. Absolutely crazy. And who the hell made FICO the God of our lives, which it's now become? Whoever is afraid of government needs to be afraid of private industries a lot more, which is what FICO, the cc companies and the damned creditors-in-their-pocket credit bureaus are.

[ecstatic]

14. Amazing. They are shooting themselves in the foot! nt

[Why Syzygy]

16. That's what I'm saying.

Lord and Master. It really needs to be changed.

[customerserviceguy]

32. Well, auto insurance companies have made FICO into god

you will get dinged extra for it, regardless of how safe a driver you are. But, this is the insurance business, that is allowed to discriminate freely based on age, marital status, and gender.

[Tesha]

43. You need a better Credit Card provider.

May I suggest your friendly neighborhood Credit Union?

Mr. Tesha's Visa Gold comes from there and even though we've
bought groceries and car tires and car repairs and car tire repairs
on his card for years and years, over the years, they're raised his
available credit line higher and higher to the point where either
of our two recent cars could have been bought simply by saying
"charge it!". And even though he almost never runs a balance
from month-to-month, they still seem to like him!

Of course, a Credit Union is owned by its members, not by some
bunch of Wall Street billionaires, so the union tends to take good
care of its members.

Tesha

[muntrv]

13. Gee AMEX! At least give us a list of stores you consider good and stores

you consider "trailer trash!"

[dixiegrrrrl]

17. It is PAST time to use pre-paid credit cards and cash.

A huge part of Bush spying was to make it easier for corpocracy to profile us.

Look up choicepoint when you have a few minutes.

[DRoseDARs]

18. Newcreditrules.com has a partial, potential listing of stores. Brace yourselves...

These are stores this Johnson guy shopped at between Dec.06 and Jan.09 on his AmEx card.

http://www.newcreditrules.com/
http://www.newcreditrules.com/newcreditrulescom/2009/01/beware-these-stores-could-harm-your-credit-part-ii-.html

Possible Bad Establishments

Air Jamaica
Amazon.com <<<-Really?!
Applebee's (Gastonia, NC)
BP (Ashland, VA)
BP (Owner Aziz Dhanani)
Boston Market (Boston, MA)
Brinks Home Security
Cactus Car Wash
Chateau Elan Winery
Cheesecake Factory (Cambridge, MA)
Chick-Fil-A
Chicago's Nancy Pizza
Citgo (Baltimore, MD)
Citgo (Greater American Food Atlanta)
Dave & Busters
D & K Clothing
Donor Town Square
Ed Voyles Honda
ESPN Zone
Exxon Mobile <<<-I'm sorry, but BWAHAHAHA!!!
Figo
Five Guys
Fogo De Brazil
Geisha House
Hershey Park (Hershey, PA)

Island Romance
K & G Men's Store
Kyles Friendly (Greensboro, NC)
Leadership Atlanta
LeBlanc Plumbing
Mahogany Restaurant (Washington, D.C.)
McDonald's <<<-REALLY!?!? And where the fuck, pray tell, are the extremely tight-budgeted supposed to eat?
Moe's Southwest Grill
Opera
Paschal's Restaurant
Quick Trip
Quizno's
Red Robin
Ruby Tuesday
Satellite Radio XM Sirius
ServPro
Sheetz (Boston, MA)
Sonsie Restaurant (Boston, MA)
Spirit Airlines
Starbucks <<<-Even the yuppies!
Swept Away Couples Resorts
United States Post Office <<<-REALLY!?!?!?!?!?!?!
Walmart <<<-That's gonna anger a lot of people.
Zales <<<-THIS one makes sense.

* Establishments are based in the Atlanta, Georgia area unless otherwise indicated. National or international companies are not marked.

[jmowreader]

19. I think I see where they're coming from...

This guy has eight fast-food joints on his bill...their impression of him is, "he doesn't have any money, he charges everything he buys no matter how small it is."

I know people who charge everything they buy, and pay their bill off in full at the end of the month, because the bill is this nice neat itemized list of everything you spent money on over the last billing cycle. Maybe this guy is one of those people.

[MrScorpio]

20. CC companies hate people who pay off their balances each month

I think the term that they use for folks like that is "Deadbeats"

[Raineyb]

38. You are correct. CC companies prefer people who can't pay their

bills and people who carry balances from month to month so they can get you with the usurious interest and the outrageous fees.

I believe PBS still has The Secret History of the Credit Card on their website somewhere. It is an eyeopener about how the CC companies work.

Regards

[DRoseDARs]

22. From Johnson's company's About Us page:

http://www.johnsonmedia.com/aboutus.php
Kevin D. Johnson, founder and president of Johnson Media, has over eight years of experience leading his company as a successful marketing and communications company that serves many of the most notable Fortune 100 businesses today.



Hardly strikes me as cash-poor, rather just frugal.

[ecstatic]

24. I think he was trying to take advantage of their so called incentives

At the end of the day, he lost way more than he gained from it. I wonder if Discover has the same policies?

[renate]

41. why not charge fast food?

Having cash on hand is, well, handy. If McDonald's is going to base their prices on credit cards (and, presumably, therefore roll the credit card fees they pay into the cost of the food they sell), why not let them absorb the cost of using a card so we can keep cash in our wallets for the places that don't take cards?

Admittedly, this only works well for people who pay off their cards every month, just like you said.

[ecstatic]

23. Wow. I didn't even go to his site

and I've done business with a lot of the people on his list! But I use my check card. Looks like the rewards programs aren't really worth it in the long run.

[Raineyb]

36. Air Jamaica?

Sounds more than a bit discriminatory. I've traveled Air Jamaica numerous times as it's the only airline that will fly you straight to Jamaica without a stop over in Miami (which btw is the shittiest airport I've ever had the misfortune of stepping foot in.) Air Jamaica might be late but they don't play when it comes to airline safety. If the pilot decides something needs to be fixed before take off it gets done. Oddly enough, I don't see too many white people on the flights. (Of course it could be because I fly in through Kingston rather than Montego Bay so who knows.)

Regards

[MadHound]

21. Wake up people, time to go to a cash basis,

And screw the CC companies.

I've never had a credit card, and my credit ranks right up there in the excellent range. It's also been better for my budget and my life in general. Cut up your cards and tell these companies to shove it.

[ecstatic]

25. I wish I could but you just never know when an emergency might strike

I just so happen to have about 15k in available credit. :wow: It seems obscene but I don't want to voluntarily let go of it...just in case... Although, I'm sure if the bottom falls out of this economy, they will shut me down anyway.

[TooRaLoo]

27. That is vile. nt

[KamaAina]

28. Buy the new AC/DC album, trash your credit rating

it's only available at one place, and that place is also known as "Sprawl-Mart".

I suppose he could keep a Visa or MC around just for times when he goes "slumming" :sarcasm: , but why would he have to? :wtf:

[Alcibiades]

29. I think they are out of money

A couple of replies have indicated similarly arbitrary reasons for lowering credit lines. The story below claims credit card companies are going to tighten credit by $2 trillion. How do they do that? Bullshit and arbitrary withdrawals of credit lines is one way.

Could it be that, much like Wall Street and other financial entities, they don't think they have enough cash on hand to weather the storm? If they expect the recently jobless to borrow more money they may not be able to repay later, maybe they will target areas of high job loss for tightening to minimize their losses. It's what I'd expect from them.

http://www.csnews.com/csn/news/article_display.jsp?vnu_content_id=1003918283

[kiranon]

30. If most everyone turns to cash instead of credit a lot of income won't be reported

and a lot of sales tax won't be collected. The credit card companies are just putting more grease on the skids for the economy and themselves if they cut off credit.

[tcfrogs]

33. This has to be a recent development

My ex was incredibly frugal, and shopped with our credit cards at discount stores all the time. Not Wal-Mart very often, but other low cost stores. It certainly didn't damage our credit ratings at the time.

I am almost speechless at this turn of developments.

[BlooInBloo]

37. (shrug) If you don't like what AmEx is selling you, then don't buy it.

[Sanctified]

40. It's not his money, if he does not like it don't use the card. n/t

[ecstatic]

42. I'm sure he wouldn't have used the card had he known about the policy

before signing up. :shrug: