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Credit Card Applications » News » Other » Author Says Credit Card Companies are Watching

Author Says Credit Card Companies are Watching

July 26, 2009
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Robert Manning, author of "Credit Card Nation", says that banks and card companies are keeping an eye on cardholders and what they're buying. According to Manning, card issuers are paying close attention to the spending habits of many Americans. Increasing defaults and rising charge-off rates are forcing many banks to be even stricter with consumers.

The worsening economy is also making hard for many Americans to pay off credit card debts. Because of this, banks and card companies are looking for ways to slash credit limits or even take cards away from consumers, Manning says.

Experts add that cardholders should be aware of what they buy with plastic and how they buy them. For instance, many card companies consider some products and services as forms of escapism. Most banks and card issuers actually have special departments that handle and analyze their clients' purchases. Specialists often try to figure out what consumers buy the most when faced with financial problems.

To avoid losing their credit cards, consumers are advised to avoid paying for some items with plastic. Paying with cash is always the safest way to prevent card companies from becoming suspicious.

Most card companies look for signs of stress and impending financial problems even before they happen. They can do this by poring over the purchases of their cardholders. Experts say that cardholders should avoid paying for alcohol using their cards. Banks often consider drinking as a sign of depression or frustration over personal problems or even financial distress.

Even simple pleasures like massages and spas should be paid for in cash. Charging them to plastic can send the wrong signal to card companies. Massages can be misinterpreted as de-stressing activities. Stress could indicate financial problems and a higher possibility that cardholders will fail to pay on time or worse, default on their credit card debts.

Manning and other industry experts say that the process of collecting and analyzing data based on the consumers' spending habits and behaviors is called data profiling. Large corporation also use data profiling to maximize sales. Manufacturers actually pay supermarkets to place their products at eye-level. Researchers also conduct regular studies to discover the preferences of many consumers.

The same also goes for the credit industry, experts say. In fact, data profiling is now a $25 billion business. The latest figure is a 50 percent increase over data profiling amounts last year.

Experts contend that to avoid being tagged by card companies as high-risk cardholders, consumers should pay for alcohol, massages, and similar products and services with cash.

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  • Larry
    With the Virgin / Barclaycard signature offer, there seems to be some consumer deception or maybe even outright fraud goin on.   I decided to jump on this offer..  read all the info on it..  was approved for their platinum card, paid the fee, then was only awarded 10,000 points instead of the advertised 20,000.   When i inquired about the less than advertised bonus points, Barclaycard claims only Signiture Visa cardmembers get the 20,000..  as a platinum cardholder, you don't qualify for that level of bonus, so you get 10k instead.   Well, in their current ongoing promotions, it states plain as day that....    Applicants approved for the Visa Signature or Platinum Card with $49 annual fee will receive 20,000 Bonus Points awarded to your Virgin America Rewards Account at the close of the first billing statement in which you make your first purchase or balance transfer (that is not returned or rescinded) and have paid the Annual Fee on the account (and such fee is not rescinded). They don't mention anything about a separate program for platinum cardholders..  However, trying to get someone to resolve this issue with either Virgin or Barclaycard seems to be rather impossible.. Seems to me they're simply drawing people in with the fraudulent offer, then simply saying, oh, we're sorry you don't qualify..  but thanks for signing up for our garbage credit card with insane fees..   
  • CreditLandCom
    Thank you for sharing your experience with us. We have reviewed this offer and you are correct, nowhere it is mentioned that 20,000 Bonus can become a 10,000 Bonus all of a sudden... We will mention this in our review of this card so others can make an informed decision. Another way to get Virgin miles is to get an American Express charge card: The Business Gold Rewards Card® now offers 50,000 Miles, though you do have to spend $5,000 in the first three months of card membership to get it. It also has $0 introductory annual fee for the first year, then $175. http://www.credit-land.com/details/the-business-gold-rewards-card-from-american-express-open.php Premier Rewards Gold Card now offers 25,000 Miles, though you do have to spend $2,000 during your first three months of Card membership. It also has annual fee of $0 for the first year, then $175. http://www.credit-land.com/details/american-express-premier-rewards-gold-card.php While we do not know If any of these offers make sense to you, we are at least sure that you will get advertised bonus in full if you decide to get them... Conversion rates for Virgin America are: 100 Elevate Points = 200 Membership Rewards® Points All the best.
  • Deborah Ellsworth
     would very much like to start a new credit history  by making payments on time I would tohave a credit card that is NOT PREPAYID! I don't need a card with a high limit just something to start a new credit history. Thank You Deborah Ellsworth
  • Deborah Ellsworth
    I would very much like to start a new credit line to get back on track. I DO NOT WANT A PREPAID CARD!! This new credit card if I am approved does not have to hace a high limit just something for me to start over again and prove myself ThankYou. D Ellsworth
  • Miss Edna
    there is a huge problem with the RFIP chip: it is easily compromised. There are already 'readers' in the form of what looks like a cellphone in a case, that scans all the info in the chip by merely walking near a person -- this 'reader' penetrates leather, cloth, spandex, etc. The only thing it will NOT penetrate is METAL. Perhaps one has seen commercials touting metal credit card cases. Here is my hint for a free fix: cut a piece of aluminum foil or use the foil that is used to keep foods fresh, like coffee. Cut it so that when folded once, it forms a sleeve for your credit card. place the credit card in the sleeve, then place the sleeve in your wallet.
  • Robin Parks
    I am looking to apply for the AARP Visa signature card from Chase that offers $100 after spend $500 in first 3 months, no annual fee and 0% interest first year; I don't want to mail in offer because of having to write in Social security #. Can you direct me to the proper on-line site?
  • CreditLandCom
    The Chase bank cards are not currently available at Credit-Land.com, but you can consider applying for the Citi® Dividend Platinum Select® Visa® Card - $100 Cash Back. The cards has similar terms and cash back program.
  • Becky
    This is Becky Now what do I do just waqit for acard to come to me?
  • CreditLandCom
    Once you have applied, you should receive a letter within 10 business days letting you know if you were approved and when your card will arrive. If you did not receive any letter or notification from the issuer, you should contact them directly. Also, you should contact the issuer if you’ve been waiting for your credit card longer than 30 days. Since we are not a bank and don’t issue credit cards, we cannot give you any information about your application or credit card.
  • SavingStar
    Thank you for posting about SavingStar. Just to clarify one sentence in your article, we have over 5 million members (not 500). Thanks, Josh
  • CreditLandCom
    Sorry for the misprint. We’ve corrected the sentence. Thank you for noticing that.
  • Eric
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