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Giving up even MORE personal info to get credit….?
Posted: 24 June 2008 08:34 AM   [ Ignore ]
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For some people this may be of no interest…..for others this is perhaps a current event in their own lives.  Interestingly, some prospective employers also use this method in reverse when making hiring decisions based on a prospective employee’s past credit history. 
http://finance.yahoo.com/banking-budgeting/article/105283/Card-Issuers-Get-Personal-to-Check-Credit

Card Issuers Get Personal to Check Credit
by Robin Sidel
Monday, June 23, 2008provided byWSJ

When it comes to staying in good graces with your credit-card company, having an unsullied credit record might not be enough.

Lenders have long relied on consumers’ credit scores to decide whether to approve card applications and how much credit to extend and at what interest rate. Now, as financial firms face rising losses because of the weakening economy, some big card issuers are digging deeper into their customers’ personal lives. They are scrutinizing where cardholders live, for example, and what line of work they are in.

Card-industry executives say the heightened focus is directed especially at residents of states hit hardest by the housing slump, such as California, Florida and Nevada. Cardholders who work in struggling industries like construction and finance also are feeling a tighter squeeze, with their credit lines suddenly reduced sharply even if they always paid their bills on time and in full. Other consumers are bumping up against myriad other restrictions.

Michael Shortt, who owns a television-production company in Savannah, Ga., says American Express Co. slashed the credit lines on three of the six AmEx cards that he uses for his business, even though he routinely pays them off every month. Two of the credit lines shrank to $1,000 from $6,000, and the third was reduced to $36,000 from $42,000.

When he called the New York company’s customer-service department, Mr. Shortt says he was told that his available credit declined because he hadn’t supplied information about his company to Dun & Bradstreet Corp., which provides credit data on small businesses. On Saturday, Mr. Shortt got a letter from AmEx notifying him that his $36,000 credit line was being cut to $4,300. He cut that card up Wednesday, he says.

“Of all the people that [AmEx] would want to mess with, why would it be a customer who pays their bills on time and spends a great deal of money?” says Mr. Shortt, who says he has accumulated 780,000 rewards points through his American Express cards. He says he gets calls from Dun & Bradstreet, but he doesn’t feel comfortable providing information about his business, especially over the telephone. A Dun & Bradstreet spokesman couldn’t be reached to comment.

A spokeswoman for American Express declined to comment on Mr. Shortt’s situation but says the card issuer does rely on information provided by Dun & Bradstreet and other sources to help determine credit-worthiness. “We are being more targeted in managing risk prudently within appropriate customer segments,” the spokeswoman says.

The greater scrutiny reflects lenders’ attempts to slow a rising tide of delinquencies and losses from their consumer businesses. Washington Mutual Inc., a big provider of credit cards for subprime borrowers, or those with relatively weak credit ratings, expects credit losses will rise to 9.5% to 10.5% of its total credit-card loans this year, up from 6.9% at the end of 2007. J.P. Morgan Chase & Co. expects its credit-card charge-offs to rise to 6% next year, up from 4.37% in the first quarter of 2008.

According to the Federal Reserve’s latest survey of senior loan officers, 30% of banks said they tightened lending standards, including requiring higher FICO credit scores, on credit-card loans between January and April. That is up from about 10% in the Fed’s survey in January.

[color=red]Lower Limits

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Posted: 24 June 2008 09:37 AM   [ Ignore ]   [ # 1 ]
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Way to kick the guys already down! Urk.

Pre-emptive punishment for percieved possible delinquincy? Urk Urk. blank stare

Hell in a handbasket people! That’s where we’re headed. (Even my cursory knowledge of finance and economics says this is a BAD idea…) Triple Urk!

*sigh* downer

Not that I have any real credit anyway….. downer

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Posted: 25 June 2008 02:45 AM   [ Ignore ]   [ # 2 ]
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The are going to end up with no customers because their standards are going to end up so high that no one will meet them.

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Posted: 25 June 2008 07:05 AM   [ Ignore ]   [ # 3 ]
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Maybe the World just needs to change the way we do business.  Perhaps the era of the credit card is going the way of the dinosaurs.  Up until just 50 years ago the credit card was a luxury and a major convenience item offtered mostly by high end department stores to preferred customers.  Now days we use it to buy a meal at McDonalds.  Riciculous.

If a guy pays off his $36,000 credit card bill every month, the credit card company makes no money off of him.  They make their money off of the businesses he uses the card with by charging them a percentage of the customers charges.  This means a smaller profit and price increases to cover this. 

A $36,000 credit limit for one guy, means higher prices for everybody else.  If you can afford to pay off $36,000 a month, then you can afford to pay the vendor cash, so I don’t see what he’s bitching about.  And if he doesn’t use his $36,000 every month, then there’s nothing to bitch about anyway.

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Posted: 25 June 2008 02:39 PM   [ Ignore ]   [ # 4 ]
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Bebelicious - 25 June 2008 11:05 AM

A $36,000 credit limit for one guy, means higher prices for everybody else.  If you can afford to pay off $36,000 a month, then you can afford to pay the vendor cash, so I don’t see what he’s bitching about.  And if he doesn’t use his $36,000 every month, then there’s nothing to bitch about anyway.

That’s why I took such a long time to understand why normal people need credit-cards.
As I learned it, it is like a quick loan for small amounts. Or rather, the bank pays the seller, then you pay the bank when you can, usually near the end of the month, with any debts transferring to the next month, but with interests. Useful for companies, they get the money at once and don’t have to deal with sending lawyers in case of non-payment.
But for consumers to buy things on credit? What happened to saving up for a new computer or plasma screen? And if you really need to buy something now you can’t afford with your paycheck, an actual loan will have better interest rates anyway.
And to make things completely screwed up, I heard of people using credit cards to buy food! If you can afford a credit card, do you really need to borrow money to buy food?

Of course, credit cards are still in use for direct payments (cash and carry) and sales through other channels (internet, telephone) since it usually takes time or a terminal to verify validity of a payment with a cheque or a debit card. With a credit-card, the bank assures the shop it gets the money. But with current network infrastucture and the increasing use of verification of credit cards, that is becoming a bit of a moot point i.m.o.

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Posted: 25 June 2008 03:03 PM   [ Ignore ]   [ # 5 ]
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They are required for some things now though, like car rentals or reserving a hotel room. T

hey are also nice things to have in emergencies, like when you are driving to work and your tire completely falls off as you are making a turn blank stare

Sometimes unexpected events happen that you are not financially prepared for, like a pet needing surgery, etc. They come in handy for those types of things too.

They are excellent for purchasing large quantities of yarn too…

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Posted: 25 June 2008 03:15 PM   [ Ignore ]   [ # 6 ]
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You’re right about emergencies!  The problem is that I think a LOT of people hold onto them just for that and so don’t use them often enough to make the lenders enough in interest.  Isn’t it American Express (I believe) that you pay off every month?  And I think that’s also the one that most places won’t let you even use.

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Posted: 25 June 2008 03:16 PM   [ Ignore ]   [ # 7 ]
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Credit cards used to be a major money-saving device as well, though most modern locks seem not to jimmy that way any more.

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Posted: 25 June 2008 04:14 PM   [ Ignore ]   [ # 8 ]
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MadCarlotta - 25 June 2008 07:03 PM

They are required for some things now though, like car rentals or reserving a hotel room. T

hey are also nice things to have in emergencies, like when you are driving to work and your tire completely falls off as you are making a turn blank stare

Sometimes unexpected events happen that you are not financially prepared for, like a pet needing surgery, etc. They come in handy for those types of things too.

They are excellent for purchasing large quantities of yarn too…

Yup, I think many people keep ‘em for those reasons. (ok, perhaps not the last one) But that only makes sense in an economy where enough people have credit cards. In Belgium, we (luckily) don’t require a credit card for identification. And then there is this strong habit to save money on a saving account a “spaarboekje”. Or there was anyway, when I was a kid (not that long ago) banks tended to seek out newborns so they could sell those. ( a bit pushy eh smile ). But at least that’s better than getting unasked credit cards mailed to you.
People are saving less these days (bad economy part of the reason) and are buying more on-line, so I think it’s only time before credit cards get more widespread here. I know I’ll get one for the latter reason once I see one with good conditions, despite my distaste.  confused

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Posted: 25 June 2008 05:09 PM   [ Ignore ]   [ # 9 ]
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I don’t know if everyone’s using credit cards to buy online though.  I buy almost EVERYTHING online (and have for about a decade now-used by buy all my groceries and prescriptions that way too) but I use ‘PayPal anywhere’ and it transfers funds directly from my checking account.  I use my debit card otherwise which is by VISA…I guess that’s viewed as a credit card by some formats. 

Erik does use his credit cards though.

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Posted: 25 June 2008 07:40 PM   [ Ignore ]   [ # 10 ]
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I’ve never actually had a credit card, and I don’t really want one, either.  I have had a number of bank cards, though, that simply connect straight into my checking account.  With those, I don’t really have to worry about accidentally spending thousands of dollars more than I have.

Credit cards and the like are a lot less useful around here than they are in many places elsewhere, anyway.  None of the house rental agencies accept them, and the only utility that I know of that theoretically accepts them is the telephone company.  I say “theoretically” because the system they have to accept credit cards is so convoluted and user unfriendly that nobody I know of has ever successfully used it.

FrostBird - 25 June 2008 08:14 PM

Or there was anyway, when I was a kid (not that long ago) banks tended to seek out newborns so they could sell those.

Selling newborns?  Hmm. . .do you know if they’re still buying ‘em?

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Posted: 25 June 2008 10:11 PM   [ Ignore ]   [ # 11 ]
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I pretty much only use my credit card when I travel down in the States.  I’ve found that they dont’ accept my debit card at stores or gas stations although I can take cash out at a machine.  It’s just easier to use the card then to either carry enough cash to last the trip or try and find a cache machine every time I want to stop for gas.  If I could figure out why nothing down there accepts my debit card I would be a lot happier.

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