They will probably deny this but, apparently, credit card companies are closely monitoring your spending habits. For example, if they see that you were shopping at Holt Renfrew in 2008 and are now shopping at Wal-Mart, they might assume, perhaps correctly, that you lost your job and are now a credit risk and will reduce your credit limit.
Credit Card Spending
- Thread starter SkyRider
- Start date
Sounds a little paranoid.
In most cases they're looking out for credit card theft... not your job.
In most cases they're looking out for credit card theft... not your job.
I don't know how "closely" they monitor it, but if something looks odd or out of your ordinary spending habits, they will contact you to make sure it is you. They have been doing this for years... and I personally have no problem with this.
This happened in the U.S. but is probably true in Canada as well. This guy said his American Express card limit was cut to $3,800 from $10,000 because AMEX noticed he was now using his card in a bar frequented by "lowlifes" so they simply assumed he is now less creditworthy.
There's also been stories about used auto-parts and refurbished tires.
Albeit, Canada has a lot stricter privacy laws so I'm not sure how well that would work here... It's one thing to have a computer monitoring transactions for unusual spending to prevent fraud, it's another thing to have a computer (or worse a human) skimming your purchases to adjust your credit worthiness. You'd have to be careful about people's right to privacy...
This is true, has happened to me 2x. There are 2 cards that I don't use alot, they have sent me letters saying that they have done random reviews and since I am not using the card they are lowering my limit...one card went form $8,500 down to $2,500...WTF
I've had a couple minor issues with mine, but none recently. I remember I traveled to Europe for business a couple times back in the 90's (which I hardly did...) and the first time I did, they called my wife to verify I was in Italy... in a preemptive effort, I also called AMEX BEFORE our cruise to let them know I would be on a cruise and would likely be using my card at various locations through out the Caribbean...
The weirdest one I had was when I went to buy my pool table and I didn't know there was a spending limit on debit cards! It was declined and I was totally embarrassed and totally flabbergasted!
I called the bank right then & there and then said it was above my $2500 daily spending limit, but then adjusted the limit while I was on the phone, we put the charge through and had no issue since.
The weirdest one I had was when I went to buy my pool table and I didn't know there was a spending limit on debit cards! It was declined and I was totally embarrassed and totally flabbergasted!
I called the bank right then & there and then said it was above my $2500 daily spending limit, but then adjusted the limit while I was on the phone, we put the charge through and had no issue since.How does this cashback concept work? If you charge a $100 purchase, does somebody hand you $2?
I don't care how they track my habits... I pay the balance off each month, though... not the best terms to be loaned money under...
It saved me the hassel of having to get a purchase reversed
I got a call from Citibank security one Monday wanting to know if I was trying to make a $1500 purchase on my credit card over the weekend. I don't use this card to often nor do I make big purchases with it.
When asked if I had my card on me I replied yes and they wanted to confirm with me that I indeed had it. When I checked it turned out the one I had in my posession was expired and since I rarely use it I didn't know. Apparently my replacement card was sent to the wrong address and someone made an attempt to use.
They can monitor my card all they want. It doesn't bother me.
Oh yeah, I got a call from RBC the other week notifying me to get a replacement card from my branch because I had used my debit card in a location that was being monitored for "card skimming".
I got a call from Citibank security one Monday wanting to know if I was trying to make a $1500 purchase on my credit card over the weekend. I don't use this card to often nor do I make big purchases with it.
When asked if I had my card on me I replied yes and they wanted to confirm with me that I indeed had it. When I checked it turned out the one I had in my posession was expired and since I rarely use it I didn't know. Apparently my replacement card was sent to the wrong address and someone made an attempt to use.
They can monitor my card all they want. It doesn't bother me.
Oh yeah, I got a call from RBC the other week notifying me to get a replacement card from my branch because I had used my debit card in a location that was being monitored for "card skimming".
In the US many people have had their limit reduced, in some cases drastically, after Sept. 08. Has nothing to do with lowlife bars.
I have one credit card with a purposely low limit that I use for online purchases. Figure this would limit the damage in case my card is misused.
Heard on the news to-day that credit card losses are running at 10%. The banks collect only $90 on every $100 charged.
Heard on the news to-day that credit card losses are running at 10%
. The banks collect only $90 on every $100 charged....and they charge 20% interest plus anywhere from 1.5 to 4% of the original purchase to the merchant s well.I have one credit card with a purposely low limit that I use for online purchases. Figure this would limit the damage in case my card is misused.
Heard on the news to-day that credit card losses are running at 10%
So 10% writedowns are easy to take when you are making 21-25% a year on every purchase!
Yeh, the Bank's primary concern, in Canada anyhow, is their exposure for loss which is of course 100% for fradulent credit card or debit card use.
The "professionals" who perpetrate these crimes are getting more and more sophisticated and it's a game of leapfrog for the Banks to keep ahead of them.
I gather the next wave is for embedded microchips in cards which will defeat printing new phony debit cards.
Of course in Canada if they ever catch any of these douchebags it's a one year jail term and they serve 60 days, worst case scenario.
The "professionals" who perpetrate these crimes are getting more and more sophisticated and it's a game of leapfrog for the Banks to keep ahead of them.
I gather the next wave is for embedded microchips in cards which will defeat printing new phony debit cards.
Of course in Canada if they ever catch any of these douchebags it's a one year jail term and they serve 60 days, worst case scenario.
It depends on your credit history as we all know.
For the record,I just had 1 of my cards change my limit..... almost double from what it was previosly, I guess I'm a good risk..... now,my question..... why did they increase my limit, when I never get close to the old limit, and I pay off every month?
For the record,I just had 1 of my cards change my limit..... almost double from what it was previosly, I guess I'm a good risk..... now,my question..... why did they increase my limit, when I never get close to the old limit, and I pay off every month?
That is an incorrect assumption
You are assuming:
1. Everyone of their card holders does not pay down the outstanding balance
The vast majority do pay down their outstanding monthly balance
2. The balance for all the purchases is not paid for one year.(In-order to apply the 20% interest)
There are minimum monthly payments for all outstanding balances
3. A 4% merchant discount is higher than any thing I have heard of. More like 1.5 to 2.5%
The CC processing companies such as VISA & Master card take the majority of that
The company funding the card (eg RBC , Sears, Canadian Tire) will get 1% if they are lucky
4. You have to subtract the cost of funding the purchase to begin with
For purchases that are paid off 28 days later (when responsible consumers pay their outstanding balances) the companies receive no revenue other than the merchant discount, yet have to fund the purchase
It does not sound like much, try funding a $200 MM worth of purchases per month
5. The interest is booked (i.e added onto your balance), but CC companies do not receive that cash until the balance is paid down
6. Bad debts are a fact of life when you lend half a million people money by issuing them credit
Accounts overdue by 9 months are usually sold off to collection agencies for $0.10 to 0.50 on the dollar.
You will not make a lot of money if you lend someone $100 and then get back only $25 some 9 months later.
The trick in this business is to give credit to the select group of customers who will eventually pay off the balance, after a significant amount of interest has accumulated.
Give too much credit to those that pay the balance off when its due & you do not make any revenue, yet incur the funding and processing costs.
Give too much credit to those that never pay & you go out of business quickly
Post-recession the % of write-offs has increased a lot, so these companies are not rolling in the $ as they were before
Just some thoughts on credit cards.....
1. Yes some people have had their limits cut in the wake of the financial meltdown last fall. CC companies have to maintain reserves on the limits outstanding and so with the overall tightening of the credit markets and subsequent cash crunch they undertook to trim this liability.
2. CC companies do monitor usage to detect instances of fraudulent use. Although this is the primary use of this data, it wouldn't surprise me to learn that it is resold for other purposes.
3. If you are not paying off your cards monthly you should look for cheaper financing like a line of credit.
4. Look at how you use your card. Sometimes paying an annual fee but collecting a higher percentage of cashback or other benefits more than offsets the annual fee.
1. Yes some people have had their limits cut in the wake of the financial meltdown last fall. CC companies have to maintain reserves on the limits outstanding and so with the overall tightening of the credit markets and subsequent cash crunch they undertook to trim this liability.
2. CC companies do monitor usage to detect instances of fraudulent use. Although this is the primary use of this data, it wouldn't surprise me to learn that it is resold for other purposes.
3. If you are not paying off your cards monthly you should look for cheaper financing like a line of credit.
4. Look at how you use your card. Sometimes paying an annual fee but collecting a higher percentage of cashback or other benefits more than offsets the annual fee.
i lost my job 6 months ago and have not stopped receiving CC offerings in the mail. I applied for one just because they offered a free gift. In the application I falsely wrote my previous employer as my current employer even though i am unemployed. Not only did they approve, I did not bother to pickup the CC because I only wanted the free gift, they kept calling and sending me replacement cards months after.
They might not be trying to reduce his credit limit, as much as limit exposure to loses. Someone at that bar might be operating an active skimming operation.
You purchase one thing from the wrong location, and you get at least a phone call from the Credit Card company immediately.
