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US Credit Card Companies Classify Users According to Use

US Credit Card Companies Classify Users According to Use

Posted May. 19, 2009 08:27,   


“Use your credit card, and they know what you got.”

It might sound scary, but the longer a person uses his or her credit card, the more the card company will know about the client.

Credit card companies try to read consumers’ minds not because they want to analyze their spending propensity but rather their ability to pay their credit card bills.

According to data on 85,000 types of credit card use compiled by major U.S. credit card companies such as American Express, JPMorgan Chase and Capital One, 3,940 of 100,000 cardholders who whipped out plastic at adult establishments with pool tables fail to pay their credit card bills four times a year on average within the next 12 months of usage.

By contrast, just 400 of 100,000 card users fail to pay their bills four times a year.

In addition, people who use their credit cards at bars are four times more likely to not pay their bills than those using plastic at dental clinics.

Those who purchase chair leg covers and snow removal equipment are the type of consumers whom credit card issuers recognize as sincere. Buyers of such covers to prevent scratches on their floors hate to be delinquent on their card payments, and those who purchase snow removal equipment generally have a strong sense of social responsibility.

People who bought top-notch feed for wild birds that they do not raise are also cited as good customers.

By contrast, statistics show that people who pay their psychiatrists or counselors with a credit card have higher rates of card delinquency. Experts blame this on psychological anxiety that could eventually lead to loss of job or other types of economic instability.

Checking bank accounts through the Internet early in the morning or increased card spending for food or other miscellaneous merchandise are also considered signs of a cash shortage.

Consumers who buy cheaper brands of engine oil or coolant are also categorized as those who deserve “caution.”

The latest issue of the New York Times Magazine said U.S. credit card companies are using a variety of measures to pressure consumers with overdue bills by advancing their payment deadlines, reducing their credit limits, or sharply increasing the interest on unpaid amounts.

Certain card issuers have gone as far as canceling cards issued to such customers to improve their finances amid rising delinquencies among credit card users.

The U.S. Congress has approved a bill on stronger protection of cardholders 357-70, heightening tension with domestic industries.