Sean Reiser

Was turned onto this article from the Concord Monitor which states:

In May, President Obama signed a bill that will limit some of the worst practices of credit card companies that have been raising rates with little reason and without notice and charging obscene late fees. The bill also requires that banking regulators study the practice of using information about where a person shops to assessing credit worthiness. That means credit card companies, which are already raising rates and cutting credit limits before the new law goes into effect in January, are likely to continue keep track of where and how their customers spend money until at least 2011.

The article goes on to state some activities which might be red flags to the credit card companies including:

• Charging items at auto parts or grocery stores. Both are seen as a sign of financial distress.
• Charging items at pawn shops, drug stores and shoe repair shops.
• Charging beer, wine or liquor. (article even mentioned buying "a late-night round of drinks")
• Charging purchases at the Salvation Army or a discount store
• Charging medical care

I have a number of issues with this:

1. The credit card companies have based large campaigns around "cards are easier then checks and safer then cash", now that some folks have bought into that mindset could theoretically be punished for it.
2. Because of rewards programs and many people will charge every one of their purchases and pay off their entire balance monthly. I know it's a practice that the CC companies don't like because they're making less money on these transactions, but it's their system.
3. Some items on the list like shopping at discount stores, pawn shops and the Salvation Army as well as getting shoe repairs and repairing you own car might show financial responsibility, not a lack of ability to pay.
4. Many companies require employees carry expenses on their personal credit card. So that "late-night round of drinks" might be business related.

The article mentions companies purchasing it's client's spending records through companies like Equifax so, in theory, they'll be able to get data on your purchases even if you're not using their credit card. As I type this, it occurs to me that if you use an affinity card your purchases can even be tracked if you pay in cash. The reproductions of this is mind boggling "My Smith, we know you've always paid your bills on time and know you're employed but we see you're buying cancer medication, as you might not be around longer we need to raise your rates".

At the end of the day, I know credit card companies (and the entire nation) have an issues right now which are caused by the overextension of credit. I really don't think that invasive tracking of a person's spending habits is the solution to the problem.