AmEx rates credit risk by where you live, shop

AmEx rates credit risk by where you live, shop

www.msnbc.msn.com

A letter sent to Gilleland by American Express, one of the nation’s largest credit-card issuers, includes these reasons why the spending limit on his Platinum Card was reduced:

“Our credit experience with customers who have made purchases at establishments where you have recently used your card.”
“Our analysis of the credit risk associated with customers who have residential loans from the creditor(s) indicated in your credit report.”

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Mod Edit: Title fixed to reflect original article
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[edit on 7/10/2008 by Badge01]

I didn't know if too many people on ATS would see this, as I've only seen it on MSNBC, so far. Also, haven't seen it mentioned here, so I thought I'd share.

It seems the finacial turn and credit crunch will give rise to restricting access to funds through not only viablity, but through personal preferences.

You don't shop at the stores we like . . . sorry, no credit.
You aren't buying enough gas . . . sorry, no credit.
You aren't living in the type of neighborhood we approve of . . .
You aren't aren't associating with the right type of people . . .

Is this going to create a caste system beyond what we already have or what? These types of policies only go to reinforce how corporatization wants to control every aspect of your life! Think and act the way we approve and we will help you . . . is it not enough to be economically viable to incur dept any more? Now we have to act/behave how the financial sector sees fit?

Scary trend appearing . . .

www.msnbc.msn.com
(visit the link for the full news article)

[edit on 10/7/08 by solomons path]

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Mod Edit: Title fixed to reflect original article


[edit on 7/10/2008 by Badge01]

I found this to be true the last time went to Las Vegas ten years ago. They had always treated me very well on past trips when my address was in a prestigious gated community, shopped fine stores, dined at nice establishments,and used my credit card very freely. You seem to lose your credibility though, when you decide on lifestyle changes that don't include all of that kind of nonsense. I do miss the country club and golf course, but enjoy life more now minus the superficiality of the people of that ilk. It is true that how you manage your credit is just part of game.

Not seeing a problem here. People whose job it is to assess risks (one example are actuaries) are highly paid for a reason. They know what they are doing.

Now if you can prove some sort of discrimination, that's one thing. But otherwise, don't interfere with risk assessment.

[edit on 7-10-2008 by Sublime620]

My personal experience has proven to me that change of address, shopping and dining choices has caused my credit score to drop. It Is not a big thing to me though, using cash makes more sense than having to keep track of the extra monthly statements, and I tend to spend less as well.

reply to post by Sublime620


Shouldn't his credit be based on viablity, not arbitrary factors such as preference?

“Our credit experience with customers who have made purchases at establishments where you have recently used your card.”

“Our analysis of the credit risk associated with customers who have residential loans from the creditor(s) indicated in your credit report.”

I see nothing wrong with determining risk based on habits related to debt or the abundance or debt, assets claimed that hold false value, income, expenditures, et al. But does shopping at a community market vs. Wal-Mart or picking up washer at Goodwill vs. Best Buy show someone is more of a risk?

Conversely, let's just assume that two people have the same income and debt structure. AmEx is saying that one is less of a risk than the other based on where they spend their money? Not how much or how often, but where.

I guess what needs to be determined is how they classify these establishments, right? Is holding debt from BOA less risky than using a local credit union? Does your credit rating go down, if you don't bank with the big three? How about shopping . . . how can they judge you on the basis of the clientele of an establishment. How does someone else's habits speak to your viablity?

EDIT - spelling



[edit on 10/7/08 by solomons path]

reply to post by solomons path


I'm not sure exactly the procedures they are using. If things have gotten a bit extreme, it may be that they have reduced their risk factors and are cutting credit anywhere they can due to the recent credit crunch.

It's a complicated science, but I doubt just shopping at Goodwill is going to get your AmEx card declined. I've been wrong before though.