Don't Use Your American Express Card at Wal-Mart and Marshalls
Credit Card Company Reducing Credit Limits Based on Computer Model Profiling
The bean counters at American Express apparently used computer models which showed that people who shop at stores such as Wal-Mart and Marshalls, and who also have their mortgage through Countrywide, have less desirable repayment records. Thus, the company is lumping in financially stable couples who pay their bills religiously with chronic late payers and those who renege on their debts, a practice that is reminiscent of the teacher who makes the whole class stay in at recess when just a few kids misbehave.
American Express spinmeister Michael O'Neill is quoted in the WSJ article defending the company's punitive practice, "If they're spending in a way that looks like a pattern of other people who had credit trouble before them, it gets added into the mix," he said, adding that just using one's card at Walmart would not be enough to have one's credit limit slashed. The company looks at patterns of problem payers generated by computer models to create a profile of poor repayment prospects.
Though I am not a personal fan of Wal-Mart, it does not seem fair that people who use their American Express cards there should be labeled as credit chumps. Perhaps they are preserving their capital by buying cheaply made goods from China instead of squandering their money on more expensively made goods from China sold at snobbier department stores and boutiques.
Published by Nancy Tracy - Featured Contributor in Arts & Entertainment
Nancy Tracy is a Yahoo! Featured Contributor for arts & entertainment. She enjoys writing about a variety of topics from psychology to politics to popular culture. Her article on "Transient Global Amnesia" w... View profile
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27 Comments
Post a CommentNotBelieving... I will certainly take your advice not to believe everything on the Internet. My initial source was the very reputabale consumer advocate Clark Howard, whose information I verified with other reputable sources such as The Wall Street Journal, a reference listed on the right hand column under the word "Reources". If you read my article carefully, AmEx uses an algorithm that could include shopping at Walmart; merely shopping at Walmart is not the only criterion. Thanks for reading my article.
You can't believe everything you read on the internet. If this is true, then there must be more to it then just shopping at WalMart. I do all my weekly shopping at WalMart and have used my American Express card weekly for a very long time and have never had my card limit lowered or my account canceled.
Sitting in my Business Math class, I am very appalled by the immaturity of the person who decides to stay "unnamed". So what if Nancy has an opinion? Screw you for being a jerk. She can say what she wants, without you investigating her career. Plus, she cited her sources. What makes you so qualified to judge her? I would like to see what makes you qualified to be a moron. Go get'em Nancy!
It happend to me
Depends... do you have foreign affairs experience? (which mind you can be substuted with a mini-van, an interest in extravegent hair products, and having residency in a place that has another country nearby).
lol... that was cute... but honestly, i think these issues are very real and its important to investigate... atleast people are talking about it... maybe its a failure of financial institutions in not being more explicit in their practises... and such dicussions could bring about some needed change... nothing personal Nancy.
Does that mean I can't write about Sarah Palin any more either?
P.S. Here's a great corroborating source from a well-respected consumer affairs expert since I am not personally a Financial Guru http://clarkhoward.com/liveweb/shownotes/2008/10/21/14279/
To correct the record, the comment below misses the whole point. The computer models do not look at individual credit reports; they look at shopping patterns that may indicate the person could be a bad credit risk EVEN IF THEY ARE NOT. It helps if you read the article before commenting.
So, in conclusion if an individual credit report is not something they can be proud of and/or their income does not support the amount of money they are revolving PLUS they have other common traits of delinquent or HIGH RISK profiles, their credit lines are reduced - NOT BECAUSE THEY SHOP AT DISCOUNT STORE.
Actually the writer is quiet oblivious to anything pertaining to lending institutions. As usual, another uninformed propaganist will profit off conveying incorrect information to consumers to discredit responsible lenders.
Credit limits are a measure of how much money is availible for usage at any given time. Thus, it is the $ amount to which that financial institution is exposed to - their risk. They do have business models and criteria for lending, which have become very stringent given the current market conditions as lenders wish to reduce their exposure to risks and also to avoid consumers from over extending themselves with debt (making a responsible decision - one which would've avoided defaults and moreover the credit crunch prevailent today).
So, in conclusion if an individual credit report is not something they can be proud of and/or their income does not support the amount of money they are revolving PLUS they have other common traits of delinquent or HIGH RISK profil