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corporate dominance | economic justice

credit card companies engaged in microscrutiny of purchases

in an effort to offset losses from the subprime loan meltdown, banks and credit card issuers are finding new ways to bring in revenue
On All Things Considered recently, it was reported that banks and credit card issuers are using new strategies to reel in revenue, in an effort to offset losses due to the subprime mortgage meltdown.

Robert Manning, director of the Center for Consumer Financial Services, was interviewed. He was asked how companies can get away with raising interest rates on people who have no late payments, good credit histories, etc...

He replied that this is a result of the "information economy"-- it's inexpensive for credit card companies to pull credit reports and monitor them, and some companies are even monitoring what gets purchased on credit cards.

As an example, Manning cited a case in which someone bought retread tires rather than new tires, on their credit card, and based on that their interest rate went up. I.e. buying the cheaper item might indicate the consumer can't afford a more expensive item, which might indicate to a credit card company that the person is a credit risk.

This shows just how interactive our relationships with credit issuers is. The pressure is on us not only to keep paying down debt, and to keep tolerating absurd interest rates, but there's also pressure to buy the right things, and to always keep our creditors in mind when making a purchase.

It also shows how corporate America is really in competition with the national security agencies, (or vice versa), to closely scrutinize consumers (Americans).

center for consumer financial services
 http://centers.cob.rit.edu/cfs/

note 12.Jul.2008 13:49

ca

Note: the story was on ATC on July 1, '08
"credit crunch hits consumers, companies"