Beware: These stores could harm your credit!

Credit card companies have finally gone on record saying that they grant credit based on where a person shops –and lives if you haven’t heard that too.  I already knew, but I had to find out the hard way.  

The strange thing is that the companies won’t reveal what stores or “establishments” will negatively affect your credit rating.  An American Express spokesperson says that the reason they won’t reveal the information, in part, is because their “property risk model” changes frequently.  Does that mean every day, every week, every month?  I suppose they could alert me via e-mail just like they send me special offers to patronize, for example, Wal-Mart.  I think they just don’t want to reveal that information. It wouldn’t be good business to discredit (pun intended) a business partner that brings you millions in interchange fees.    

So, in the spirit of consumer activism, I suggest we call their bluff.  In the next few days, I will reveal the details of my bills and the bills of others who have been put on a tighter leash by lenders.  That way, millions of you, including the retailers themselves, can decide what stores are bad and which are good.  I would even encourage retailers on the list to make a phone call to American Express and verify their status as a good guy or bad guy, but those efforts may prove to be frivolous.  After all, their status could change any second.    

I’ll give you a sneak preview.  You may want to avoid Wal-Mart and instead shop at a high end grocery store or department store.  

Comments

[Diana Porter]

Amex did the same thing to us after we used the card to pay for a medical expense at Texas Children's hospital on a Friday in November '08. The next Monday, they sent out the letter lowering our credit limit and removing all Sign and Travel charge capability. We had never been late and had always paid almost double the minmum payment.

[Mcamp]

I am old enough to remember "redlining" by banks. It was the practice of denying home loans to potential buyers who wanted mortgages in minority neighborhoods. Your American Express experience appears to be an updated version of this illegal practice based on where minorities or low incomce people tend to shop.

Thanks for speaking out because the redlining of cardholders is based on faulty assumptions that lump people into consumer groups and then applies discriminatory rules to the group. This has got to be illegal.

[mewilliamc]

Let's get the word out. To our friends,to local tv stations.Any media that will listen. What if we ask Walmart to get involved? What if they thought they were on the black list? How much would it cost AMEX if they stoped taking the card altogether? Let's all e-mail our favorite restuarant and ask if they know if they are on the blacklist.I plan to contact TGI Friday's today. Merchants and card members can make a difference if they create enough grief for the credit card companies. Great job here Kevin. Keep up the good work.

[krater]

Excellent blog, Kevin.

I have no need of credit and my credit score doesnt really matter to me, but this stuff pisses me off anyway. I intend to spend some of my life causing these crooks aggravation- legally of course.

Keep up the great blog!

[NK]

Last summer, Juniper Bank suddenly switched me to a 20 day cycle so that I couldn't use an online bill-paying program--I only noticed because I came back from vacation and the bill that had come in the 5 days I was gone was due in 15 days. I cancelled the card.
If they are d/b/a Capital One, know that just yesterday I opened a 0% credit for 6 mo. offer sent to my dad at my home (I have power of attorney for him). Dad is severely disabled and has been in a nursing home for 2 years; he didn't pay any of his $12,000 in cc debts which went into collection, and is on Title 19 with unattachable income (no one can get a financial judgment against him). Where is your $ going over at Juniper/Capital One? It's being lent to people who are the very worst credit risks!
My husband and I only use our Am Ex for Costco expenses and have had no problem with them whatsoever, so apparently Costco is not considered low rent? Good thing we didn't use it for Big Lots, and that we buy our household goods in cash from rummage sales and Craig's List, so they don't think we're bad credit risks.
I am SO glad you have taken the time to be an activist on this issue, Kevin. You rock!

[Bizness Ben]

Hi Kevin,
Which is more important, your credit or your health? Don't answer, let me tell you.

In case you "forgot" you are a Black man and headed for an early heart attack. If you keep eating at all those "dead food" restaurants you are guaranteed to "catch"
diabetes.

And oh by the way, Wally Mart is not your friend and never will be. Nor is Starbucklings.

I tried to save Starbucks by drinking more latte but I got sick. Now I'm trying to save myself. I suggest you do the same and stay away from those "dead food" joints.

And one other thing Kevin, my money funny
honey until I realized, just like AMEX, Goldman Sach, etc, I have to become my own bank holding company. Hint. Hint.

Peace

[will]

1. Congress approved millions of dollars in bailout money (tax payers money) to aid banks that were "supposedly" sinking?

2. Congress never once asked "Ummm...what exactly are the banks going to use the bailout money (tax payers money) for?" Hey Congress, I've a better idea. The next time? Just write these greedy fat cats a blank check!

3. Instead of using the bailout money to help the American people with loans? These jerks (CEO's) were hoarding the money and giving themselves raises; giving their employees bonuses, financing lavish vacations and high end jets for their company. ( o _ 0 )?!?

This week Citibank tried to purchase a $50 million dollar high end jet for their company. President Obama essentially told them that "it's not ok to spend tax payers money on company toys." Citibank tucked their tails between their legs and complied. What part of "We're in a recession" don't they comprehend. ( o _ 0 )?!?

4. Dec 08, When approached by the AP (Associated Press) concerning how the bailout money (tax payers money) was being used, certain bank CEO's and bank representatives weren't exactly forth coming. Their excuse?

Just to paraphrase one bank representative "It's a rather large amount to track. It's in the banking system." Other bank reps and CEO's declined comment when approached by the AP. Banks that can't track money?! Yeah right. It's called "misappropriation."

5. 29 Jan 09. It appears that banks will get the 2nd half of the bailout money. Albeit, this time Congress is requiring full "accountability" from the banks.

Having said all of this, the way I see it? The banks "owe" the American tax payers. We are the main reason why AMEX, Citibank and other banks haven't gone belly up. What AMEX is doing is scandelous, appauling and just plain dirty. I hope the light at the end of the tunnel starts with legislation; President Obama and Congress.

[Cosmos Human]

It has to be Wal-Mart. AMEX hates when their card is used at Wally World. Why doesn't Wal-Mart just cancel their contract?

I enjoy this site. Keep up the most excellent work.

[Daniel]

I am quite sure the establishment is not the factor beinging utilized by the credit card companies to determine ones credit worthiness. They may not admit my following statement as true, but I beielve it is the community or nieghbirhood that the establishment is located in, that is the real issue of concern for them.

Of course if they admit this they can be accused of judging a persons possible diliquencies based on the "side" of the road they live on or simply put If your African American or Hispanic your more likely to be a credit risk.

[Lois]

I watched the video and have read this website with great interest and concern. I am a retired person so the credit I now have (enjoy) is the only one that I can get. On a fixed income I shop at Walmart all the time, and several other low cost establishments that you have used. My card awards mileage (great for seeing our daughter in Hawaii) so we put everything we can on the credit card in order to rack up the miles. So far, knock on wood, I have not had my credit line reduced or interest rate increase. I don't know if the area that I live in makes any difference or not. I'm just grateful that it doesn't.
I would be highly incensed if this happened to me, espeically after the bailout, but I did hear of it prior to the bailout too. And it is something that I have been watching for each month.
Good luck with all your hard work in this website. I hope that you are able to rectify this at some future date.
Lois

[Concerned Citizen]

Could it be possible that it may have something to do with all the fast food places you eat at and what they perceive that this does to your health? Perhaps they think you are at risk for a heart attack or other illness and that your financial status will suffer from it and you won't be able to meet your obligations so they are protecting themselves.

[Osric]

Kevin,

First of all, thank you for your time and effort in sharing this. What seems odd is that if a Credit Card company has an issue with a merchant, it would make sense to pull the card from those stores. Punishing the card holder is perhaps a convenient way or them to continue to make money on their "risky" merchant accounts and put the burden of the problem on someone else.

Why this is acceptable is beyond me. Again, I thank you for you efforts and hope that the attention this draws can make something happen.

[Ruth]

I spent a couple of days last week sending our
President, VP, and every senator this email:

"Dear Mr. President,
As for that billions dollar loan to the banks, why not loan us poor
people the money directly at a 2% or 2.5% interest. It's our money! And
I assure you loaning money to ourselves will be paid back easier,
quicker and on our honor. Very few will default. Please consider loaning
us the money directly. It's done this way in other countries and it's
our money. And it's fair.
Thank you
Ruth

[Ruth]

Helo Kevin,
Good for you! I saw you on Good Morning America this morning. You are
probably going to hear thousands of bad stories.
And I also own a small business. A kite/toy shop here in Lake Geneva,
Wisconsin.

I have been in business 17 years. I was a beaten battered woman. I got
out of that, became a strong person and decided to start my own small
shop. My 'ex' stole everything I had in the world except the clothes on
my back. I worked in an office by day and as a waitress nights and
saved $3,280. I asked about twenty banks for a loan, they laughed. One
even said, "there is no way _*I*_ am going to let *you* start a 'kite'
shop in _*my*_ town"!
I applied for a $23,000 SBA loan which was dragged out for a year. This
banker was angry I went behind his bank and got the loan, so he held the
money and made me come and ask *him* for money every time the UPS guy
delivered a shipment. I did this to his bidding for a year. Finally I
got another bank in the next town to loan me $35,000. The end right?
I quickly found out I had to have a credit card. I got an old standard
Visa credit card. And I kept all my bills paid on time. I was carrying
about $10,000 to $12,000 on this card and my credit score was 890.
I wanted to buy my own home. This is huge for a woman (especially in
'red-neck country!). And you thought you had to live with prejudice! So
have women for thousands of years!
I went to the banks for a home loan, and got it. Called Visa and told
them I wanted a final pay-off on the credit card balance. They told me I
could not pay it off. What!???!!! Why can't I pay it off? They said
because my credit score is too high. I sent faxes to their home office
begging to let me pay it off. Their response was my credit score was too
high. They do not let you "payoff" if you have a high score. I could not
believe this. I talked to several people at the Visa headquarters and
they told me the same. _*My credit score was too high to let me pay it
off.*_ I asked how I could get bad credit? They told me I needed to let
the bill sit for at least six months. I did. Another four thousand
dollars was added as late fees and the interest went to 32% and my
credit score went down to 250 (high risk).
Finally on Memorial Day weekend they called back and said they would
settle for $6,000 but only if I had it posted to them by Monday morning
in a cashiers check. That was on Memeorial Day weekend when no banks
were open. No banks open and no way to get them the money and they knew it!

Now because of this low credit score my bank raised my house and
business loans to 8.89% interest.
I have tried to get lower interest from probably a hundred different
banks in these four years since this happened, but I can not get a loan
because the Visa bank holders sold my credit card loan to Wells Fargo
then others demanding the full $17,000 plus court costs. I have been and
continue to be harassed with as many as thirty six phone calls per day.

I have to get a loan but no bank will touch me because all they see is
the $17,000 sitting out there.

I have no idea how I can get help, but I want my 890 credit score back.
I have raised an Eagle Scout son, a Wohelo daughter, I am a member of
the DAR and my brother is a minister. My word is my honor. This should
_*never*_ have been allowed to happened!

Sorry to burden you any further. I wish the government could take these
people out behind the shed!!!
(It's just an old saying from my grandpa when us kids did something we
weren't supposed to.)

Thank you ever so much for listening. Best of luck to you! And God Bless.
Sincerely,
Ruth

[Craig]

None of this is surprising. Sad, but not surprising!
The only way to truly avoid this is to not use credit if possible, and make sure to pay your balances in full every month, so they never get to charge you any interest. The rules of the game keep changing, and they will always have the upper hand.

[Yarzo]

I got my available credit lowered too about 2 weeks after shopping at Walmart. The funny thing is, I shopped at Walmart via the Amex reward points store. So Amex is going to ding customers for shopping at stores that are linked to via their points program!

[AE]

AE did this to us in December. This time they used the concern about the Sign & Travel balance. We have had this card since 2000, and it has always been paid on time. We had cancelled S&T because the interest rate was high and we did not want any large purchases put on there. 3 days prior to leaving for a trip to Disney we received the letter that we would only have access to a $1000 limit. Considering this is not a 'charge card' and you have to pay your balance in full, I questioned this. I basically got a run around and was told they are always reviewing accounts and maybe in six months they would reverse there decision. Thanks but no thanks. AE always seemed to be a customer friendly company, no longer so I have stopped using the card.
I stated, that we pay our account on time and in full, now we have to pay the price for there bad credit decisions. They do not care and why should they? They received money from the government aka us the taxpayers, and are allowed to do what they want.

The person who made the comment about being turned off, They did not slam Walmart. What was said was that normally his charges are at the same places every month. This happened after he used his card at his local Walmart. Since AE would not answer what store 'concerned' them, he was looking at his charges for a store that he normally does not use his card. If anyone slammed Walmart that would be AE.

[isabella]

Kevin, THANK YOU FOR SHARING YOUR STORY!!!

[Kandie]

I, too, have been the subject of credit line deduction without any warning. I was approached by a credit card company informing me that I was pre-approved for a credit card based on my credit history. I was issued a Juniper (Barclay Bank) d/b/a Capital One account with a $1,000 limit. I had used the card once at WalMart for $44 and once at an ATM for $40. Two weeks later I attempted to use the card at an ATM and it was denied. I called the number on the card and was told that I only had $54 on the card for ATM use. ???? He explained that the ATM could be used up to $100 BUT ON A ONE TIME ONLY BASIS!!! Which meant that if I got $100 from an ATM, then I could NEVER get any more out for the remainder of my account. They had also reduced my limit from $1000 to $350 with no prior notification. I wrote letters to the attorney general's offices in two states, the consumer protection agencies and better business bureaus. I finally got a letter from the credit card company stating that my limit had been reduced due to the fact that I tended to make minimum payments on my other two cards and that I used the other two cards at ATM machines too often. Please tell all others to boycott the above cards and if this happens to them to contact all government agencies in the state issued to alert them of this fraudulant and deceptive practices. Thank you. Kandie Bonifas, Washington State

[Candyce]

High Five Kevin!!! Thanks for outing American Express on their slickness. The same thing happened with me. My credit limit was lowered which then affected my insurance premium or so they say. God knows what else has been affected. All I know is, with this scathing economy no one can afford for things like this to happen. I have been with this card company for over 10 years with no problems. You would think that they would like to retain good customers. Do they have a retention department? I tell you it pains me to know that this card company received tax payers bailout money in the millions. Something has to been done. Look!!! I WANT MY MONEY BACK!!! Now!!! What do I have to do to get it?