New insight into how the credit card companies have been secretly judging us all has emerged in a new Federal Reserve report. From Nov ’06-Nov ’09, some credit card companies admit to using more than just the usual income, credit and repayment history to evaluate if they should reduce your line of credit or raise rates. Yep, they’re looking at where you shop.

Some issuers said they considered as indicators of riskiness, and thus, candidates for credit limit reductions and/or rate increases:

• If you had a mortgage with a lender with badly performing portfolio
• Increased or changed “transaction velocity“
• Cash advances in association with buying stuff at jewelry and electronics stores
• Gambling, when coupled with a delinquency or exceeding credit limits
• Using a store credit card mainly at places other than the issuing store

The report also found that minority cardholders were more likely to see credit line reductions than whites.

The Federal Reserve gathered the information via mail-in surveys, and telephone and personal interviews with credit card issuers. Participation was mandatory.

Report to the Congress on Reductions of Consumer Credit Limits Based on Certain Information as to Experience or Transactions of the Consumer (PDF) [Federal Reserve via LowCards]

RELATED:
Your Credit Card Company Is Building A Psychological Profile Of You
Risk-Based Pricing Is A Myth

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