Information is already leaking out about the efforts of American Express to closely watch the places their card members shop at as an indication of credit problems.
With mounting losses by credit card companies and an avalanche of new bad credit card debt to come, creditors are looking for ways to identify potential high risk customers in order to reduce credit limits or increase interest rates.
I would think that a pattern that involved a lot of entertainment expenses, casino charges, thrift store shopping or using the card to pay another card, could potentially be an indication of brewing problems.
Any formula put together by creditors to screen use is going to be inherently unfair. For most people a pattern of recent charges that gets flagged can be easily explained, but for others, this might allow creditors to nip a debt problem in the bud.
I would think that another warning sign would be increasing balance on other cards you carry. We already know that creditors are monitoring your credit report for evidence of other late payments so watching balances on other cards seems logical.
Or maybe watching for a sudden use of credit cards for expenses not typically charged in the past. This might be a flurry of charges for utility bills and at grocery stores when this was never the pattern in the past.
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