Read if u have a bank of america cc,aor....

Same here. If this bothers anybody, he/she doesn't belong in FWF

Assuming things are being handled similarly in the US as in Europe, PIF each month, or paying the minimums only on 0% BT's will become an excuse for credit card companies to lower limits, or cancel cards, and otherwise weed out 'unprofitable' customers.

Sunday Times article: Feb 10, 2008 - About weeding out 'unprofitable' customers.
The Sunday TimesFebruary 10, 2008

Beat the credit card blacklist
Prudent borrowers could be turned away when banks start sharing information in the springAli Hussain
CREDIT-CARD companies are to start sharing information in the spring that will help them weed out prudent and therefore “unprofitable” customers for the first time.

Banks have been talking to industry bodies for several months about a new initiative that will enable them to identify consumers who clear their balances in full every month, or who constantly switch to 0% deals. Such customers make the banks no money because they do not pay punitive interest charges of up to 28%.

The disclosure follows Egg’s controversial decision to cancel the cards of 160,000 customers this month. It claimed they were “high risk” – in other words, they had missed payments or borrowed beyond their means.

However, hundreds of Egg customers came forward to say their cards had been cancelled even though they had never missed a payment, or cleared their balances in full every month.

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This raised speculation that Egg, owned by America’s Citigroup, had cancelled the cards simply because it was not making money from them – and this will become much easier under the new initiative.

At present, the only information banks share includes when a card was issued, when it was closed, the balance and whether or not there have been any missed or late payments. From the spring, however, customers can be vetted by lenders to see if they pay off their balance in full each month, and make use of promotional 0% deals.

Card firms will also be able to see more signs of “high risk” behaviour such as withdrawing cash with a credit card, and big changes in a customer’s credit limit.

The sharing of this additional “behav-ioural” information will conclude a two-year project overseen by Apacs, the UK payments authority, to help lenders better judge risk.

However, consumer groups warn the move – the first change for more than a decade – could mean more customers are denied credit.

Steve Willey, head of credit cards at Moneysupermarket, the price-comparison site, said: “Though this information is meant to help lenders make more informed decisions, there is a danger they could use it to deny customers who aren’t necessarily a risk.”

Credit-card providers such as Barclaycard, HSBC and others have already tightened their lending criteria in response to the credit crunch by asking customers who don’t use their cards to justify why they need them.

Lloyds TSB charges some customers a £35 “inactivity fee” if they have not used their cards in 12 months.

Equifax said its latest survey, conducted just before the credit crunch, showed a 10% increase in the number of credit-card rejections over the past year.

Neil Munroe at the credit-reference firm said: “Minor misdemeanours, such as missing a telephone-bill deadline, which may have been overlooked in the past, may not be now.”

Although the “behvioural” information will be made available in the next couple of months, some industry insiders say it is already being circulated under a “principle of reciprocity”, where banks will pass information between each other if another bank is prepared to disclose a similar level of information.

Here we answer your questions.

What information is currently kept on me by credit reference agencies? The number of credit cards you’ve applied for, when they were issued, when they were closed, the balance and whether or not there were any missed or late payments.

They also hold information about how many bank accounts and loans you have, what your credit limit is, how many times your credit file has been checked by lenders, and any county-court judgments against you.

What information is kept on me by my bank? Banks have more detail about the way you use cards. This behavioural data includes how much of a balance you pay off each month, and how often you use your card.

So is that why Egg could throw out customers who had a good score from the credit reference agencies? Yes. There is no guarantee you will have a good credit score with your bank even if a credit-reference file labels you as low-risk. This is because lenders have their own rating system which uses “behavioural” information. It will also weigh information differently from credit-reference firms or other banks.

What will the new initiative mean in practice when I apply for a card? A lender you have never used before will now have a better idea of the way you use your card and could, for example, decide it does not want to offer a card to a customer who simply makes use of promotional 0% deals, or pays off their balance in full each month as this will not make them any profit.

Isn’t data sharing against the rules? No. Sandra Quinn of Apacs said: “When you sign up to a credit card, you are giving permission for the firm to pass on this information to other providers.”

Could I be thrown out? Banks could cancel your card even if you have a good credit rating on your file if they don’t like your behaviour. They do not have to explain why or give details of the score they hold for you.

Alternatively, a bank could reduce your credit limit if you do not use your card enough or if you hold a number of cards.

If your credit limit is reduced, a bank is unlikely to demand you pay off the balance above the new limit. Instead it will gradually reduce your limit as you reduce the balance on the card.

If your card is cancelled, the lender will stop allowing you to make additional purchases on the card. It will allow you to continue making payments to reduce the balance until it is settled.

Future AORs will include a few late payments made strategically. Wouldn't it be ironic if the 800+ FICO crowd now turns to subprime borrowers for authorized user status?

I think LOSARTWORKS from creditboards wrote that up, He's an idiot, chicken little type of guy.

whenever I get those letters I just call my cards up and say no and they cancel the increase. Then they apologize for the mistake.

Very interesting article, green for OP.

Glitch99 said: All the PIF and 0% promo chasers allow the banks to carry their credit card 'investments' at a much higher value. Eliminate these low-risk customersYou have a point, but it's important to note that while PIF customers are "low-risk", the "gamers" who chase promo rates are not, statistically speaking.

The OP's piece makes the plausible point that BofA is looking for new profits in light of its newfound financial struggles. Finding ways to weed out gamers would surely reduce those costs. While I very much hope they don't grow more focused on/effective at hunting "mistake-free" gamers, I won't be surprised if they do.

win333, having 20 cards doesn't mean one is a gamer. I know plenty of women who have more than that because of department store discounts and the like, and others who are boomers or post-boomers who've gradually collected a card or so every year for 30 years.

It's certainly true that if CC companies decided to curtail this behavior, they could. If they did so carefully, they could weed out those least likely to be profitable. It will be interesting to see if they devote more energy to doing this.

DaveHanson said: Glitch99 said: All the PIF and 0% promo chasers allow the banks to carry their credit card 'investments' at a much higher value. Eliminate these low-risk customersYou have a point, but it's important to note that while PIF customers are "low-risk", the "gamers" who chase promo rates are not, statistically speaking.I understand your point, but I think my point was a little different. This and most other reports involve standard rates only; no one has had their promo rate ganked from them without good reason.

I know this agrument can be picked apart, but I figure that those with 0% promos can be considered "low risk" by default, since a single screw up means they immediately drop out of the 'promo-rate' group and into the 'default-rate' group. So as long as a promo rate is being maintained on the debt, that debt can always be valued as "low-risk" due to a much lower chance of being written off - I assume that very, very few accounts go from a 0% promo directly to a bankruptcy discharge/write-off without first spending some time at standard or default rates.

Of course this means that, once the debt moves from a promo rate to a standard/default rate, the risk will inherently go up and the value adjusts accordingly. Which would explain why the banks are always hungry to offer more accounts/promos even to existing customers, so they can continue to maintain a stable 'low-risk' portfolio. Just my own little theory, and involves corporate accounting gimmicks more than true risk evaluation, but I think it makes for a good explanation of today's credit environment.

Why else would an issuer close someone's accounts but let them keep their promo rates, then let them open brand new big limit accounts and do it all over again with new promos? If your large balance shifts to a standard/default rate they dont want you to be able to add to it (because it is now 'riskier' debt), but if you pay the balances off they'll gladly throw huge promo balances at you again and again.

DaveHanson said: win333, having 20 cards doesn't mean one is a gamer. I know plenty of women who have more than that because of department store discounts and the like, and others who are boomers or post-boomers who've gradually collected a card or so every year for 30 years.

It's certainly true that if CC companies decided to curtail this behavior, they could. If they did so carefully, they could weed out those least likely to be profitable. It will be interesting to see if they devote more energy to doing this.

There you go AGAIN, twisting the point WTF. We aren't talking about Fing store cards, please show me 1 single post of important information you've added in the last year. Please do!

Are you LOSARTWORKS reborn on FWF? Or just his brother!

Win333, please check your tone. DH is a well-respected (and well-known) member of the FWF, and coincidentally happens to make a good point. Unfortunately, your lack of understanding prompted your response. While it is true that SOME of the cards one applies in-store may be of use only in the stores of the particular chain, other "store cards" may be co-branded Visa/MC/etc and as such would show up as regular CCS on one's credit report.

Moreover, some people who apply for lots of credit cards may be very profitable to CC companies, especially if they apply to get a store discount but then take their time paying back while being charged regular rates

DH> it's "ad hominem" , but the point is well taken.

win333 said:


There you go AGAIN, twisting the point WTF. We aren't talking about Fing store cards, please show me 1 single post of important information you've added in the last year. Please do!

Are you LOSARTWORKS reborn on FWF? Or just his brother!

Economist said: Win333, please check your tone. DH is a well-respected (and well-known) member of the FWF, and coincidentally happens to make a good point. Unfortunately, your lack of understanding prompted your response. While it is true that SOME of the cards one applies in-store may be of use only in the stores of the particular chain, other "store cards" may be co-branded Visa/MC/etc and as such would show up as regular CCS on one's credit report.

Moreover, some people who apply for lots of credit cards may be very profitable to CC companies, especially if they apply to get a store discount but then take their time paying back while being charged regular rates


DH> it's "ad hominem" , but the point is well taken.

win333 said:


There you go AGAIN, twisting the point WTF. We aren't talking about Fing store cards, please show me 1 single post of important information you've added in the last year. Please do!

Are you LOSARTWORKS reborn on FWF? Or just his brother!

This is exactly the stupid crap i'm talking about. This is what dave does when he feeds this stupid emotion about credit cards will be dead or B* is dead or 20 Fing store cards, when we're talking about major credit cards.

Economist, I know OF HIM. So I asked please show me some good info, but he didn't.

I'ts hard enough to explain to a newb how all this works thru posting, Then someone who obviously just wants to hear himself talk posts more crap to keep the NEWBs from getting to the truth.

When someone posts crap like this it helps noone and to say " well maybe your right" because a STUPID article from an idiot who wouldn't know what WE do to save his life.

B* is dead
0% offers are dead
A/A doesn't happen because of stupidity (A/A can happen, but we know when to expect it)
BofA is unfair ( they're fair to me, I have 97,000 in lines with them and my scores were under 700 and as low as 630)
AMEX sucks (well really they do.)

So why does the GREAT DH think that a reporter knows ANYTHING about the credit card game? Oh it must be because of 45 letters compared to 40,000,000 accounts RIGHT?

I found this site about 1 year ago and didn't return until I was desperate. I must have come across some STUPID thread like this one, instead of coming across a thread like the good ones here.

Economist YOU obviously don't understand, I don't care about WHO DH was. Who is he know, I see nothing important in ANY of his posts. Please prove me wrong, I'll be the 1st 1 to learn all I can from anyone unless all that person is selling is FEAR.

So Please search all of 2007 posts and try to find me 1 where DH wasn't scared to death of the AOR game. Maybe I've missed his posts, I'm not real good at finding things here.

This thread has already gone way to far, because of 45 letters. Even if it's 45,000 letters, who cares WE know better and WE know how the game works.

OP should have just posted this in the FINANCIAL MYTHS thread!

Only desperate because I didn't know about B*, not because applying for 0% was new to me.

Some stupid reporter writes a stupid story (everyone will say their score didn't drop) and Dave jumps out of the woodwork to say how we should becareful cause creditors are tightening up.

He also tried this crap after SIS posted that A/A=stupidity. So sorry SIS didn't just get off the boat.

Please just 1 post of good recent info, or just let it go. 1 post of good info should be EASY, even if the post is just patting someone on the back. Is it that hard to find 1 post where he isn't discussing how creditors have gotten tighter with credit.

I have not found 1 single creditor that has gotten tighter, but SOME people just want to spread that crap for NO reason. You show me 1 stupid BofA article and I'll show you 100 AORs but Dave will still say " well their getting tighter".

The next person WE scare away from doing an AOR might be the next 1 to figure out the NEXT BIG SECRET LOOPHOLE.

DaveHanson said: Glitch99, it's easy to forget how atypical the promo/arbitrage crowd is from most CC users...including those who take 0% offers. Many users of such offers grab them because they're already facing high interest debt. Many of those see this as a way out...then they (often) mess up at some point, and are in as bad or worse shape than before.But that was pretty much my entire point regarding BrilliantPebbles' Times article and your comments regarding "hunting down the gamers" - Alot of people are in fact using the promos to 'delay the inevitable', and as they continue loose the promos (either it expires and they cant roll into a new one, or they simply screw up) the lenders risk profile is increasing. Even though they are boosting standard rates across the board to help mitigage the inevitable losses, lenders CANT weed out the 'unprofitable' customers (or "mistake-free gamers" as you put it) right now. It is those high-balance promo-rate accounts and PIFs - the ones that are supposedly unprofitable - that are preventing massive asset writedowns that would/will dwarf the current mortgage 'crisis'. Alot call it preditory lending, obscene profits, unfair rates, milking a captive borrower, whatever the buzzwords of the day are; I think the banks are scared of what the future holds - they arent trying to juice profits, they are just trying to maintain enough liquidity to prevent another meltdown.

You chopped off the second part of my statement about closing accounts then approving new ones - its not miscommunication between departments; its because they are happy to give you a $30k 0% BT, but if you are going to default, or even carry it at a standard rate (ie making it a 'riskier' debt), they dont want it to get any bigger. But pay it off, and they'll gladly throw another huge promo at you. The marketing department may not know what the risk mitigation dept is doing and vice versa, but it is those charged with overseeing BOTH of these departments that are steering the ship.

i sent them 5-10 secure messaging emails asking for reduce APR. now if 10 million people do that they might get the picture

DaveHanson said: win333, having 20 cards doesn't mean one is a gamer. I know plenty of women who have more than that because of department store discounts and the like, and others who are boomers or post-boomers who've gradually collected a card or so every year for 30 years.

Hey Dave,

How does your wife feel about you checking out other women's cards?

Economist said: I'd disagree with that. Unless you reallocate limits and do the complete around 100% overall utilization, doing what you suggest with single cards may bring up swift adverse actions from the same (and other) banks. Even if you do 100% util, it's possible to see a lockstep as banks would lower your CL every time you pay a balance down...

tuphat said: Hard to extrapolate a trend, but I'd say this supports an AOR / 0% BT approach of maxing out the credit line, vs. lowballing to conserve utilization. Once the line has been drawn against at 0% FIXED, the contract typically doesn't allow for modification of terms absent some other event, e.g., default, missed payment.

I think his point was " once you have the $$$ who cares " fix it after you pay off the AOR.

DaveHanson said:
MoreMonies thanks for the chuckle. My wife probably figures I'm odd enough that I can't help checking out other women's cards , and if that's all I'm checking out she probably doesn't have a lot to worry about.

Okay admit it, how many of look at the credit card of the person in line in front of you to see what they've got? Sooo many people with sub-prime cards.

mhesidence said: DaveHanson said:
MoreMonies thanks for the chuckle. My wife probably figures I'm odd enough that I can't help checking out other women's cards , and if that's all I'm checking out she probably doesn't have a lot to worry about.



Okay admit it, how many of look at the credit card of the person in line in front of you to see what they've got? Sooo many people with sub-prime cards.

Most Ignorant people have store cards, because they just don't know any better. oooh 10% of 50 dollar purchase, where do I sign. Not knowing that they could have gotten 25,000 miles or something worth while and 0% to boot.

someone needs to get off the freaking med.