It makes sense for a credit card company to base a card holder’s financial responsibility on their ability to make payments in a timely fashion. By keeping up with payments, credit card holders were once certain to keep a good, stable credit score. With the struggling economy, however, credit card companies are prying into your life more than ever before. They are now studying where you swipe your card and what you swipe it for to judge if your spending is risky, or more importantly, if you are going to be able to pay the bills you owe. Credit card companies have found, by closely examining their customers’ credit card use, they are able to get a better read on customers’ financial stability. Credit card companies are also diminishing your credit score based on charges they see as irresponsible or those that foreshadow financial problems. Credit card companies post red flags for charges that may indicate customers are being careless with their credit. Below is a list of certain items you should think twice about before charging to your credit card.
1) Traffic Tickets: No one is perfect, but showing off a traffic ticket to your credit card company is not a smart move. Do not give your credit card company the idea you are irresponsible or you exhibit risky behavior on the road. Traffic tickets have the effect of raising your insurance, making a credit card company think financial troubles may lie ahead.
2) Tire Treads: Also car-related, charging treads for your tires may alert your credit card company that you are looking for the easy fix. If you have always bought new tires, but now decide to simply get treads to save money, your card company may assume you can no longer afford your former purchasing lifestyle.
3) Bargain Stores Shopping Sprees: Speaking of your former purchasing lifestyle, it may be true that in this tough economy you may be unable to afford the luxuries of your former “glory days.” Stores like Wal-Mart and Dollar Tree have come in handy for people trying to shop smarter by getting everyday basic needs at a fraction of the cost; but, do not swipe your card in one of these stores. If a credit card company starts seeing frequent charges to stores like these, they will worry your income is unsteady.
4) Casino Chips: Using your credit card in a casino, or worse, taking out cash advances at a casino, sends signals of impulsiveness and irresponsibility. The same goes with charging lottery tickets on your card, which is allowed in 12 of 46 of our country’s lottery states, not mention online gambling websites. No credit card company is going to extend credit to you if you gamble it away.
5) Alcohol Purchases: An alcohol purchase here and there may not hurt your image with your credit card company; but, frequent charges may warn of instability in your life. You would not want your card company to assume you are washing your financial worries away through frequent binges.
6) Marriage Counseling/Therapy: Marriage troubles can indicate actual or potential financial problems. You should not charge counseling sessions as they could make your credit company feel uneasy.
7) Bills & Income Taxes: Swiping a credit card for a monthly bill or for income taxes is a red flag to the credit card company that you have insufficient disposable income. Charging recurring expenses may show you lack money management skills.
Charging the seven items above may show your credit card company you are financially unstable. Arguably, your credit card company is unjustifiably prying into your personal life and is making hasty judgments based on a card’s magnetic strip. Be that as it may, card companies are starting to see these charges as indicators of how they should determine your credit score. So, be wise – steer clear of charging the above items on your credit card and pay in cash.