A couple of weeks ago, I was driving in my car listening to NPR. There was a very interesting story on credit card companies using data profiling to determine credit limits or whether if the card holder should continue to have the card at all.  What is data profiling? It is when the credit card issuer uses your credit card transactions to project what may be happening in the larger scheme of your life.

For example, you shop at Macy’s, Lord and Taylor, Saks Fifth Avenue but now you start to buy things at Walmart and the dollar store. That is a red flag to your credit card company. Have you lost your job? Are you cutting back on your spending? When you charge alcohol, visits to the spa, or visits to the doctor, the credit card company may see these transactions as a sign that you may be stressed as a result of  a declining financial situation. The credit card company may react to your changed habits by reducing your credit limit or by closing your account.

I spoke to someone who said, “I never do these things! It will not be a problem for me!” To that reaction, I will respond by sharing a personal experience. Our local health center had a copy center that was used as a community development venture. It provided photocopies, graphic design services, and graphic art training to the youth of Dorchester. As an entrepreneur and community supporter, I frequently used the center to copy materials for my business.  This was at least a monthly venture. When credit regulations started to change, my business credit card company cut my line by 60 percent.  Even though my bill was paid in full each month, I now suspect the cause of the reduction in my credit line was that the copy shop charges were defined as health care transactions by my credit card company. I must have appeared to be quite ill by the amount of some of the charges.

In case you are wondering, the copy center closed. I continued to support them until the end.

You may ask " What transactions are monitored?"  Here is a list of 10 things that you should never charge:

1.   Counseling and health related services (Marriage counseling in particular)
   
2.   Alcohol (package store or bar)
3.   Traffic ticket payments (slow down, park right)
4.   Lottery tickets and casinos
5.   Income taxes (make a payment plan with the IRS)
6.   Retreading tires
   
7.   Dollar stores and Walmart (especially if youhave never charged there before)
   
8.   Spa and luxury treatments
   
9.   Cash advances
   
10.   Adult toys
    

You should review the transactions on your credit card for the places you frequent to make sure they do not violate the "no no" list.

How do you pay for these items and services? Cash or Debit Card.  Although your debit card may look like your credit card, it is actually cash and is not monitored by credit card companies.