A Disturbing Trend In Credit Card Rate Determination

The Federal Trade Commission currently has a lawsuit filed against credit card issuer CompuCredit (CCRT). It’s not about them raising rates because you forgot to make a payment, or because you went over your credit limit.

ComputCredit has been using lifestyle, in part, to determine rates. If you shop at certain types of establishments – a massage parlor, retreading a tire, or visiting a marriage counselor – they raise your rates.

But that’s not even why the FTC filed suit. They filed the suit because CompuCredit didn’t tell you about it ahead of time.

Of course that part is disturbing, but to me the more disturbing part is that my behavior – not just my payment history – can affect the rate I pay for credit. I can conceivably be charged a higher rate based on criteria I don’t even know exists, so there’s nothing I can do to improve it.

I guess I’m making some “credit-friendly” choices, since my score is in the top 1% in the nation. At least it is now. But if this type of behavior-leads-to-risk analysis gets more specific, more in-depth, I could conceivably see my score and my rates plummet despite my excellent payment history.

A disturbing trend indeed.

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