MEMPHIS (WMC TV) -- If it's a vice, a violation or a sudden change in your spending habits, don't put it on your plastic.
Dr. Robert D. Manning, research professor and director of the Center for Consumer Financial Services at the Rochester (NY) Institute of Technology (www.creditcardnation.com), said in this recession, credit card-backers are pouring over your statements, looking for "merchant codes" that are clues to your buying patterns.
Manning said the banks are looking for either a change -- or something strange - that screams you are a credit risk.
"They could terminate your account," Manning said. "They can slash your line of credit, which could have an adverse effect on your credit score."
Here are Manning's 5 Credit Card No-No's:
* TRAFFIC TICKETS. "They indicate high-risk behavior, plus the fact that you can't pay the penalty with cash or a check," he said.
* DISCOUNT/DOLLAR STORES. Manning said charging purchases at these stores are a risk if you recently shifted your shopping to discount retailers.
"The fact that you're suddenly shopping at cheaper stores implies you're going to have difficulty paying your bills," he said.
"I think the consumer is a lot smarter than that," said Dave Mueller, senior vice president for sales and marketing for Fred's Discount Stores (http://www.fredsinc.com/). "The consumers are starting to recognize that, and we will probably see a shift to debit cards or to more cash."
* INCOME TAX RETURNS. Manning said charging your tax service fees to a card that will, in turn, add finance charges implies you're in financial distress.
* REPEATED LIQUOR PURCHASES. A sudden spike in liquor swipes on your card tells the bank you're trying to drink away your troubles by adding alcohol to your credit debt.
* PORNOGRAPHIC WEB SITES. Again, high-risk behavior paid with credit instead of cash.
Charles Dempsey, executive director of the Memphis Consumer Credit Education Association (http://www.mccea.net/index.php), is a former manager of credit portfolios. He said the banks that back credit cards are not watching what you're charging.
"The only thing they're watching is that you stay in the middle of the road," Dempsey said. "You're not exceeding your limits, that you're not past due, that you're staying within the limitations of what the card says."
"That was the view before the crisis of the great recession," said Manning. "What's happening now is banks are so risk-adverse that they are more inclined to lose a good customer...if it means that they are going to catch somebody who may default on their credit card."
Credit experts recommend you limit your credit card use to online purchases or big-ticket items, like appliances or electronics, so that you can benefit from your card's built-in protections that insure those purchases. You're never liable for more than $50 of a disputed charge. Most cards offer zero liability as a feature to attract customers.
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