Posted on March 22, 2009 at 4:34 pm Recently, I read an interesting article that indicated you can get a bad credit score when you use your credit card for necessity purchases i.e. food or gas, etc. According to this article, credit card companies view such use of credit cards for daily purchases, as a sign that you might be financially strapped (or without a job) and might not be able to repay your debt. The theory is that you would use petty cash ordinarily for daily expenses if you had it, instead of borrowing from the credit card company. In such a case, they can increase your interest rates. Have you heard about this?  Have you noticed that your credit card company penalizes you for small daily purchases? And, how is this affecting your over all plan for credit card repayment.    

Posted on March 23, 2009 at 12:36 pm It's a new thing and I'm sure it's a surprise for many.  The new practice of credit card companies has a lot to do with the failing US economy. They didn't do this ten yeas ago, so it's a recent development.  Just to be safe, you might want to check your credit report.

Posted on March 23, 2009 at 5:10 pm When I left a relatively decent job and couldn't find another one to replace it, I resorted to a credit card.  I paid for food, and gas as well as winter clothing for the family, because I had no available cash.  That was my mistake, never should have done it and never will repeat that mistake again.  The importance of having an emergency fund...reinforced!

Posted on March 23, 2009 at 7:04 pm I don't see how they could take away from your credit score if you are merely paying for day-to-day things because you do not like to carry cash or because you are building your credit. You could easily hop around town and use your credit card all day, and then come home at night and pay the credit card company online with a checking account, for everything you just bought that day.

Posted on March 23, 2009 at 8:48 pm Hey! I agree with you all that using a credit card on daily expenses shouldn't make a difference. And, I wish that it weren't true. But, economic times have changed. Think about the logic of credit card companies hiking your interest rate or reporting you for this type of activity. It just makes sense from their point of view. If a person can't even afford to pay for a pack of gum without using a credit card, they must be in dire financial straights. I'm not a big fan of the companies that are doing this. But, beware cause they are out there. Like it or not, you could be messing up your credit by paying for these daily items. Of course, I don't think that applies to the gas credit cards as those things are designed for that purpose.  All this comes from a pretty reliable source. 

Posted on March 24, 2009 at 2:56 am That's my first time hearing about something like this and all I have to say is that is somewhat outrageous.  It shouldn't matter what we use the credit card on as long as we are paying it off.

Posted on March 24, 2009 at 5:46 am I agree with fullscale, how do they differentiate between a "daily purchase" and a substantial purchase? How would they differentiate between a daily coffee and breakfast from the gas station and an emergency when you travel to the gas station to get a first aid kit? It seems like this would require a very time consuming transition of how each store that accepts credit cards is coded, and also likely to cause a lot of disputes. If it IS true, and they have put the time and employee efforts towards something like this, frankly I think it is a poor use of their resources.

Posted on March 24, 2009 at 2:33 pm It's just something that I read in a local publication. And, I'm pretty sure that it's true. But I am hoping, fingers crossed that it's just a rumor. But you know how these things go. I think it's something that credit card companies have started doing here in the US cause of the high job loss rate. They are worried that unemployed people will start using their credit cards to live off and then not have the money to pay back. So I guess it's in their best interest to penalize folks. But it's just dumb if you ask me!And, unfair. And I don't like it. Reminds me of price gouging on gas and food supplies during a hurricane. That's illegal and this kind of behavior should be. If anyone notices an interest hike after recent job loss, complain! Or report it to your local attorney general.

Posted on March 25, 2009 at 9:44 am Those are good ideas. I don't see how this could be legal. It is most definitely a form of price gouging considering the economic state we are in.

Posted on March 29, 2009 at 12:01 pm And, I agree with all of you! It shouldn't be legal.  It may not even be legal.  But some credit card companies are using this practice.  It's just one of the new ways credit card companies are making money in this very bad economy. They have maxed out their ability to get consumers to accept high interest rates, so now they are going to be unfair about the process. From what I've heard, the government is enacting new laws by 2010 that will stop some of these shady deals and borderline illegal (unscrupulous) credit lending practices. Credit card and loan companies have received free reign for far too long to make up their rules as they see fit. And, basically they can legally do anything they want as long as they give you 15 days written notice. This is just one of the sneaky tactics that credit card companies use to scam you out of money. There are so many others! These companies are predatory sharks and prey on unsuspecting consumers who are cash strapped but still wish to make purchases. I wrote about this subject on my Destroy Debt blog: Sneaky tactics your credit card company uses to cheat you out of money