LUBBOCK, TX (KCBD) - Dr. Robert D. Manning is the author of Credit Card Nation and he says during times of recession, banks look at customers statements for clues about your buying patterns. He says there are five things you should never charge.
#1: Traffic tickets
You should never put traffic tickets on a credit card. Dr. Manning says this indicates high risk behavior and shows that you can't pay the penalty with cash or check.
#2: Dollar/discount store purchases
Manning says you should never charge your purchases at a dollar/ discount store. "The fact that you're suddenly shopping at cheaper stores implies you're going to have difficulty paying your bills," said Manning.
#3: Income tax returns
Manning says charging your tax service fees will add fees to your statement, which implies you're in financial distress. "They could terminate your account. They can slash your line of credit, which would have an adverse effect on your credit score," said Manning.
#4/#5: Liquor store purchases/Pornographic web sites
Lastly, Manning says should never put on your credit card are repeated liquor purchases and pornographic web sites because these indicate high risk behavior.
"Consumers need to remember that it is the institution and not necessary what they are buying that the credit card company actually knows," said Dr. Michael Finke, Associate Professor of Personal Financial Planning at Texas Tech University.
"That was the view before the crisis of the great recession, and what's happening now is banks are so risk-adverse that they are more inclined to lose a good consumer," said Finke.
Finke says some purchases can send red flags to banks, and that's if the consumer is in danger of having their credit limits reduced. "If you go to a marriage counselor or a massage parlor or another type of institution like a casino that may be seen by a credit card company as a higher risk," said Finke.
Your best bet, Finke says is to make your payments on time and pay at least the minimum amount.
To learn more about Dr. Robert Manning's book Credit Card Nation: (click here).
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