Using credit cards seems simple enough – you apply for them and they come in the mail. Easy. Now your off to shop… But wait! There’s more to it than just pulling out that plastic and buying the things you need. As you delight in making those purchases, your credit card company could be making decisions about you based on what you buy and where you purchase it.
Are You a Credit Risk?
Let’s examine that question. American Express, amongst other credit card companies accumulate data on everything you buy using their credit card – from the coffee you purchased at Starbucks this morning to the used tires you purchased last week. Credit Card companies aren’t concerned with what you bought, primarily they want to know what type of establishment the purchase was made at.
This data is used to help Credit Agencies determine whether you are a risk to them. The purchases you made for those second-hand pants, Casino betting, and the bag of cleaning supplies you got at the Dollar Store are possibly an indication to your Credit Card company that you may be in some type of financial distress and as a result, you may miss a payment in the near future. This in turn could cause your credit limit to be lowered and in the worst case scenario, canceled.
Other Factors determining Credit Worthiness
Besides your spending habits, there are other factors Credit Card companies are suspected of using to determine whether you are worthy enough to obtain or keep their plastic. Where you live, your nationality and how much you make annually could also affect your credit. American Express has already acknowledged it used information about where customers shopped to lower credit limits. After much criticism and outrage earlier this year, AmEx announced it would no longer engage in the practice.
Representatives from the four top credit card issuers — Bank Of America, CitiBank, Chase and Wells Fargo declined to discuss details of how they use purchasing data internally. Many consider this highly proprietary information. However, a spokeswoman from a banking industry trade group acknowledged that the practice is indeed common.
Why Credit Card companies track purchases
There are important reasons why credit card companies accumulate data.
Marketing. Credit Card issuers use previous purchase data to predict what additional products and services you might be interested in buying. So for example, that if you charge a lot of travel expenses, they could offer you discount hotel and airline offers.
Risk management. Most large companies practice some type of risk management and your credit card company is no different. Card holders that make a practice of going over their credit limits or suddenly display shopping habits that are out of their norm (like taking out large cash advances) against their limit could indicate to the card issuer that the consumer may soon default in payment or be on the verge of bankruptcy.
Fraud detection. This is an important safeguard to prevent you from being a victim of credit card fraud. Credit card companies look at patterns in the way you shop and anything that deviates strongly from this will be flagged as suspect by the card issuer. In many cases these types of purchases will result in a phone call from the card issuer to verify charges.
Law enforcement. Law enforcement agencies use the information collected by the credit card companies as well as merchants to enable them in solving cases such as missing persons and credit card fraud. Some might argue this is an invasion of privacy, but we think it is one of the better uses of credit reporting.
A Looking Glass Into Your Spending Habits
Each and every transaction you make is processed by all the credit card networks and is assigned a merchant category code (MCC for short), this is a 4-digit number that tells what type of business is providing a service or selling merchandise. You can find a complete list of codes here. These codes allow credit card companies to see what your spending your hard earned credit on.
Where privacy is an issue
Most consumers aren’t aware of credit data collection – whether they are shopping online or locally, and it’s uses at the hands of their card issuers. Personal privacy and credit management are two important issues that should be in everyone’s mind.
Cash is always the best protector in keeping your credit clean and your transactions private. However, if you’re like me, paying with cash is not always the most practical or a readily available means of payment especially while buying online. In this case, I would recommend using a pre-paid credit/debit card or gift cards as an alternative to using a credit card as these types of purchases are not recorded by your credit card company. Online payment services such as Paypal, Amazon Web Pay and Google Checkout also offer online shoppers a means to pay for their items without repercussion from the credit networks.
Using one or more of these alternative payment methods is something to seriously consider, especially when that purchase is one that Visa, MasterCard or American Express deems a risky transaction.
Fighting Back
The most recent credit card reform law signed by President Obama includes a provision that requires federal regulators to investigate whether credit card companies use information about where consumers shop and what they purchase as a basis for limiting credit for individuals.
Something is being done to protect you and I, and to stop the wayward practices of the big credit card issuers from continuing their abuses of the past. In the meantime, all consumers need to become more aware and do all they can to protect their own credit
Have you experienced a reduction in your credit based on past purchases or your location? Leave us a comment.
October 11th, 2009
Greetings,
Wow, October is here and it’s already starting to get cold. Yan mentioned he had to turn on the heat, not for Buxr, but for his house. Well we are not here to talk about the weather, instead lets chill-out and relax as we go over this month’s contest results and some new feature announcements that we are sure you’ll like.
First things first, let’s go over this month’s contest results:
1st place: Solstice 2149 Points — $25
2nd place: chinnam 1967 Points — $25
3rd place: redsoxrokk 1859 Points — $25
4th place: HouTex 1856 Points — $25 + mousepad
5th place: arzkar 1737 Points — $25
6th place: steve_05 1731 Points — $25
7th place: midget 1702 Points — $25 + mug
8th place: kldpm 1650 Points — $25
9th place: emma123 1546 Points — $25
10th place: jack69darin 1395 Points — $25
11th place: pablos17 1341 Points — $25
12th place: MrCheap 1229 Points — $25
13th place: thriller 1186 Points — $25
14th place: vedlon 1127 Points — $25
15th place: kris0908 1089 Points — $25 + mug
Some of the remaining winners will receive Buxr Swag:
16th place: JackBauer 1020 Points
17th place: onkarkulkarni 982 Points
18th place: vinhdanh 936 Points
19th place: llocomotive 922 Points
20th place: mrpopular 898 Points — mug
Thanks to all of our winners and everyone for the great contributions you’ve made to the community!!
Refer a Friend Contest results:
We have no winners this month for this contest since you guys seem to have no friends. Perhaps you can make friends on the site? Yan, can we get a “make a friend” feature on the site going? 
Don’t forget to request payment!
Just wanted to remind everyone that in order to get paid — you have to request it. Your prizes will be logged as usual in the ‘My Activity’ section of the contests page, but now you will need to go to the (newly added) ‘Balance’ section and request a payment when your balance reaches $25.
Cool New Awards!
We’ve implemented some cool new contest awards last month and users seem to be embracing these awards while maximizing their prize winning chances.
Highlighting your own deal is a popular award:
Members also love awards like voting for your own deal and removing a deal from the contest. Remember, every gain of 100 points will result in a random award given to the member.
If you are a top contributing member to the Buxr community, people should know about it. So show off your community accomplishments with our sexy new badges! Every time you finish the monthly contest in top 3 you will gain a ‘golden’, ’silver’, or ‘bronze’ badge displayed under your avatar. This is one more sign of recognition of your achievements (in addition to your title)
Keep your eyes-peeled for some more cool Buxr community badge bling!
We’re blogging baby!
Our first guest blogger debuted this month, with a great post about bargain hunting this Halloween! If you are interested in becoming a Buxr blogger, please check this out!
Here comes October:
October is exciting month for us because it means we are rapidly approaching the big holiday shopping season. This should be a real test for Buxr and the community. We are hoping to see all of you here spreading the word about the site and posting those hot deals.
Thank again,
The Buxr Team!
September 30th, 2009
It’s almost Halloween and once again we scurry to find the best costumes for ourselves and the kids. Kids go trick or treating and the adults go off to late-night parties. While Halloween is always fun, prep can be costly and just a little bit stressful. Below are some tips to help you save money and have a freaky good time.
Halloween fun on a budget
One of my favorite Halloween treats are caramel apples, but don’t buy those pre-made apples, save money and make them yourself instead with this recipe from Kaboose. The site is also chock-full of clip-art, games to play, crafts that you and the kids can do together and even holiday printables you can have the kids color and hang up on the wall and fridge. Not enough? Check out this Buxr discussion for even more great ideas.
Pumpkins are a big part of the Halloween tradition, whether you use them to make delicious pumpkin pies, as decoration or as a craft that everyone in the family can enjoy doing together. You can of course buy pumpkins at your supermarket, but I’ve found them to be cheaper at a local farm or pumpkin patch. Once you get your discount pumpkins, you can carve them with these free pumpkin stencil downloads.
Scary Halloween Coupons
Haven’t got your costume yet?! The last thing you want to do is shop in-store where selection is low and prices are high. Here are some deals to save your sanity and keep some money in your pocket as well.
• Save 20% off any single item at Spirit Halloween
• 90% off Halloween Costumes + $5 off $30 at Shindigz
• Amazon is offering $10 Off Select Costume Orders over $50
• Costume Hub is offering 15% off site wide coupon
• Anytime costumes – $10 off $50, $20 Off $100
With such a wide variety and available coupons, making the perfect costume should be a breeze!
Throwing Halloween Parties Cheap
Parties are big on Halloween and of course you need the perfect decorations, effects and party supplies to make that Halloween Bash a night that everyone will remember! We’ve found a few deals that can cut some of the decorating and entertaining cost.
• Oriental Trading Company is offering 20% off any single item!
• Get a discount piñatas or treat bags at Candy.com!
• Need more drama? Get a cheap fog machine!
If you must shop in-store, try this Party City coupon which will allow you to save $3 off $10 or $10 off $30 purchase.
Stay in, stay safe, and save money
Now I know that everyone won’t be out door to door Trick-or-Treating, so I also have a couple fun alternatives that you and the family, as well as friends and neighbors can do together to have a safer and more affordable Halloween.
1) Host a scavenger hunt for the kids with fun foods and lots of candy! Pool the expenses with other families and save.
2) Check out your local mall. Many malls have a trick-or-treat night where stores participate by handing out goodies to kids dressed for the holiday. This is a safe alternative, especially for young children.
3) Have a spooky sleepover. Get the kids together to watch scary or Halloween themed movies and provide enough snacks and hot chocolate to keep everyone happy.
4) Trunk-or-Treat. People get together in a large parking lot and decorate the trunks of their cars just like they would their front porch and fill the trunk with goodies. Kids then dress up and walk from trunk to trunk instead of door to door. Parents can keep a close eye on their kids and extra fun is added with a costume contest and baked goods served afterward. (Of course this activity will require community participation).
Don’t forget to have fun!
With all these great ideas and resources, your Halloween will be extra special and a night filled with fun and excitement that doesn’t have to be costly.
Do you save on Halloween? What’s your best tip?
September 26th, 2009
Greetings,
The summer heat is almost over but we are still cooking up surprises at Buxr! Yan and I have been sitting in our virtual office, and kicking around new ideas to spice things up for September. The daily and monthly contests have been going great but things are getting a tad bit too predicable. So we are going to shake things up, hopefully in a good way, and add some exciting new opportunities to win not just cash and prizes but unlock hidden new features which help play the daily deal game in new ways. So please read below for more details as to just what I’m talking about.
First things first, let’s go over this month’s contest results:
1st place: onkarkulkarni 216 Points — $100
2nd place: chinnam 210 Points — $100
3rd place: steve_05 209 Points — $100
4th place: arzkar 181 Points — $50
5th place: redsoxrokk 177 Points — $50
6th place: Solstice 175 Points — $50
7th place: TheBest 169 Points — $50
8th place: emma123 164 Points — $50
9th place: kldpm 163 Points — $25
10th place: pablos17 160 Points — $25 + mousepad
Some of the remaining winners will receive Buxr Swag:
11th place: overaged 146 Points
12th place: thriller 143 Points — mousepad
13th place: HouTex 138 Points — mug
14th place: jack69darin 98 Points
15th place: vinhdanh 86 Points — mousepad
16th place: lprjohnny 86 Points – mousepad
17th place: llocomotive 76 Points — mousepad
18th place: vedlon 75 Points
19th place: vectra5 75 Points — mug
20th place: acidreign 56 Points — mousepad
Thanks to all of our winners and everyone for the great contributions you’ve made to the community!!
Refer a Friend Contest results:
We have one winner in the refer friend contest. Congrats to lprjohnny for referring 5 good friends. And as you know, having good friends earns you a $50 reward!
Thanks also to llocomotive who missed this month with 3 friend referrals.
New Contest Rules
Before I get into the new contest rules, I wanted to let you know we are making these changes to ultimately improve participation in all facets of the site. As you know many great deals, coupons, and freebies can be found on Buxr, and we are grateful for that. But in order to take Buxr to the next level, we need great community conversation. So in order to do so, we are changing the monthly contest rules to reward community members who engage in great discussion whether it be in the forums or just deal comments. We are doing this by awarding points for comments and forum topics that receive up votes.
Here are the details:
Deals Point System
1. Winning the daily best deal gives the submitter 20 points.
2. Getting the daily worst deal costs the submitter 5 points.
3. Positive vote on a daily best deal gives the voter 10 points.
4. First negative vote on a daily worst deal gives 15 points, following votes give 5 points to the voters.
5. Negative vote on a daily best deal or positive vote on a daily worst deal costs the voter 5 points.
Comments & Topics
1. Members can gain or lose points from other members voting up/down their comments or topics. Each positive vote gives the submitter 2 points. Each negative vote costs the submitter 1 point.
2. The topic/comment must be less than 1 day old to accumulate points
3. Only members with a total score of 50 points and 5 days tenure can give other members points.
4. In order to prevent friendly voting and voting wars, only your first 5 votes in a 1 day period can earn points when voting for any individual member.
Votes
1. Members can gain points by voting up comments and topics. Each positive vote gives 1 point. Negative votes don’t give points to the voter.
2. Only members with 50 points and 5 days tenure can gain points with their votes.
3. Voting up a new member comment or topic doesn’t earn the voter a point.
Cool New Awards!
Every gain of 100 points will result in a random award given to the member. The awards include:
• highlighting your deal for the contest period
• voting up your own deal
• eliminating a deal from the contest.
We are planning to unleash a lot more awards in the future that unlock all sorts of virtual goodies. If you have an idea for an award, we would love to hear it in the comments below!
Should be an exciting September!
As you can see, there is a lot more to the contest than ever before. We think these new additions add great opportunity for the casual bargain hunter and offer awards to a greater part of the community.
Thanks again for your support, have fun playing!
The Buxr Team
August 31st, 2009
It’s 2009 and sending a check via snail mail is equivalent to going to the record store and buying a vinyl album. Sure it works and you get the same results but in the age of instant gratification this is now looked upon as wasted time. People want to send and receive money instantly and now there are many choices on the net. Among all the options the two most important factors are convenience and cost. In this blog post I’m going to attempt to rank my favorite ways of sending and receiving cash by these factors.
PayPal: Convenience 5 out 5 Stars, Cost 3 out 5 Stars
Let’s start out with the most popular of all methods, PayPal. Whether you love it or hate it, there is one thing about PayPal that makes it so attractive – millions of people already have PayPal accounts. As you will see with other services, recipients have to setup an account in order to receive cash or payment. While this isn’t a huge hurdle, it does add an extra step to the process, and for smaller transactions this might make setting up another account not worthwhile.
Next let’s consider the fees. There are no fees charged for sending cash if you have money deposited in your PayPal account and the recipient has not received over $500 in that month. If the money comes from a bank account or debit/credit card then there is a fee charged to the recipient. If you are sending money as the result of a purchase, there are always fees charged to the recipient. PayPal fees are based on the percentage of the amount sent and an additional flat transaction fee. So for a typical transaction the recipient will pay a fee of 2.9% + a .30 cent per transaction charge.
Amazon WebPay: Convenience 4 out 5 Stars, Cost 3 out 5 Stars
PayPal has had great success because of their convenience and popularity, but their are some pretty big players who are offering competing services. Amazon is one of those new competitors and they might be one of the companies able to rival the number of existing members. Their service is called WebPay and if you have an Amazon account you are half way there. Once you login you still have to configure some preferences and setup a credit card or bank account. Once you are setup you can not only send and receive money via email but you can even send money through your mobile phone.
Amazon is still giving new customers the ability to send money with no fee until September 30th. After that trial period expires Amazon fees will be equal to those of PayPal. For transactions greater than or equal to $10, there is 2.9% + a .30 cent fee per transaction. If you anticipate receiving more than $3000 per month, you get a reduced fee of 2.5% + .30 cents per transaction. Amazon does give you what amounts to a small discount on transactions less than $10 with a fee of 5% + .05 cents per transaction. The other thing worth mentioning is that unlike PayPal, Amazon still charges fees to the recipient if money was sent via stored funds (WebPay is still in it’s early stages, so this may change). So there is really no way to avoid paying a fee with Amazon once the trial period is over.
Obopay: Convenience 3 out 5 out Stars, Cost 5 out 5 out Stars
Obopay is interesting new start-up. With Obopay you can transfer money through the website or mobile phone. If both people are signed up with Obopay, sending money is simple. If your recipient is not an Obopay member, they can still receive it, but they will not be able to claim the money until they register for an account.
Obopay really shines when you look at their fees. If you are sending money from a bank account there is only 25 cent transfer fee. If you are sending money from a debit or credit card the fee is only 1.5%. This is the lowest cost method we’ve found.
MoneyGram: Convenience 3 out 5 out Stars, Cost 1 out 5 out Stars
We’ve mentioned some of the new high tech players in the game, but let’s talk about good old MoneyGram. They started much like Western Union but they offer money transfers that are completely processed online. That being said, MoneyGram transfers are not instantaneous. It often takes at least 3 business days to process a transfer. They do offer same day service but it is expensive. MoneyGram’s real advantage is their worldwide reach. You can send money virtually anywhere around the globe.
And to get that worldwide reach, you have to pay for it. Sending $500 in the US costs around $15 for economy service and $39 for same day service, which is charged to the sender, not the recipient. The fees are clearly very high and probably best for international transactions.
Xoom: Convenience 3 out 5 out Stars, Cost 4 out 5 out Stars
Xoom is somewhat like a cross between PayPal and MoneyGram. It has some of the convenience of PayPal and a lot of the international money transfer capabilities of MoneyGram. Like the others you must setup an account with Xoom in order to send and receive money. For many countries the transfers are instantaneous, for others the wait time is similar to MoneyGram (this really depends on how the recipient wants to receive their money).
The fees for Xoom are very low in comparison MoneyGram. For example sending $500 internationally (to France) was cheaper than sending it state to state here in the good old USA with MoneyGram. The service fees for US to France were only $5 when drawn from a bank account. Again, I think Xoom is a great service but probably most suitable for international transactions.
So what should you use?
Well, it depends on how much you are sending and how effortless you want the transaction to be. If you are sending a small amount of money, I think the Paypal fees are reasonable and you can’t beat the convenience. If you are sending larger amounts, I would recommend funding the Paypal account to avoid fees. I like Amazon fee structure now (free!), but once they start charging fees like the other services in November, I don’t see much advantage of using them. Obopay is promising but it can still be a hassle for the recipient who doesn’t have an account and has to register to access their money. If you are doing recurring transactions with the same people, Obopay is an affordable and convenient way to go.
If you are sending money internationally, I would try Xoom first. The rates are lower and transfers are faster. I would not recommend Moneygram unless you are sending to a country not covered by Xoom.
And finally, let’s not forget the cheapest way to send money… open up your checkbook and mail a check. Not so high on the convenience factor but it sure is cheap if your recipient can wait.
How do you send money? Did I miss anything? Would love to hear your feedback.
August 19th, 2009
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