Most financial institutions already are signed up for services from Experian, Equifax or TransUnion to know if you default on another credit card accounts. There have been numerous articles about how when you default on your Chase credit card account your name goes on the “credit card blacklist” and then Citibank decides to raise their interest rates on your Citi Card to 39% based on your Chase default. (You didn’t know this? Welcome to the world of credit cards.)

Although credit payments and charges monitoring services have been around for awhile (you may have gotten a call from your credit card company making sure that that $1500 clothing purchase was legit) – most financial institutions sign up for balance monitoring services for their own accounts. For instance, Bucher Group is a company that monitors account balances for their clients. From their website at buchergroup.com:

It is important to maintain a constant vigilance of your customer base to better protect against possible future credit losses and deterioration in payments. This is especially true during uncertain economic times when you need to know if any of your customers are headed into serious financial distress. Knowledge is power, the more you know about your customers the better you can meet their needs and protect your interests.

The difference between a private company offering credit monitoring services to a credit card company like Citibank and the service Experian (called Experian’s Account Monitoring Services) will be offering is huge. They will reporting payment trends on ALL of your accounts to a SINGLE lender.

Let’s say your car needed expensive repairs and your kid got braces in the same month. Because of this you decided, just this ONE time, to make the minimum payment (on time, by the way) on your Chase card, instead of paying in full. Citibank gets wind of the fact (through Experian’s AMS) that instead of your usual habit of paying in full, you made the minimum payment. They decide you are now a risk, and raise your interest rate to 39%.

Think it’s fair? Or do you think this is a trick question?

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