Credit card companies profiling users

Cardholders have been hit with credit limit reductions, interest rate hikes, or have even had their accounts closed by issuers who made the decisions based on tracking a customer's spending and loan data.

According to FOXBusiness.com, negative account changes were triggered by a number of practices including the location of where the transactions were made, the identity of the merchant processing the transaction, the type of transaction and the identity of the mortgage lender.

The Federal Reserve Board issued a 72-page report on the matter and was quick to point out that this phenomenon was rare among credit card issuers. But, this is the first official glimpse at the credit card industry using behavioral modeling on its customers in an effort to determine whether or not a customer will default on credit card loans.