Comments on: What would you do as a Credit Card Company?

By: nautangan

nautangan — Tue, 02 Feb 2010 07:45:37 +0000

Credit card companies have the power to limit to put a cap to the credit line of customers. A prudent person should not give a big credit line to a person who he knew only from the submitted records which most often do not reflect the financial standing and spending habits of the client-customers.

In the collection part, CCs should not hire those law firms which bully, threaten clients with imaginary criminal prosecution and issuance of warrants, and to the extent of humiliating clients before his/her employer, peers and neighbors. What a disgrace this law firms have become.

CCs after referring the uncollected debts to law firms or lawyers should write them off instead of passing it again to another law firm or lawyer for collection. As stated by banker above, they charge this as a loss and lower their taxes. I suspect this CCs are repeatedly referring uncollected debts to different lawyers so they can repeatedly claim it as a loss once they get a certification from the lawyers that the debt is uncollected.

In the end, everyone must act responsibly so the order of society be not imperiled.

By: bubblegum0719

bubblegum0719 — Mon, 28 Dec 2009 03:04:06 +0000

Credit Card companies are earning much! Despite thousands of defaulters nationwide they continue to be aggressive in approving credit card applicants. Credit card business is a high earning business! So who’s to blame???

By: banker

banker — Fri, 18 Dec 2009 02:06:14 +0000

CC companies are not in business to lose.
Although its operation is too complex to
a non-finance man, let me just point you
some insider assessments:

If Cardholders pays in full monthly, they
earn “brokerage” commissions.no sweat.
Unpaid debts over 180 days are classified
as “loss” and 100% provision is required
against it. The accounting process enable
the company to “charge” these and subsequently
lower their tax payable.
The exorbitant charges enables them to recoup their
exposure and operating loses.

CC business is quite different from a regular bank credit operations.so, I wont change those CC policies.

By: Erik Roza

Erik Roza — Sat, 28 Nov 2009 13:26:31 +0000

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By: ms hopeful

ms hopeful — Fri, 27 Nov 2009 03:00:10 +0000

i just wonder, despite the defaults, the credit card companies are still very aggressive , giving perks to cardholders. they must be earning much from those who are paying minimum amount due with the 3.5% interest rate , other finance charges and late fees not to mention the annual membership fee.

By: Estate Taxes

Estate Taxes — Fri, 20 Nov 2009 03:33:02 +0000

If I were in the shoes of these credit card companies, I would be more careful in approving credit care privileges. i would set up higher standards. This is business and we cannot afford to lose big amount of money because of the irresponsible people.

By: Atty.Fred

Atty.Fred — Wed, 04 Nov 2009 02:08:35 +0000

Journey Man, you’ve raised great points, some of which are similar to that of warrior (so my reply there would also apply here). Again, to take the other side for the sake of argument:

“they should not issue another card to a person who was approved by the other company.” — Each one has an approval process. If a person was approved by another credit card company, then it’s sasfe to assume that he/she went through the screening process of that company. And passed. If the same person satisfies all the requirements of other card companies, then there’s no reason to deny a new card to them.

“Now who will be BLAME for the rising cases of DEFAULTER? Is it the person or the credit card company also?” — Could we say that a credit card is just like, say, food. Some eat a lot, but don’t get fat because their metabolism is fast. Some spend a lot, but they have tons of money so they could pay. Some have no control over what they eat, and they grow obese and probably die, Some overspend, without checking if they have the capacity to pay for it at the end of the month. (I must say, though, that we all go through a point when we have no choice but to use a credit card for emergencies. In these times, you hardly think whether you’ll be able to pay at the end of the month).

“They should give chances to a person who fails to pay but agreeing to re-strusture payment cheme.” — I could personally tell you that, yes, they do give chances to re-structure payments.

By: Atty.Fred

Atty.Fred — Wed, 04 Nov 2009 01:55:37 +0000

warrior, by way of taking the role of a devil’s advocate, it may be true that the intense competition may have resulted to leniency in approving credit card applications. On the other hand, many of those who defaulted have the capacity to pay — if they control their spending. We all have the tendency to overspent on a particular point. Paying in cash means we see our money running out. Not so with credit cards. It’s an accumulation of little charges. A nice bag. A nice shirt. A nice motorcycle. Determining who are most likely to overspend would probably require some psychological testing. More expensive and cumbersome process…unless you have some criteria in mind.

By: Journey Man

Journey Man — Wed, 04 Nov 2009 01:08:55 +0000

If I were in the shoe of these Credit Card Companies, I will change the criteria and be more careful in approving credit card application. They are VERY GOOD when offering their credit card their agent will help you falcify documents and insist until you finally approved. Then after expect other credit card company to offer again.

These is their BIG FAULT, they should not issue another card to a person who was approved by the other company. But sad to say, due to competition CREDIT CARD COMPANY ARE ON STREET AND GIVING THEIR CARD FOR FREE.

Now who will be BLAME for the rising cases of DEFAULTER? Is it the person or the credit card company also?

They should give chances to a person who fails to pay but agreeing to re-strusture payment cheme. They should lessen interest and charges. Some person force not to pay and became a defaulter due to interest and charges pile up. Maybe its about time for credit card company to look on these matter rather than giving to GREEDY COLLECTING AGENT the case.

By: warrior

warrior — Tue, 03 Nov 2009 16:07:20 +0000

If I were in the shoes of the credit card companies, I should have learned my lesson from the big chunk of cardholders who fail to pay or who refuse to pay. Instead of focusing on collection efforts, there should be shift to adoption of a new set of criteria that will thoroughtly screen credit card applicants. Perhaps the cut-throat competition between credit card companies resulted to some leniency in approving credit card applicants.