Ask A Back Office CC Company Employee ANYTHING

[Anonymous]

i hope he really is an analyst. 

[CadillacXTS]

Being a credit card fraud victim in past. What is the amount of fraud transactions that will cause the bank to close the account?

Thanks in advance

[BarryNTexas]

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@WNA888 wrote:

So I have been working for a major credit card company the past 6 months in the executive back office. That's why I've been gone. Can't say what credit card company, but it's somewhere in the top 5 in terms of purchase volume. Back-end means you know A LOT of the inner working and deep knowledge of all kind of stuff (e.g., underwriting, fraud prevention, CL, approvals, acct closure, why things are the way it is).

Anyways, feel free to ask me anything

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Thanks for taking the time to share some insights.  I wonder if by working as a rep in the EO has your views on credit and debt changed?  By your FICO it looks like you are obviously doing well.  But has the role and responsibility plus daily interaction with your customers changed how you view credit cards and debt?

If you were to share 3-4 of your top recommendations for readers concerning proper credit card handling, what would those be for all levels of experience here in MyFico?

Thanks again! -BNT

[NRB525]

Thanks for all the replies. They tend to confirm what I thought was going on within the banks.

My situation includes having large open balances during the credit bubble, $118k open on $168k of available CL August 2008. Balances have been declining since then, latest TU update has "All Bankcard $37,540". Through the course of the last several years, several cards have been closed, most cards remaining which were open prior to 2010 were CLD to some extent. I don't imagine that causes too much problem. Never a late payment.

In the last year, I've opened and closed a AMEX $10k revolver, Feb to October 2014, a US Bank VISA Sig $17k August to this February, and closed a Chase card  from 1998 with $8k limit. I've done these because the cards weren't fitting my future requirements, to keep my total available CL under control, and the AF on two cards.

I've added some cards in the last few months also, the latest Hyatt card hasn't reported yet.

Question 1: Does the SP keep track of the long term trend of open balances? I imagine this decline in total balances is positive.

Question 2: Does proactively closing an account in good standing, whether at this bank or any other, just keep the total CL in check, allowing different cards to be added. It's not a negative to close a CC, correct?

[wche]

Thanks for all your insight! A couple questions:

1. How does opening an account and closing it before 12 months (to avoid annual fees / to churn bonuses) affect internal scores? How does it affect future applications with the same bank?

2. Do banks correlate higher spend with a higher internal score?

[ScarletFever]

Thank you for doing this! One of the things that drives me crazy is the apparent contradictions of credit card approvals. On the one hand, a consumer is always told "only apply for credit when you need it". On the other hand, you need to show via  consumers metrics that they don't need credit by having low utilization, paying in or near-full, etc. Plus, if you do "need credit" and app because of a financial need-high utilization, car died, etc, Why would internal scoring models punish credit seekers for multiple apps and inquiries especially if they have a good payment record, low utilization, prime cards, etc.? Do creditors consider that not only do they have a protocol in place for determining credit worthiness, but so do consumers,too? So, for example, perhaps consumers wish to fine tune their financial situation by setting goals for a particular credit line or total credit lines, obtaining a particular card or giving business to companies that demonstrate they appreciate the business by cli's, offering top-level cards, etc without pulling teeth. Essentially, making cc companies compete by virtue of consumers applying for and obtaining cards with good offers.  Not everything credit move by consumers is potential risk. Sometimes consumers simply want to maximize their profitability, too. So, do internal scoring models recognize that type of consumer? Or, are the models strictly statistical regarding util, cl, etc? Also, what happens when someone with a 690 FICO can obtain high credit lines while another might have a 740 FICO-plus with no derogs and not receive as high a credit limit? Is it usage?

[Anonymous]

Thanks for all the replies and in depth answers.

Bookmarking for reading later (for when more replies come).

[chwebb1]

I've never been late on a payment, but I've always wondered why Penalty APRs are so high (like 30% or so). Do you have any insight as to why many banks jack up interest rates for those people who pay late, especially to ~30%?

[NRB525]

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@chwebb1 wrote:

I've never been late on a payment, but I've always wondered why Penalty APRs are so high (like 30% or so). Do you have any insight as to why many banks jack up interest rates for those people who pay late, especially to ~30%?

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If you were lending to someone on set terms, and the borrower of your money did not pay you back on time, according to terms, when you expected the payment, how would you react? Would you think that borrower was still a good risk? Still playing by the agreed rules? Or would they become higher risk and deserve a higher interest rate (which the borrower agreed they would be subject to, before they borrowed the money, if they paid late)?

[score_building]

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@chwebb1 wrote:

I've never been late on a payment, but I've always wondered why Penalty APRs are so high (like 30% or so). Do you have any insight as to why many banks jack up interest rates for those people who pay late, especially to ~30%?

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Increased RISK and PROFIT. No mystery to it really.