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Why don't all credit card issuers backdate?

Senior Contributor

Re: Why don't all credit card issuers backdate?


JeffM wrote:

Why do you feel entitled to a backdate?


I don't get the impression that the OP feels entitled.  Seems more like an inquiry why this is unique to AmEx.  I haven't had much luck with Googling for an answer either.

Message 11 of 39
Super Contributor

Re: Why don't all credit card issuers backdate?

My best guess is this.  

 

Federal law requires all information reported on CRAs to be accuarate.  For AmEx, given their history and practice "members since" dates, their backdating is an "accurate" entry into the CRAs, whereas other banks, who have never engaged in this practice, would be considered "inaccurate."

 

Similar to if one were to make a new payment to a very old debt, the entry is updated and SOLs reset to reflect the most accurate and up-to-date information.  This is the reason why the credit scoring method creates a disinsentive to pay off really old debts, even if one felt honor bound.

Message 12 of 39
Established Contributor

Re: Why don't all credit card issuers backdate?

If all of the credit cards backdated accounts, then it would lose its meaning. It would become an element that is either ignored or discounted in the scoring algorithm.

 

Or, at least, that is what makes sense to me. Having a television in your house was impressive until everyone had one.




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Message 13 of 39
Valued Contributor

Re: Why don't all credit card issuers backdate?


BootStraps wrote:

If all of the credit cards backdated accounts, then it would lose its meaning. It would become an element that is either ignored or discounted in the scoring algorithm.

 

Or, at least, that is what makes sense to me. Having a television in your house was impressive until everyone had one.


+1 Very true.

 

The TV analogy is a good one. Similarly, when Platinum credit cards were new, they were a hot, enviable status symbol. Now Platinum is near the bottom of the heap and people complain when they get one. Backdating is so prized ONLY because it's a rare benefit. If every card issuer did it, it would be nothing.

 

Message 14 of 39
Valued Contributor

Re: Why don't all credit card issuers backdate?

In general, when a new law is passed that applies to the area of banking there is an implementation date that says "you must comply by this date". Very infrequently is there grandfathering, unless the customer relationship or asset exists with the bank prior to the law being passed. For example, banks are generally prohibited from investing in equity securities (stocks), but many older banks who held equity securities were grandfathered in with their current holdings. However, when it comes to issues involving customer disclosure (think CARD Act, Truth In Lending, etc.) no bank is grandfathered in here. Otherwise, no bank would have to do it. 

 

I hope I made that distinction clear. When a law is passed, business practices generally have to change. Now, with that said, I have no clue where backdating falls in this debate. 

 

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Message 15 of 39
Mega Contributor

Re: Why don't all credit card issuers backdate?


Open123 wrote:

My best guess is this.  

 

Federal law requires all information reported on CRAs to be accuarate.  For AmEx, given their history and practice "members since" dates, their backdating is an "accurate" entry into the CRAs, whereas other banks, who have never engaged in this practice, would be considered "inaccurate."

 

Similar to if one were to make a new payment to a very old debt, the entry is updated and SOLs reset to reflect the most accurate and up-to-date information.  This is the reason why the credit scoring method creates a disinsentive to pay off really old debts, even if one felt honor bound.


That probably accounts for differences in SP/HP for CLI.  So, IF I enter a HP, it had better be the case that the customer was seeking credit, but I am not obliged to enter one even if the customer was seeking credit.   So accurate but not necessarily complete!

 

 

Message 16 of 39
Super Contributor

Re: Why don't all credit card issuers backdate?


longtimelurker wrote:

Open123 wrote:

My best guess is this.  

 

Federal law requires all information reported on CRAs to be accuarate.  For AmEx, given their history and practice "members since" dates, their backdating is an "accurate" entry into the CRAs, whereas other banks, who have never engaged in this practice, would be considered "inaccurate."

 

Similar to if one were to make a new payment to a very old debt, the entry is updated and SOLs reset to reflect the most accurate and up-to-date information.  This is the reason why the credit scoring method creates a disinsentive to pay off really old debts, even if one felt honor bound.


That probably accounts for differences in SP/HP for CLI.  So, IF I enter a HP, it had better be the case that the customer was seeking credit, but I am not obliged to enter one even if the customer was seeking credit.   So accurate but not necessarily complete!

 

 


Right, there are no laws that state a creditor *MUST* provide information, only that the information is *ACCURATE*.  So, let's say, Longtimelurker Inc. misses a payment with Open Inc.  I have every right to *not* report it, but if I do, it must be accurate and reflect that you paid late.

Message 17 of 39
Mega Contributor

Re: Why don't all credit card issuers backdate?


Open123 wrote:

longtimelurker wrote:

Open123 wrote:

My best guess is this.  

 

Federal law requires all information reported on CRAs to be accuarate.  For AmEx, given their history and practice "members since" dates, their backdating is an "accurate" entry into the CRAs, whereas other banks, who have never engaged in this practice, would be considered "inaccurate."

 

Similar to if one were to make a new payment to a very old debt, the entry is updated and SOLs reset to reflect the most accurate and up-to-date information.  This is the reason why the credit scoring method creates a disinsentive to pay off really old debts, even if one felt honor bound.


That probably accounts for differences in SP/HP for CLI.  So, IF I enter a HP, it had better be the case that the customer was seeking credit, but I am not obliged to enter one even if the customer was seeking credit.   So accurate but not necessarily complete!

 

 


Right, there are no laws that state a creditor *MUST* provide information, only that the information is *ACCURATE*.  So, let's say, Longtimelurker Inc. misses a payment with Open Inc.  I have every right to *not* report it, but if I do, it must be accurate and reflect that you paid late.


Can  you stop harping on about that?  It was just two days, ok 2 weeks late.  Honest error.  God!

Message 18 of 39
Super Contributor

Re: Why don't all credit card issuers backdate?


longtimelurker wrote:

Open123 wrote:

longtimelurker wrote:

Open123 wrote:

My best guess is this.  

 

Federal law requires all information reported on CRAs to be accuarate.  For AmEx, given their history and practice "members since" dates, their backdating is an "accurate" entry into the CRAs, whereas other banks, who have never engaged in this practice, would be considered "inaccurate."

 

Similar to if one were to make a new payment to a very old debt, the entry is updated and SOLs reset to reflect the most accurate and up-to-date information.  This is the reason why the credit scoring method creates a disinsentive to pay off really old debts, even if one felt honor bound.


That probably accounts for differences in SP/HP for CLI.  So, IF I enter a HP, it had better be the case that the customer was seeking credit, but I am not obliged to enter one even if the customer was seeking credit.   So accurate but not necessarily complete!

 

 


Right, there are no laws that state a creditor *MUST* provide information, only that the information is *ACCURATE*.  So, let's say, Longtimelurker Inc. misses a payment with Open Inc.  I have every right to *not* report it, but if I do, it must be accurate and reflect that you paid late.


Can  you stop harping on about that?  It was just two days, ok 2 weeks late.  Honest error.  God!


Oh, by the way, don't forget to remit the $35 late fee, $45 over the limit fee, and the $28.99% penalty interest that now applies to your entire balance.  

Message 19 of 39
Super Contributor

Re: Why don't all credit card issuers backdate?

Thanks OP for laying the foundation for a different new important topic i been.

The current credit laws are unseemly biased against the common consumer.

While lenders might bare the cost of purchasing our reports and so forth to complete a customer app or increase, consumers get the raw deal again where concerns inquiries.
Here i sincerely believe consumers are unfavorably biased against and potentially burdened with the current 2 YEAR INQUIRY report thingy.

Congress should be aggressively be lobbied to change the law on at least that one "stickler" and just make it if you are denied credit for any reason, allow the lenders to hold that data, not the CRA, and not be penalize for 2 entire years out of your life! I know it's generalized as only 1 year, but it's lodged firmly on the CR for 2 period.

We all have to protect ourselves from our time being discounted so easy.

Amexs comes from a different history? 1800's, what about Wells Fargo? Any raw american or American historian should have some history on them.

Need to bridge the functionality gap
Message 20 of 39