Why is it normal for banks to issue cards without showing their terms first?

[kdm31091]

Your idea is nice in theory, but just wouldn't work with profit driven banks. It's similar to how US Bank used to provide a 1% Cash Rewards card to those who did not qualify for Cash+. You had no option to decline the Cash Rewards -- if that's what you got, it's what you got.

For "regular" people in the real world, it's probably a pretty nominal issue, considering they rarely apply for cards or pay much attention to various rewards. You are getting the HP either way. The AAOA ding only occurs when the account is approved, but again, if you are not constantly applying, it's not a big deal.

Banks want profit and customers. If you were able to decline every approved account that was not 100% up to your standards (including with APR), they would lose a lot of customers. That's just not going to happen, however nice an idea it may be in theory.

Capital One doesn't provide a Venture One if you're declined for a Venture, at least AFAIK. Never heard of that happening. BOA will sometimes give you a lesser version of the Alaska card, but such a fact is clearly stated on their application page.

[Anonymous]

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@kdm31091 wrote:

Your idea is nice in theory, but just wouldn't work with profit driven banks. It's similar to how US Bank used to provide a 1% Cash Rewards card to those who did not qualify for Cash+. You had no option to decline the Cash Rewards -- if that's what you got, it's what you got.

For "regular" people in the real world, it's probably a pretty nominal issue, considering they rarely apply for cards or pay much attention to various rewards. You are getting the HP either way. The AAOA ding only occurs when the account is approved, but again, if you are not constantly applying, it's not a big deal.

Banks want profit and customers. If you were able to decline every approved account that was not 100% up to your standards (including with APR), they would lose a lot of customers. That's just not going to happen, however nice an idea it may be in theory.

Capital One doesn't provide a Venture One if you're declined for a Venture, at least AFAIK. Never heard of that happening. BOA will sometimes give you a lesser version of the Alaska card, but such a fact is clearly stated on their application page.

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Right, but it still does not make that a good business practice. 

[Ghoshida]

I agree with the general premise of the OP.

Banks can and should change the CC process more towards the instalment loan process.

Both are profit oriented.

And it's super easy to implement.

Screen 1: marketing info, including possible bonuses, fees and credit terms (range)

Screen 2: individual's info, asking permission to HP, disclaimer that marketing offer may not be met

Screen 3: show the offer (terms, limit, bonus etc) based on the HP. Ask individual to confirm 

Screen 4: if confirmed, congratulate individual, show delivery info. Else thank you and see you later message.

In step 3, banks report HP. In step 4, if confirmed, banks open account otherwise no new account.

This is how I see auto loans etc happen. Why not CCs?

This will eliminate disgruntled customers, and the cost of opening an account that will be rarely used.

[kdm31091]

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@Anonymous wrote:

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@kdm31091 wrote:

Your idea is nice in theory, but just wouldn't work with profit driven banks. It's similar to how US Bank used to provide a 1% Cash Rewards card to those who did not qualify for Cash+. You had no option to decline the Cash Rewards -- if that's what you got, it's what you got.

For "regular" people in the real world, it's probably a pretty nominal issue, considering they rarely apply for cards or pay much attention to various rewards. You are getting the HP either way. The AAOA ding only occurs when the account is approved, but again, if you are not constantly applying, it's not a big deal.

Banks want profit and customers. If you were able to decline every approved account that was not 100% up to your standards (including with APR), they would lose a lot of customers. That's just not going to happen, however nice an idea it may be in theory.

Capital One doesn't provide a Venture One if you're declined for a Venture, at least AFAIK. Never heard of that happening. BOA will sometimes give you a lesser version of the Alaska card, but such a fact is clearly stated on their application page.

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Right, but it still does not make that a good business practice. 

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I get what you're saying. Just think it's unlikely to change.

[elim]

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@Ghoshida wrote:

I agree with the general premise of the OP.

Banks can and should change the CC process more towards the instalment loan process.

Both are profit oriented.

And it's super easy to implement.

Screen 1: marketing info, including possible bonuses, fees and credit terms (range)

Screen 2: individual's info, asking permission to HP, disclaimer that marketing offer may not be met

Screen 3: show the offer (terms, limit, bonus etc) based on the HP. Ask individual to confirm 

Screen 4: if confirmed, congratulate individual, show delivery info. Else thank you and see you later message.

In step 3, banks report HP. In step 4, if confirmed, banks open account otherwise no new account.

This is how I see auto loans etc happen. Why not CCs?

This will eliminate disgruntled customers, and the cost of opening an account that will be rarely used.

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   we have a winner

[Anonymous]

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@Anonymous wrote:

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Right, but it still does not make that a good business practice. 

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Perhaps not, but that's irrelevant as you are agreeing to their terms when you apply.  NRB525 summed this up nicely on the last page of this thread.

If one doesn't agree with the terms of the contract (which states APR can be whatever, SL can be whatever, a substitute product can be issued, etc etc) then one can make the choice to not apply. 

IMO, if someone has to worry about these issues in parenthesis above, they shouldn't be applying.  Garden for another 6 months and then apply when your score/profile isn't "on the cusp" so that you get what you really want.  If one can't hold out and apply at a time when their profile clearly supports the product they are apping for, they assume the risk that the product they are apping for won't be delivered on the best terms or at all.

[elim]

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@Anonymous wrote:

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@Anonymous wrote:

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Right, but it still does not make that a good business practice. 

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Perhaps not, but that's irrelevant as you are agreeing to their terms when you apply.  NRB525 summed this up nicely on the last page of this thread.

If one doesn't agree with the terms of the contract (which states APR can be whatever, SL can be whatever, a substitute product can be issued, etc etc) then one can make the choice to not apply. 

IMO, if someone has to worry about these issues in parenthesis above, they shouldn't be applying.  Garden for another 6 months and then apply when your score/profile isn't "on the cusp" so that you get what you really want.  If one can't hold out and apply at a time when their profile clearly supports the product they are apping for, they assume the risk that the product they are apping for won't be delivered on the best terms or at all.

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Pretty sure 90% of the population doesn't know these limiting factors to the tee (like we try to master here).  One day someone will probably implement this, an HP will be required, and it will be a success.

[Anonymous]

Thanks for you opinion. My profile when I applied was scores above 700 on all 3 and included a Chase and NFCU card for $15,400 and $15,000 respectively so I had the reasonable expectation of getting the Visa Signature. My point is BOA is particularly terrible because they issue the other product without giving the bonus that prompted one to apply. I understand you are agreeing with the terms but it is still an absurd practice, and ended up costing BOA close to $150 dollars... ($50 Alaska Coupon + 5,000 Alaska Miles). They probably didn't pay face value for this but it still represents that by asking for my confirmation BOA could have saved themselves some money, and would not have made me want to avoid them for life. 

[Anonymous]

I agree that CL and APR should be personally disclosed before a customer has to accept.

[NRB525]

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@Ghoshida wrote:

I agree with the general premise of the OP.

Banks can and should change the CC process more towards the instalment loan process.

Both are profit oriented.

And it's super easy to implement.

Screen 1: marketing info, including possible bonuses, fees and credit terms (range)

Screen 2: individual's info, asking permission to HP, disclaimer that marketing offer may not be met

Screen 3: show the offer (terms, limit, bonus etc) based on the HP. Ask individual to confirm  Send to underwriting

Screen 4: if confirmed, congratulate individual, show delivery info. Else thank you and see you later message.

In step 3, banks report HP. In step 4, if confirmed, banks open account otherwise no new account.

This is how I see auto loans etc happen. Why not CCs?

This will eliminate disgruntled customers, and the cost of opening an account that will be rarely used.

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And if after Screen 2, if the bank algorithm wants to route this decision to an underwriter (7-10 day or "we will let you know") for manual review, because the file is marginal (and thus may be likely to be offered the lower tier card, high APR, low CL) then what?