Are credit card companies being to generous with offers and limits?

PeacefulWaters

chattychappy wrote: »

I know people who would be perfectly good for credit, but can't get it

<snip>

Consequence is - yes, some CCs are "too generous" to some borrowers, whilst being "too mean" with others. I think they take the view it's not cost-effective to do more detailed checking..

In a previous life I was the bank manager who made the decision.

When automated decision making came into being, I said a computer could not make a better decision. I said it couldn't understand the warm and fuzzy things that make a difference in an individual's ability to pay.

I was absolutely wrong in that judgement. It became clear fairly quickly that automated decision making against the same criteria without the "judgement" of a member of staff was significantly less likely to create missed payments and bad debts.

People who I decided to lend to because they "seemed" good for a loan defaulted. People who I wouldn't have touched in a month of Sundays got accepted by the new automated systems and paid every payment on time.

Automated underwriting systems remove an element of hidden discrimination that existed before and make better decisions overall.

That doesn't mean that they're 100% perfect. That doesn't mean that they can't be programmed to pass/fail applications at the wrong level. That doesn't mean that the checking of basics like income shouldn't still take place (it often doesn't).

But they are better than an individual thinking he or she knows somebody is "good for a loan".

bris

It's just business, they look at long term, not 12 or 18 months. When the interest period ends most still have the bulk of the debt and are now paying interest, some will move again but millions wont.


No they are not being overly generous they are laying a trap, once in only a few escape, they are not worth trillions through generosity.

chuckley

Just because banks are offering xxx months BT/0% doesn't mean many actually get them.

Such as anything in life really. I generally think it's a lot harder these days for most people even those with 'clean' files.