Credit Card Disclosures: The Devil Is in the Details
- Date:September 28, 2022
- Brian Riley
- Research Topic(s):
- PAID CONTENT
New credit card applications are the lifeblood of payments. The application is the entry point for new customers and for those who desire to change issuers or credit card plans within an issuer. The credit card application, whether from a direct mail, digital, or mobile channel, triggers a credit investigation that ends with approval or denial.
Pricing the credit card requires scrutiny and process control to ensure acceptance and cardholder repayment, calibrating the lender’s risk appetite and the prospective card member’s risk profile. Since the Credit Card Account and Responsibility Act of 2009 (CARD Act), credit card issuers may not dynamically re-price accounts. Any change to terms requires hurdles of notifications and termination options for the consumer and lender. For this reason, it is essential that credit card issuers price card terms right at the acquisition point.
The Consumer Financial Protection Bureau (CFPB) announced they are interested in better understanding credit card pricing and disclosure strategies. This report discusses the current environment, explains the logic behind the CFPB strategy, and presents a plan for credit card issuers to prepare for actions that the CFPB might require.
This report is 21 pages long and has 8 exhibits.
Companies mentioned in this report include: FICO, TransUnion.
Highlights of this research report include:
- The current environment
- Credit scores and underwriting rates
- Interest and non-interest related charges
- What you need to do
Interested In This Report
Private-Label Credit Cards: Still Relevant but Losing Luster
Private-label credit cards are an essential part of the U.S. card market, but they are a product in slow decline and face several threats, including instant point-of-sale financing...
Cobranded Credit Cards 2023
The cobranded card market is a way to generate loyalty, scale your portfolio, and service the next generation of cardholders.
The Credit Card Data Book Part Two: Internal Dynamics
The Credit Card Data Book is a two-part annual publication that covers the internal and external factors affecting the U.S. credit card market. The first part focuses on environmen...