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216 comments on DrumBeat: December 15, 2008

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Leanan on December 15, 2008 - 11:21am Permalink | Subthread | Parent | Comments top

I understand interest. I said I was in favor of more limitations on credit.

However, it seems odd from the credit card issuer's POV. They make money off each transaction, whether you run a balance or not, so it seems strange they would cut off one of their best customers that way.

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sendoilplease on December 15, 2008 - 3:03pm Permalink | Subthread | Parent | Comments top

I don't know if that is so strange Leanan.

I think you explained the reasoning quite clearly one post up - the credit card companies are cutting credit lines based on "the industry the card holder works in, where they shop, what they buy...etc"

Maybe the CC companies are screening the population of card (bag)holders based on their sources of income and buying habits for a good reason.

That reason being, source of income and buying habits likely determine which card(bag) holders will become extinct next.

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Will on December 15, 2008 - 3:25pm Permalink | Subthread | Parent | Comments top

Makes perfect sense.

If your models predict that 50% of the finance or insurance positions in city X are going tits up... you withdraw exposure to those card holders.

If you know the card holder shops at Department Store Z and your latest D&B suggests that Z is going down the tubes, you withdraw exposure. You don't want your receivables (transaction fees) tied up in court.

Multi-variate segmentation is very powerful.

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sendoilplease on December 15, 2008 - 5:18pm Permalink | Subthread | Parent | Comments top

"50% of the finance or insurance positions in city X are going tits up... you withdraw exposure to those card holders"

Yup. Or if the card holder is in the auto industry, shipping industry... lots of occupations will be losing creditworthyness.

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Dryki on December 15, 2008 - 4:50pm Permalink | Subthread | Parent | Comments top

It seems strange they would cut off one of their best customers that way.

Part of the new regulations that just went into effect include more data sharing between various cc companies - and who knows what else. Perhaps this newly married customer who charges $90k per year is a wee bit too risky for some other reason.

cfm in Gray, ME

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216 comments on DrumBeat: December 15, 2008

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