Card flipping

Discussion in 'General Discussion | Credit Cards' started by jasher926, Aug 7, 2014.

  1. jasher926

    jasher926 Silver Member

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  2. Counsellor
    Original Member

    Counsellor Gold Member

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    I did not know this:
    I wonder if it's true.
    satman40, Newscience and jbcarioca like this.
  3. jbcarioca
    Original Member

    jbcarioca Gold Member

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    You wonder because it is not true.

    I'm surprised to see a Mercator person quoted in such a way, possibly it was a misquote. The gist, that some banks do not screen on potential abuses and others do. The explicit rules are mostly silent on denial of credit on such bases, but banks always have the option to deny credit for anything they consider to be inappropriate usage, present or past, or simply lack of passing the requirements established in a probability of profitability model. Such models are widely in use among some issuers, among which is American Express, one issuer that is explicit in saying they close an account or deny an account using that logic, although their disclosures generally describe denial for use of the product in a manner not consistent with the product design. Some of us may even remember when they closed many Optima accounts a few years back because customers were not revolving, but happily opened charge cards for them instead. The generic regulations are more opaque than clear, but here they are as described by the Consumer Financial Protection Bureau of the FDIC:

    Lenders always have the right to refuse applications for credit if, in their unilateral view, the product being applied for is not suitable for the applicant. They are under no obligation whatsoever to offer any alternative product, although some do. They are under legal obligation to disclose reason for rejection and source of information, which usually has considerable leeway on the part of the disclosing issuer regarding terminology.
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  4. satman40

    satman40 Gold Member

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    They made many home loans to unqualified buyers.

    Nice to have a powerful government in control of the banks, they even lowered the interest on CD's,

    I can see this as a health business decision.
    Newscience likes this.

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