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>Credit card lenders were happy to help, signing up customers who might not have qualified in the past based on income, but looked like safe debtors because the
by jmclnx 2y ago
>Credit card lenders were happy to help, signing up customers who might not have qualified in the past based on income, but looked like safe debtors because their bank accounts were flush with cash
To me that is the biggest reason.
- philip1209 2y agoWasn't this sometimes a bug instead of a feature? Loaning based on cash instead of income is how Brex and Ramp took on Amex. (obligatory: "commercial != consumer")
- delfinom 2y agoThat seems to defeat the narrative of "the consumers are struggling due to high interest rates". If they have the cash in their accounts, they shouldn't be the ones largely defaulting.
- connicpu 2y agoThey had cash when they signed up, they don't anymore
- jandrese 2y agoI think the story is that the COVID stimulus checks meant that people who normally live paycheck to paycheck were for the first time showing a healthy bank balance which increased their credit score just enough to qualify. Once the checks stopped they stated defaulting.
- losteric 2y agoSince when is bank balance considered in credit scores and checks?
- jandrese 2y agoSince forever? Part of the assets/debt ratio.
- do_not_redeem 2y agoI'm gonna need a source on this one. https://www.myfico.com/credit-education/whats-in-your-credit-score https://www.myfico.com/credit-education/whats-in-your-credit...
- etempleton 2y agoI wonder to what extent credit card issuers factored-in pandemic related stimulus into their risk models. If they really considered cash on-hand as a replacement to verified income the stimulus payments would have completely invalidated their existing models.
- ac29 2y agoI have applied for many credit cards over the years and I have never once seen one that asked about assets, only income.