Deal or no deal: A truce for anxious credit card companies
Contrary to popular belief, there is a way for credit card companies to better manage their risk without lowering responsible customers’ credit limits. In fact, the solution is quite simple and well within the means of credit card companies that are losing good customers due to bad policies.
Simply put, credit card companies can offer its responsible customers a reduction in purchasing capacity to a reasonable level and for a certain time period after which a review will take place. By doing this, companies can mitigate any immediate opportunities for increased debt while not harming a customer’s credit score.
This détente is certainly not the perfect solution and it leaves out details for brevity, but it gives both lender and borrower a “grace” period to adjust during a difficult time, preserves customers’ credit scores, and maintains the integrity of the credit rating system.
Would you take this deal? What ideas do you have?