ATLANTA (9/19/13)--Card issuers have seen as much as a 90% decrease in credit line increase (CLI)-eligible card accounts since regulatory changes introduced by the CARD Act in 2010. A new white paper from Equifax advises card issuers how to restore credit line increases with a diversified data strategy.
Card issuers face a conundrum: how to overcome regulatory hurdles to restore the credit line increases that consumers and card issuers want, said the report, "Recapturing CLIs: How a Diversified Data Strategy Can Help Card Issuers Restore Credit Line Increases--and Boost Revenue."
In the past, card issuers used in-house data, credit bureau data and analysis to determine a cardholder's ability to pay. Those who met the criteria received an automatic CLI. Cardholders who received a 10% to 30% CLI boosted their balance by about 3% within one year, while consumers who received no increase cut spending by about 4% during the same period, said the paper. With consumers paying down their debt during the period studied, the results would be more compelling today, said the Atlanta-based Equifax.
The credit information company offered these tips to assessing consumers' ability to pay:
For the full report, use the link.