Avoidance Of Credit Strain

APACS, the nodal agency in the credit card industry, made an important announcement, at a press conference, regarding the introduction of a new development in the data sharing process. This announcement was on behalf of the credit card industry in the United Kingdom and stated that in future all APACS members would be sharing the behavioral data of their customers with each other. The members of the APACS had decided to commit themselves to the parting of information about their customers. Initially the five major issuers HBOS, MBNA, GE Money, Capital One and Barclay agreed and stated that it would be applied to other card users. Each of these companies decided to share their data with the others from the current month.

The other card issuers also agreed to join these companies once they had consulted their information technology experts. As soon as this data sharing process became operational it would be possible to identify those going through a financial crisis. This would permit the credit card companies to fulfill their promises towards the lending norms and become a benchmark for future policy implementation. It was expected that this system would become operational by March this very year. The normal procedure for lending involves evaluating the customer’s credit history along with his balance sheet and overall credit limit.

The introduction of the new system would assist in learning the payment history of the customer, whether he had paid the minimum due from him, the changes in his credit limit over a period of time, his withdrawals from his savings account to meet his expenses and whether he was a recipient of a benefit under any promotional scheme or not. The details of the promotional deal clearly differentiate between people who normally pay the minimum due but are not doing so now because they had now got an unfair deal earlier. This refreshingly new scheme of data sharing would let the lender know about the borrowers past receipts and payments and what trends he showed towards fund usage.

This new system would have a favorable impact in allowing for responsible lending by banks that had earlier overlooked the customer’s banking trail of data. It would also become a significantly important source of information for the lenders before considering lending to customers who are facing difficulty in settling their earlier loans. Credit card users too would benefit from this early guidance of their debt status.

Mr. Paul Rodford, head of the card payments at APACS stated that immediate access to information would enable the lender to assess the customer’s ability to repay the credit. Customers who were showing signs of strain and were found struggling to repay their earlier credit would not be given fresh credit, as it would enhance their problems of repayment. This objective of the credit card industry would result in very considered lending and help in achieving its long-term goals. All these steps though difficult to implement would eventually benefit the customer towards the right direction.

Setup a credit card processing merchant accounts to accept credit cards today!