Taking accounts into account

With more Americans finding themselves in trouble with credit card debt, a number of banks are turning to other means when determining whether to issue credit cards to consumers.

According to a report from USA Today, along with a credit score, a bank may turn to looking at the accounts a customer has with them when deciding on issuing a credit card or determining the amount of a credit line.

The goal of doing so is to give banks an additional risk factor to consider. If a person’s bank activity shows a history of careless spending, a bank may think twice before issuing a credit card.

Furthermore, looking at a consumer’s account can give a bank an idea as to whether a person has the funds to back up their credit card activity.

The report shows that quite a few larger banks have taken up the practice of looking at other accounts, including Bank of America, Capital One, Citigroup, JPMorgan Chase and Wells Fargo.

Given a recent numbers from the Moody’s Credit Card Index, it’s no surprise banks are looking for better ways to assess risk. The report from Moody’s shows that the rate of credit card charge-offs has climbed from 10.62 percent to 10.76 percent.

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