Visa
Acquired
Challenges of unsecured consumer credit card lending
The unsecured nature of consumer credit card lending presents financial risks due to the lack of proper risk underwriting. Indiscriminately sending out 65,000 cards with the same credit limit to every customer can lead to significant initial losses. Unsecured lending differs from secured lending, and assumptions about loss ratios cannot be directly applied. Bank of America's program faced challenges as it involved unsecured lending, leading to a significant amount of fraud.
00:00
Transcript
Play full episode
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
