Credit Evaluation & Financial Analysis for Credit Card Products

Course Description

Duration 4 days – 28 hrs

Overview

This course trains participants to evaluate credit card applicants using practical financial analysis (income/cashflow, capacity, stability), credit behavior data (incl. bureau/CIC when applicable), and risk policy decisioning—then connects underwriting choices to profitability and billing outcomes (APR/finance charges, fees, statement cycle, delinquency). It includes key PH compliance requirements for credit card operations, disclosures, and consumer protection—including BSP rules on interest/finance charge caps and disclosure principles under the Truth in Lending Act.

Objectives

Explain the end-to-end credit card lifecycle: acquisition → underwriting → booking → billing → delinquency/collections → portfolio review.
Perform applicant financial analysis for employed and self-employed segments (income validation, cashflow, obligations, DTI/DBR).
Use risk-based decisioning approaches: scorecards, rule-based cutoffs, policy exceptions, and limit assignment.
Translate risk decisions into unit economics (revenue drivers vs risk/cost drivers).
Understand billing statement mechanics and how finance charges/fees are computed under typical card setups, including BSP caps (e.g., interest/finance charges cap and cash advance fee cap)
Apply PH consumer protection and legal basics relevant to card issuing and fraud (e.g., RA 8484 on access devices) Lawphil and data privacy obligations for applicant/customer data

Audience

Credit Underwriting / Credit Evaluation teams
Credit Policy, Risk Management, Portfolio Management
Credit Operations / Billing Operations / Collections leaders
Product Managers / Card Business / Pricing & Profitability analysts
Fraud/Risk investigators supporting card acquisition and usage
Customer service leads handling disputes/billing concerns

Pre- requisites

Basic understanding of banking/credit terms (APR, credit limit, delinquency)

Comfortable with Excel (basic formulas; optional: pivot tables)

Familiarity with your institution’s application form/requirements is helpful but not required

Course Outline

Credit card business, market context, and applicant financial analysis

Module 1: Credit card product fundamentals & PH market framing

Credit card value proposition: revolve vs transactor vs installment-led segments
Key product levers: annual fees, rewards, installment offers, promos, cash advance
Risk-return overview: where revenue comes from vs where losses/costs happen

Workshop: Define target segment + risk appetite assumptions (who you want, who you avoid)

Module 2: PH compliance essentials for credit cards (what underwriters must know)

BSP consumer protection concepts for credit card operations (statement and disclosure expectations)
Truth in Lending Act (required disclosure of finance charges / true cost of credit)
Credit card interest/finance charge cap and cash advance fee cap (what it means for pricing and profitability)
Data Privacy Act basics for handling applicant/customer information
Access Devices Regulation Act (RA 8484) fraud-related awareness
Credit Information System Act (CISA) & CIC concept (role of centralized credit information system—high level, as applicable)

Module 3: Underwriting inputs and document assessment (practical)

Application data quality: completeness, consistency, red flags
Income validation: payslip, COE, ITR, bank statements, business docs (for self-employed)
Expense and obligation estimation: existing loans, BNPL, other cards, recurring bills
Capacity metrics: DBR/DTI, net disposable income, buffers
Stability metrics: tenure, industry risk, employment type, address stability

Lab: Income + obligation worksheet and DBR/DTI computation (employed vs self-employed)

Module 4: Financial analysis for card underwriting (consumer-focused)

Cashflow view: inflows/outflows and seasonality
Conservative adjustments (haircuts), “ability-to-pay” stress checks
Handling thin-file / new-to-credit applicants (principles, not vendor-specific)

Exercise: Build a simple “capacity score” rubric for your institution

Decisioning, limits, pricing, and fraud controls

Module 5: Decisioning frameworks (policy + score + exceptions)

Rule-based underwriting vs scorecard-based underwriting
Cutoffs, overrides, and exception governance
Decline reason codes and adverse action consistency (operational discipline)

Workshop: Draft a sample decision tree (approve/conditional/decline) with reasons

Module 6: Credit limit assignment & line management

Initial line setting: income-based, behavior-based, risk tier-based
Line increases/decreases: triggers, cadence, and controls
Utilization, exposure, and concentration management

Lab: Limit setting matrix by segment + risk tier

Module 7: Pricing & profitability basics (connected to BSP caps)

How revolve interest, fees, and interchange contribute to revenue (conceptual)
Cost components: funding, ops, fraud, charge-offs, rewards, collections
Practical implications of BSP caps on pricing strategy (what can/can’t be priced into APR/fees)

Module 8: Fraud and application risk controls (issuer-side)

Common application fraud patterns and inconsistencies
Verification design: what to verify, when to verify, and escalation paths
RA 8484 awareness: prohibited acts and why process discipline matters

Exercise: Build a “red flag → action” playbook (verify, decline, refer)

Billing mechanics, statement analysis, delinquency & portfolio monitoring

Module 9: Credit card billing statement mechanics (what underwriters should understand)

Statement cycle, posting, cutoff, and due date concepts
Minimum amount due logic and why it matters for risk
Consumer protection reminders in billing statements (minimum payment warning)
Finance charges overview and BSP cap implications

Lab: Read a sample statement: identify balances, fees, MAD, and revolve scenario outcomes

Module 10: Delinquency, collections, and loss concepts

Delinquency buckets and roll rates (1–30, 31–60, etc.)
Cure vs roll vs charge-off concepts (high level)
Hardship/collections treatment principles and operational controls
Linking underwriting to downstream delinquency patterns (what to improve)

Module 11: Portfolio monitoring & early warning indicators

Key portfolio KPIs: approval rate, booked rate, utilization, revolve rate, delinquency rate, vintage curves
Early warning signals: sudden utilization spikes, payment behavior shifts, repeated cash advance usage
Policy recalibration: tightening/loosening strategies by segment

Workshop: Build a monthly portfolio dashboard outline (KPIs + thresholds + actions)

Module 12: Capstone case (end-to-end)

Participants complete an end-to-end scenario: