Fundamentals of Credit for Credit Card Products

Course Description

Duration 3 days – 21 hrs

Overview

This beginner-friendly course builds a solid foundation on consumer credit principles and applies them to credit card products—how issuers assess risk, how cardholders borrow and repay, and how billing statements, interest/finance charges, and fees work in practice. It also covers must-know Philippine regulations and consumer protection basics, including the BSP ceilings on credit card interest/finance charges and the Truth in Lending Act disclosure principles

Objectives

Explain core credit concepts: risk, capacity, willingness to pay, collateral (if any), and creditworthiness.
Describe the end-to-end credit card lifecycle: acquisition → approval → usage → billing → payments → delinquency.
Interpret a credit card statement of account (cycle, cut-off, due date, MAD, fees, finance charges).
Understand key PH compliance guardrails:
- Interest/finance charge caps and cash advance fee limits
- Truth in Lending Act: importance of full disclosure of the true cost of credit Basic financial consumer protection risk management expectations (high level)
Identify common credit card risks (application fraud, delinquency drivers, dispute scenarios) and proper escalation awareness (e.g., access device fraud)

Audience

New hires in Credit, Underwriting, Risk Ops, Customer Service, and Collections
Product/Business teams supporting credit card programs
Branch/frontline staff who explain card terms and billing to customers
Fintech/EMI teams launching or supporting a credit card / carded credit product in PH

Pre- requisites

Basic familiarity with banking terms (loan, interest, due date)

Comfortable with basic arithmetic and simple Excel (optional but helpful)

No prior credit background required

Course Outline

Credit fundamentals + how credit cards work

Module 1: Fundamentals of Credit (the “why” behind lending)

What credit is, why lenders exist, and how risk is priced
Credit pillars: capacity, character, capital, conditions (and collateral conceptually)
Credit lifecycle and where failures happen (approval, usage, billing, repayment)

Activity: Quick quiz + “good borrower vs risky borrower” scenarios

Module 2: Consumer credit in the PH context (high-level)

Types of consumer credit: personal loans, BNPL, revolving credit (cards)
Typical sources of repayment: salary, business income, remittances
Why “over-indebtedness” happens and how it shows up in card behavior

Module 3: Credit card product basics (market and mechanics)

Revolving credit vs installment: what “revolve” means
Key terms: credit limit, available limit, utilization, overlimit (if applicable), cash advance
Transaction types: retail purchases, installments, cash advances, fees, adjustments
The economics (conceptual): interchange vs finance charges vs fees (why issuers care)

Module 4: Credit evaluation basics (non-technical, fundamentals level)

What underwriters look for:
- identity/KYC hygiene (conceptual)
- income stability indicators
- obligations and basic DTI idea
- red flags and inconsistent information
High-level view of scoring and rule-based approvals (no vendor-specific tools)

Workshop: Evaluate 3 sample applicant profiles and decide approve/decline/refer (with rationale)

Billing fundamentals + delinquency + PH compliance essentials

Module 5: Billing cycle and statement fundamentals

Cut-off date, statement date, due date, posting date
Statement components:
- beginning balance, purchases, payments, credits, fees
- minimum amount due (MAD)
- total amount due
Customer behaviors: transactor vs revolver and what it means for billing

Lab: Read a sample statement and explain it in plain language (frontliner-ready)

Module 6: Interest/finance charges and fees (PH regulatory guardrails)

BSP ceilings (as applicable to your program):
- Interest/finance charge cap up to 36% per year (3% per month)
- Installment add-on rate cap up to 1% per month
- Cash advance: processing fee cap up to PHP 200 and no other fees beyond what’s allowed
What Truth in Lending aims to prevent (customers misunderstanding true cost)

Exercise: Simple finance charge scenario walkthrough (conceptual computation + customer explanation)

Module 7: Delinquency basics and collections handoffs

When an account becomes past due (what “delinquent” means in operations)
Why customers miss payments: income shock, overextension, disputes, fraud, poor understanding
Early-stage vs late-stage delinquency (conceptual buckets)
Collections do’s/don’ts (tone, documentation, escalation)

Module 8: Fraud and disputes awareness (fundamentals)

Common fraud/dispute situations: stolen card, unauthorized transactions, social engineering
Why process discipline matters (e.g., access device fraud law awareness)
Basic data handling expectations when dealing with customer information

Module 9: Wrap-up and on-the-job tools

Key takeaways: credit mindset + billing clarity + consumer protection guardrails
Personal action plan: what to reinforce at work (scripts, FAQs, checklists)

Outputs included (templates):