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:
- Applicant assessment (income/obligations/red flags)
- Decision (approve/decline/conditional) + limit recommendation
- Pricing/risk tier rationale (within PH constraints)
- Expected billing behavior outcomes (transactor vs revolver) and risk controls
- Post-booking monitoring plan
