by Akhilesh Mittal

Created on: March 02, 2007   Last Updated: April 13, 2007

It is a paradoxical question to ask if the rules on applying for credit cards should be made tighter.

How many people know that these are two distinct departments, (A) Credit Card Applications (B) Credit Card Approvals

The task and goal of the Credit Card Applications team is to lure as many people as possible to apply for the credit cards. Their incentives and bonus are dependent on the number of applications they can pull in. This way the credit card companies get a huge pool of applicants to choose from.

The task of Credit Card Apporval team is to look at the credit worthiness of individuals and then approve/ disapprove the card. The main task here is to filter out the good candidates from the pool of applications gathered by the application team.

Coming back to the question. Should the norms for credit card application be tightened. I personally feel NO. It is not the norms but the information that credit card companies should share with the applicants. There should be strict disclosure norms anf if credit card companies don't disclose the information properly to their customers they should be levied a fine. A customer should be informed of the fees and charges, credit period and implication if not paid before the credit period ends. In case a customer doesn't qualify the criterion (not talking about the credit score, rather the demographics or a case where the applicant is a foreign individual and can't apply for a credit card) then he/ she sohuld be told up front about it.

To conclude the onus is on us as a customer to be aware about what we are getting into as well.

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