>This really becomes a problem when people use credit to pay for things they can't afford, of course.
This is exactly it. People who use credit to pay for things they can't afford are a risk, but how do you identify those people efficiently? Seems logical to test for that by starting with low credit limits rather than immediately offering loans for items of high value like a car or house.
The consumer gets a free 30-day loan and the issuing banks (via credit agencies) get valuable data.
This is exactly it. People who use credit to pay for things they can't afford are a risk, but how do you identify those people efficiently? Seems logical to test for that by starting with low credit limits rather than immediately offering loans for items of high value like a car or house.
The consumer gets a free 30-day loan and the issuing banks (via credit agencies) get valuable data.