As Covid-19 hurts jobs, don't use income alone to judge cardholders’ creditworthiness
The writer says the Covid-19 pandemic has affected wages and banks should not use income as the sole criterion to evaluate cardholders’ creditworthiness.
This week, I received a notification from my bank that it would terminate all my credit cards on Feb 1 next year because my “latest income record with (the bank) does not meet the minimum requirement”.
I have had two credit cards from this bank since 1987. One is for grocery purchases because it provides cash rebates and the other is a spare card for overseas travel.
I respect the bank’s decision, but during this pandemic, it is common sense that people may not earn as much as before owing to job losses or pay cuts.
I have been actively looking for work for a while, without much success.
Using income as the sole criterion to evaluate cardholders’ creditworthiness may appear to be less appropriate in these times.
Other factors, such as cardholders’ payment records, should also be considered in the evaluation.
Lending businesses are already using payment records as a gauge of borrowers’ creditworthiness.
l pay the monthly credit card charges promptly, before their due date, with no record of late charges.
In any case, to avoid further embarrassment, I have already cut both credit cards in half.
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