Tag Archives: finance

Smart credit limits save money for customers and banks

The credit limit you’re not using on your card is costing the bank money, and that’s increasing the cost for all customers’ cards.

Jonathan left a ‘big four’ bank to pursue his PhD at the University of Melbourne and the ARC Centre of Excellence for Mathematical and Statistical Frontiers, drawing on his experience to address a real-world problem.
Jonathan left a ‘big four’ bank to pursue his PhD at the University of Melbourne and the ARC Centre of Excellence for Mathematical and Statistical Frontiers, drawing on his experience to address a real-world problem.

Now, Melbourne mathematicians have developed a way of minimising this using the bank’s data on customer spending behaviour.

The unused credit costs the bank money because regulators require them to have funds in reserve – which they can’t invest elsewhere for profit – to cover the possibility you’ll make a large purchase and not pay the money back.

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