As banking regulations become more stringent, so do the policies for dealing with credit cards. Then for friends who have already applied for several bank credit cards and have a high total amount, they often hear the bank staff or account manager mention the word "rigid deduction" in the process of applying for a card.
1. What is rigid deduction?
To understand the meaning of rigid deduction, first know the relevant source of the word and why it is performed.
First of all, when you apply for a credit card, the bank will assess a total credit limit according to your income, RV, assets, etc. (the qualification is generally 400,000, and the qualification is at least million) This is how the bank assesses your near-term ability to make money, adds your assets, adds them up, and then discounts them to determine the maximum amount of money it can lend you.In other words, the most money can be lent to you, and within this range you can basically guarantee that you can pay it back.
Then, when the bank approves the credit line and adjusts the credit card limit, it shall deduct the total credit amount of the credit card obtained by the applicant from other banks on the basis of the ceiling of the total credit limit approved by the Bank.For example, if a customer of a bank has a credit card limit of $400,000, and the total amount of credit cards used by other banks is $360,000, then his new card limit can be given up to $40,000, which is a "rigid deduction".
2.why implement rigid deductions?
When managing credit card credit, commercial banks sometimes ignore the fact that the applicant has already obtained credit from other banks Finally, the total credit limit of each bank obtained by the customer far exceeds its repayment ability, then the customer's repayment ability does not match the borrowing limit, of course, the risk probability of forming bad debts will increase greatly.In order to further standardize the development of the banking industry and reduce the bad debt rate, the stricter the supervision, the standardization and introduction of a series of policies have indicated that it is necessary to strictly control credit, especially the flow of credit funds into the stock market and property market.Today, rigid deductions have become stricter and have long been embedded in the banking system as a hard condition. Therefore, when applying for a credit card, you should always pay attention to the factor of "rigid deduction".
It should be noted that the same personal conditions, each bank to assess your total credit limit is different, so when we lend, we must operate according to our own ability, so that we have enough ability to repay after the loan, if we are unable to repay because of too many loans, then it will blacklist us, thus bringing great inconvenience to our lives.
