Fed study sounds alarm over algorithmic rises in credit limits
Researchers say US lenders are extending too much credit to subprime borrowers
The widespread practice of banks increasing credit card limits poses potential harm to consumers and raises questions for policy-makers, argue researchers with the Federal Reserve Board.
Their paper, published on January 16, says credit cards are underpinned by “an increasingly complex algorithmic infrastructure”, which determines who receives more credit and when. Credit card issuers deploy sophisticated algorithms that continuously analyse users’ spending and borrowing behaviour, and often
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